Employers of ‘first-time employees’ in dilemma over PF contribution

The employers of 29,671 ‘first-time workers’ recruited into apparel export units in Tirupur cluster and obtained Universal Account Number (UAN) for Employees Provident Fund coverage subsequent to rolling out of Pradhan Mantri Rojgar Protasahan Yojana (PMRPY) on August 9, 2016, are in a predicament.

Lack of funds
Lack of funds allocation towards PMRPY for the current fiscal year and a paltry budgetary allocation of Rs. 200 crore for 2017-18 financial year for the whole country towards bearing of the employers’ contribution in the Employees Provident Fund (EPF) by the Government under the said scheme for first three years of rookie workers, have raised worries.
The PMRPY was envisaged to incentivise the employers for generation of fresh employment with the Government committing to bear the 8.33 % of the 12 % employers’ contribution in the EPF in the case of general industrial units for first three years of employment of first-time workers.
In the case of apparel export sector, the government had agreed to bear the remaining 3.67 % of the 12 % employers’ contribution through a special package in addition to the 8.33 % portion.
Annual needs
Even the Rs. 200 crore earmarked for 2017-18 fiscal for all sectors would not be enough considering that even the annual needs for clusters like Tirupur itself runs close to the said figures.
“The entrepreneurs here will end up bearing the entire employers’ contribution of fresh employees if adequate fund allocation is not made immediately towards incentivising our efforts taken to give employment to new set of people” said G. R. Senthilvel, secretary of Tirupur Exporters and Manufacturers Association