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Hoping to boost formal sector job creation, the Union Budget 2018-19 has proposed that the government will contribute contribution to provident fund for new workers for a period of three years.
“The Government will contribute 12 per cent of the wages of the new employees in the Employees Provident Fund for all the sectors for next three years,” Finance Minister Arun Jaitley said in his Budget speech on Thursday, adding that the facility of fixed term employment will be extended to all sectors.
Further, to incentivise employment of more women in the formal sector and to enable higher take-home wages, the Budget has proposed to amend the EPF Act to reduce women employees' contribution to eight per cent for first three years of their employment. At present, they have to contribute 12 per cent or 10 per cent of their wages to PF.
The employer’s contribution will continue at 12 per cent.
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