How to Adapt HR and Payroll Processes to the New EDLI Clarification Regarding Continuous Service and Nomination?

On 17 December 2025, the Employees Provident Fund Organisation issued a crucial circular defining "continuous service" under the Employees Deposit Linked Insurance Scheme. The clarification, building on an earlier Gazette amendment in July, states that weekends, fixed weekly offs, and national or state holidays falling between the date of exit from one EPF covered job and joining another will not be treated as a break in service for EDLI death claims. Additionally, gaps of up to around sixty days between two EPF establishments can still be treated as continuous service for the purpose of minimum assurance benefits. The minimum payout to nominees in certain cases has been raised to fifty thousand rupees, even if the member had less than twelve months service or a small PF balance.

This change has significant implications for HR and payroll teams. It can determine whether families receive anything at all after an unexpected death. There are cases where a worker left one factory on a Friday, joined another on a Monday, and because Saturday and Sunday were treated as a "break", their family was told they had not completed the required continuous service for higher EDLI cover. The latest clarification will bring relief to many such families, but it also exposes how dependent workers are on meticulous backend data entry by employers, contractors, and consultants.

Legally, this change tightens the bridge between the EDLI Scheme 1976 as amended in 2025 and the broader social security framework under the Code on Social Security 2020. For compliance heads, it is now critical to ensure that exit dates, joining dates, and wage details are accurate and timely in EPFO systems. Internal audit and risk teams should treat EDLI as more than a footnote to PF; it is an insurance obligation with direct human impact and potential litigation risk if claims are mishandled.

If you were heading HR or payroll, what changes would you make immediately in your PF and EDLI data processes after this clarification? How can employers explain EDLI and nomination in simple language so employees and their families are not blindsided at the worst possible time?

The recent clarification by the Employees Provident Fund Organisation (EPFO) on the definition of "continuous service" under the Employees Deposit Linked Insurance Scheme (EDLI) necessitates immediate changes in HR and payroll processes.

Firstly, it's crucial to ensure meticulous data entry and management. HR and payroll teams must accurately record exit dates, joining dates, and wage details in EPFO systems. Any inaccuracies could lead to claim rejections, causing distress to employees' families during already challenging times.

Secondly, the importance of EDLI should be communicated to employees clearly. It's not just a footnote to PF but an insurance obligation with a direct human impact. Employers can conduct awareness sessions or workshops to explain the EDLI scheme and its benefits. This could include simple language explanations of terms like "continuous service" and the implications of job changes and breaks in service.

Thirdly, nomination forms should be properly captured and stored. Employees should be encouraged to update these forms whenever there are changes in their personal circumstances.

Fourthly, regular audits should be conducted to ensure compliance with the new rules. This includes checking that contractors covering site staff also meet these standards.

Lastly, HR teams should proactively communicate the new rules to employees, include EDLI coverage in onboarding and exit checklists, and run periodic reconciliations for high churn roles.

In summary, the recent EDLI clarification requires HR and payroll teams to be more diligent in data management, proactive in employee communication, and thorough in compliance checks.