Formal job creation dips in February: EPFO data

The Employees' Provident Fund Organisation (EPFO) added 13.96 lakh net members in February 2023, slightly lower than 14.86 lakh subscribers added in January this year, according to the provisional payroll data released by EPFO.

Out of 13.96 lakh members added during the month, around 7.38 lakh new members have come under the ambit of EPFO for the first time. The pension fund body had enrolled around 7.77 lakh new members in January 2023.

Among the newly joined members, the highest enrolment is registered in the age group of 18-21 years with 2.17 lakh members, followed by the age group of 22-25 years with 1.91 lakh members. The age group of 18-25 years constitutes 55.37% of total new members during the month. This indicates that the majority of the members joining the organised sector workforce of the country are first-time job seekers.

The data also highlights that approximately 10.15 lakh members re-joined EPFO membership which rose by 8.59% as compared to last year. These members switched their jobs and re-joined the establishments covered under EPFO and opted to transfer their accumulations instead of applying for final settlement thus, extending their social security protection.

Gender-wise analysis of payroll data reflects that enrolment of net female members has been 2.78 lakh in February, 2023, which is around 19.93% of the net member addition for the month. Of these, 1.89 lakh female members are the new joinees. This is around 25.65% addition of all the new joinees. In terms of female participation, the net female member addition and new female member addition have registered the highest proportion in the last four months. This, as per the Labour Ministry, indicates a growing trend of women's participation in the organised workforce, says the Labour Ministry.

State-wise payroll figures highlight that month-on-month growing trend in net member addition is reflected in the states of Tamil Nadu, Andhra Pradesh, Jharkhand, West Bengal, etc. In terms of net member addition, the top five states are Maharashtra, Tamil Nadu, Karnataka, Gujarat, and Delhi. These states together constitute 58.62% of net member addition during the month. Of all the states, Maharashtra is leading by adding 20.90% of net members followed by the state of Tamil Nadu with 11.92% during the month.

The classification of industry-wise payroll data indicates that 'expert services' (consisting of manpower suppliers, normal contractors, security services, miscellaneous activities, etc.) constitute 41.17% of total member addition during the month. Comparing industry-wise data with that of the previous month, higher enrolments have been noticed in industries namely, 'leather products', 'garment-making', 'establishments engaged in rendering courier services', 'fish processing and non-veg food preservation' etc, the ministry says.

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%.

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 had slashed the interest on EPF to over a four-decade low of 8.1% from 8.5% in 2020-21.