by Elton Gomes
Workers in the Formal Sector will not be able to withdraw full PF
Formal employees in India might only be able to partially withdraw their provident fund (PF) savings in the near future. This will be the result of the Employees’ Provident Fund Organisation (EPFO)’s move to create a social security cover for formal sector workers.
According to the EPFO’s proposal, its subscribers will only be allowed to withdraw 60 percent of their total savings. The organization has been concerned about the high level of PF withdrawals and seeks to place a restriction on complete withdrawal of savings. The EPFO has emphasized on the creation of a social security cover for employees.
45 crore informal workers to be covered under free Social Security
Around the beginning of 2018, the Indian Express reported that the Centre was preparing a blueprint for a social security scheme specifically aimed at informal workers. The proposal drafted by the Ministry of Labour & Employment intended to develop a universal coverage that included those outside the ambit of EPFO and the Employees’ State Insurance Corporation (ESIC). The draft scheme included mandatory pension, insurance against disability and death, and maternity coverage; in addition, medical and unemployment coverage was also included.
As per the Indian Express report, the scheme could be launched later in 2018. “At the present moment, in both EPFO and ESIC, the employer contributes, and equal amount is contributed by the employee also. If you are covering the entire population, there will be one segment which will not be able to contribute at all. Now, for the segment below the poverty line, the government plans to foot the entire bill, in which case it has to be shared between the states and the Centre. So we need to bring the states on board,” a senior official from the labour ministry told the Indian Express.
Similar to security cover for employees in the West, over 45 crore workers in India might soon get social security cover that would cover potential risks at work and healthcare. The Economic Times reported that the social security cover would include loss of income, death and disability, illness and medical bills, and unemployment benefits for all employees. As per the proposal by the labour ministry, social security contributions would be compulsory.
Domestic help will not be left behind
In October 2017, the India Express reported that the government is planning to formulate a national policy for domestic workers. The policy is being developed with an aim to expand the scope of applicable legislation, policies, and schemes such as minimum wages and skill development programmes. Additionally, the policy will clearly define part-time workers, full-time workers, live-in workers, employers and private placements agencies.
According to the notice, the policy intends to have an institutional mechanism in place for social security cover, fair employment terms, grievance redressal, and resolution of disputes. The policy aims to recognize domestic workers as workers with the right to register themselves with the state labour department or any other relevant mechanism.
Elton Gomes is a staff writer at Qrius
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