Formal job creation declines in March: EPFO

The Employees' Provident Fund Organisation (EPFO) added 13.40 lakh net members in March this year, the  Ministry of Labour and Employment data showed. In February, EPFO added 13.96 lakh members, whereas in January 14.86 lakh subscribers were added under EPFO.

Notably, for FY23, around 1.39 crore net members were added by the body, with an increase of 13.22% compared to FY22 wherein it added around 1.22 crore net members.

The Employee's Pension Scheme (EPS) was introduced in 1995. The scheme, administered by the EPFO, provides employees with a pension after they reach the age of 58. Both the employee and the employer contribute 12% of the employee's basic salary and Dearness Allowance (DA) to the EPF. While the employee's entire part goes to EPF, the employer's contribution goes to EPS at a rate of 8.33%.

Out of 13.40 lakh members added during the month, around 7.58 lakh new members have come under the ambit of EPFO for the first time. Among the newly joined members, the highest enrolment is registered in the age group of 18-21 years with 2.35 lakh members, followed by the age group of 22-25 years with 1.94 lakh members. The age-groups of 18-25 years constitute 56.60% of total new members added during the month. 

The data also highlights that approximately 10.09 lakh members re-joined EPFO membership. These members switched jobs and re-joined the establishments covered under EPFO and opted to transfer accumulations instead of applying for final settlement thus, extending their social security protection.

Gender-wise, the enrolment of net female members has been 2.57 lakh in March 2023, which is around 19.21% of the net member addition for the month. Of these, 1.91 lakh female members are the new joinees. This is around 25.16% addition of all the new joinees. In February, 2.78 net female members were enrolled under EPFO, of which 1.89 female members were new joinees.

State-wise payroll figures show the month-on-month growing trend in net member addition is reflected in the states of Haryana, Uttarakhand, Uttar Pradesh, Himachal Pradesh, Jammu and Kashmir, Mizoram, etc. In terms of net member addition, the top 5 states are Maharashtra, Tamil Nadu, Karnataka, Haryana and Gujarat. These states together constitute 58.68% of net member addition during the month. Of all the states, Maharashtra is leading by adding 20.63% of net members followed by the state of Tamil Nadu with 10.83% during the month.

In March, the Central Board of Trustees (CBT) of the Employees Provident Fund suggested an 8.15% interest rate on EPF accumulations in members' accounts for the financial year 2022-23. Last year, the EPFO slashed the interest on EPF to over a four-decade low of 8.1% from 8.5% in 2020-21.

Last month, EPFO extended the deadline till June 26, 2023, for applications regarding pensions on higher wages. The earlier deadline was May 3, 2023. According to the ministry, the timeline was being extended to facilitate and provide ample opportunity to the pensioners/members to ease out any difficulty being faced by them.