EPFO expansion: How new Labour laws will impact gig workers and the self-employed

New Delhi: The central government is preparing to direct the Employees’ Provident Fund Organisation (EPFO) to introduce provident fund and pension schemes for self-employed individuals and gig workers following the rollout of the Code on Social Security, according to various reports.

Eligibility landscape and current gaps

Employees earning up to ₹15,000 per month in basic salary plus dearness allowance are mandatorily enrolled in the Employees’ Provident Fund (EPF) scheme. Those earning above this threshold may join voluntarily if their employers agree to contribute their share. Under the Employees’ State Insurance Corporation (ESIC), workers earning up to ₹21,000 per month are eligible for membership.

Trade unions have been pushing for both EPF and ESIC eligibility limits to be doubled. The Ministry of Labour and Employment is examining a proposal to increase the eligibility threshold, though it is unlikely to be doubled.

The EPFO presently covers only salaried employees in establishments with more than 20 workers and does not provide pension or provident fund schemes for self-employed individuals.

New scheme under the Code on Social Security

Last week, the Ministry of Labour and Employment notified all four new labour codes, including the Code on Social Security. Section 15(1)(d) empowers the Centre to provide social security benefits under this Code to self-employed workers or any other class of persons.

Under the plan, the EPFO is likely to draft a contributory provident fund and pension framework for self-employed workers, offering flexible payment options. The scheme is expected to deliver more benefits than existing programmes such as the Public Provident Fund.

Provision for gig and platform workers

In the Code on Social Security for gig and platform workers, aggregators will be required to contribute 1–2 per cent of their turnover to a social security fund supporting pension, insurance and provident fund benefits. The EPFO is to design the framework for this scheme as well.