Understanding Pradhan Mantri Rojgar Protsahan Yojana: How Does It Benefit Employers and New Employees?

Implementation of Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)

Please find attached a circular by EPFO dated 30.09.2016 on the implementation of Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) for your information and implementation. Please also find attached guidelines of the scheme.

According to this scheme, effective from 9th August 2016 onwards, employers who are registered with EPFO will be incentivized by the Government of India (GOI) paying 8.33% EPS contribution of the employer in respect of new employees with new UAN. This benefit would be applicable if the new employee drawing a salary, i.e., basic + DA, is less than Rs. 15,000, and there is an increase in employment in the establishment. The benefit under this scheme would be given for up to three years.

The Apparel Industry will be getting an additional benefit of 3.67% - PF contribution of the employer.

Regards

Thank you for sharing. My queries are as follows:

1) What about contractors who are paying PF for contract employees of the Principal Employer, where PF is part of the CTC paid by the Principal Employer?

2) Is the scheme applicable to contractors if the contractor has their own employees on the payroll as the base strength?

3) What is the solution when a contractor and Principal Employer have a relationship, and the Principal Employer has outsourced their payroll under the contractor's EPF code?

4) What about the manpower providing companies that offer employment to new employees on contracts, but these employees are not retained for three years?

I also believe that agencies providing contracting services for unskilled and semiskilled manpower may encounter challenges in acquiring business, as every employer may now require PMRPY benefits and, consequently, shift the EPF burden of new employees onto contractors.

Regards

Is this scheme only for textile companies or all other companies.