Cabinet Approves Raising EPFO Wage Ceiling from Rs 15,000 to Rs 25,000 Per Month Effective September 17, Extending Mandatory Provident Fund Coverage to 5.1 Million Additional Workers

The Union Cabinet on September 16 approved raising the wage ceiling for mandatory Employees' Provident Fund coverage to Rs 25,000 per month from Rs 15,000, effective September 17, bringing 5.1 million additional employees into the statutory social security framework, according to an official announcement. Labour and Employment Minister Mansukh Mandaviya said at a press briefing that the revised ceiling reflects sustained wage growth, rising incomes, and continued expansion of formal employment since the last revision in September 2014. Employees joining employment at wages above Rs 15,000 per month were not automatically covered under the EPF framework and could remain outside mandatory provident fund, pension, and insurance protection. The enhancement will expand access to provident fund savings, pension protection under the Employees' Pension Scheme, and insurance protection under the Employees' Deposit Linked Insurance Scheme. The move also follows a January 2026 Supreme Court directive to the Centre and EPFO to decide within four months on a wage ceiling revision. Trade unions had pushed for the increase for years, while industry groups warned that the additional employer cost could be difficult for smaller businesses and MSMEs to absorb. Why It Matters: The EPFO wage ceiling hike represents the first statutory expansion of India's formal social security net in over a decade, bringing more than 5 million workers earning between Rs 15,000 and Rs 25,000 per month into mandatory provident fund, pension, and insurance coverage. The move updates the threshold to reflect wage inflation and rising minimum wages across states, but it also imposes a fresh cost burden on employers — particularly MSMEs — at a time when many are already navigating margin pressure from elevated input costs and demand uncertainty. The Supreme Court's January directive gave the decision judicial backing, reducing political risk for the government but amplifying compliance pressure on business