The Employees' Provident Fund Organisation issued a circular on Wednesday clarifying that weekends and public holidays between jobs will not be treated as breaks in service when processing death benefit claims, addressing a longstanding issue that had denied insurance payouts to families of deceased workers.

The December 17 clarification targets problems under the Employees' Deposit Linked Insurance scheme, where even brief gaps, such as a Saturday and Sunday between leaving one job on Friday and starting another on Monday, were being classified as service interruptions, according to the EPFO statement. This narrow interpretation has led to claim rejections or reduced payments despite employees having completed more than 12 months of total service across multiple employers.

New Rules on Continuous Service

Under the updated guidance, continuous spells of service separated only by Saturdays, Sundays, weekly offs, national holidays, gazetted holidays, state holidays, or restricted holidays will be treated as continuous service, provided both establishments are covered under the EPF & MP Act, 1952.

The pension regulator also confirmed that employment gaps of up to 60 days between two jobs will be considered continuous service. Additionally, EPFO raised the minimum payout to dependents or legal heirs to ₹50,000, even if the deceased member did not complete 12 months of continuous service and had an average PF balance below that amount.

The changes extend coverage to employees who die within six months of their last PF contribution, provided they remain on the employer's rolls. According to earlier EPFO announcements, these reforms are expected to benefit more than 1,000 death-in-service cases annually related to employment gaps, and over 5,000 cases involving deaths within the first year of service.

EDLI Scheme Background

The EDLI scheme provides life insurance coverage ranging from ₹2.5 lakh to ₹7 lakh for EPF members who die while in service. Employers contribute 0.5% of an employee's wages, capped at ₹75 per month, with no direct contribution required from employees. In fiscal year 2023-24, EPFO settled 74,576 EDLI claims, averaging 303 cases per day.