Stimulus package 3.0: Special EPF scheme for those who hire new employees amid COVID-19

To create more jobs, the finance minister Nirmala Sitharaman on Thursday announced a special subsidy scheme — Aatma Nirbhar Bharat Rozgar Yojana. Under the scheme, those establishments that make new hiring will get a special EPF subsidy from the central government. The EPF statutory subsidy will be given for a period of two years from the date of their employment during the above period.

Any new employee joining employment in EPFO registered establishments on monthly wage of less than Rs. 15,000 will be eligible to get the benefit. Employees contribution (12%) and employer's contribution (12%) totalling 24% of wages will be given to establishments, finance minister said.

Employees contribution (12% of wages) and employer's contribution (12% on wages) totalling 24% of wages will be given to establishments for two years. Every Employees' Provident Fund Organisation (EPFO) registered establishment taking new employees will be eligible to get the benefit of this subsidy. However, there are some pre-conditions that the employers must fulfill to avail the benefits announced under Aatma Nirbhar Bharat Rozgar Yojana.

The scheme will also cover EPF members drawing monthly wages of less than ₹15,000, who made an exit from employment during COVID-19 pandemic from 1 March, 2020 and is employed on or after 1 October, 2020.

The Aatma Nirbhar Bharat Rozgar Yojana will cover establishments registered with EPFO if they add new employees compared to the reference base of employees as in September 2020. The condition will be adding a minimum of two new employees for establishments with up to 50 employees. Those establishments with more than 50 employees, will have to give a minimum of five new jobs. The scheme would be applicable till 30 June, 2021.

"Atma Nirbhar Bharat 3.0 has been announced in the backdrop of improving economic activity. This move would go a long way in reducing the cost of production viewed in toto with the PLI scheme and other announcements," said Divakar Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP.

"We welcome governement's positive step towards helping people get their jobs back, it is a very appropriate time for people to get such support as the country gets back to business because of festivals including Diwali," said Dushyantt Kohli, COO, Khabri.