Job loss during COVID-19 crisis: Govt to provide EPF subsidy to 4 million workers
BusinessToday.In November 21, 2020
The government will provide provident fund subsidy to around four million formal sector workers, who had exited their jobs due to the Covid-19 lockdown between March to September. Around 3.9 million workers had left jobs in firms that were making EPF contributions toward them, show payroll data released by the Employees' Provident Fund Organisation (EPFO) on Friday.
Under the Atmanirbhar Bharat Rozgar Yojana to incentivise formal sector job creation, the government will deposit full EPF contribution of workers who are hired between October 2020 and June 2021.
All 'new employees', who were not covered under EPF system earlier and left their jobs during the Covid-19 crisis from March 1, 2020, to September 30, 2020, will be eligible for the benefit.
Currently, both employers and employees deposit 12 per cent each of a worker's wage toward schemes under the EPFO.
Under the Atmanirbhar Bharat Rozgar Yojana, the government will sponsor both the employer's and employee's portion for firms with up to 1,000 employees for two years. For firms having over 1,000 employees, the government will contribute only the employee's share for up to two years.
However, data on the figure of exits may be on the lower side since there is no legal obligation for employers to inform the EPFO about the exit of an employee in a timely manner, according to a report in Business Standard.
For example, data for April, the first full month during the national lockdown, is still being updated ever since it was first put out in public domain in June.
Another issue that signals underestimation is that the EPFO does not revise records for a financial year after it has released data for all the months in public domain. This means that the March 2020 data, which was released in May, will not be updated further as the EPFO will put out the data for full fiscal year 2019-20 in the next release, the Business Standard report said.
This means the number of exits, which was around two million when the data was released in May, will remain unchanged in public records.
Data released by the EPFO displayed a 70 per cent rise in net enrolments for September to 14.9 million. However, the payroll data continues to remain volatile, according to the EPFO's own admission in a press statement on Thursday.