New Delhi:
The Supreme Court on Monday asked the Union government to consider taking a decision within four months on revising the wage ceiling under the Employees’ Provident Fund (EPF) Scheme, noting that the limit has remained unchanged for the past 11 years. The court’s direction came while disposing of a petition that highlighted the exclusion of a large section of the workforce from social security benefits due to the outdated wage threshold.

A bench comprising Justices J K Maheshwari and A S Chandurkar passed the order on a plea filed by social activist Naveen Prakash Nautiyal. The petitioner had challenged the continued application of the ₹15,000 per month wage ceiling under the Employees’ Provident Fund Scheme, arguing that it no longer reflects current economic realities and violates the constitutional rights of workers.

Under the existing framework administered by the Employees’ Provident Fund Organisation (EPFO), employees whose wages exceed ₹15,000 per month are excluded from mandatory EPF coverage unless they were already members at the time of joining or are covered through voluntary arrangements. The petitioner contended that this ceiling has become unrealistic, particularly as minimum wages notified by both the central and state governments in several regions are now significantly higher than ₹15,000.

Appearing for the petitioner, advocates Pranav Sachdeva and Neha Rathi told the court that the wage ceiling had not been revised for more than a decade, despite repeated recommendations by expert bodies and parliamentary committees. Sachdeva argued that the stagnation of the wage ceiling has deprived a majority of workers of the benefits and protection of the EPF scheme, which is fundamentally a social welfare measure intended to provide financial security to employees in the organised sector.

The petition submitted that employees earning more than the prescribed ceiling are effectively excluded from availing themselves of EPF benefits, even though their wages may still be modest in real terms when adjusted for inflation, cost of living, and regional disparities. This exclusion, the petitioner argued, defeats the core objective of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.

After hearing the submissions, the bench disposed of the plea but directed Nautiyal to make a detailed representation to the central government within two weeks, enclosing a copy of the court’s order. The bench further directed that the central government should consider and decide the representation within a period of four months.

Nautiyal’s plea stated that it sought enforcement of fundamental rights guaranteed under Articles 14 and 21 of the Constitution, alleging arbitrariness and lack of transparency in the manner in which the wage ceiling under the EPF Scheme, 1952 has been revised over the decades. The scheme was framed under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 to ensure social security for employees in the organised sector.

The petition pointed out that the wage ceiling has historically been revised in an inconsistent and irregular manner, sometimes after gaps of 13 to 14 years, without any fixed periodicity or objective criteria. According to the plea, revisions have not been linked to relevant economic indicators such as inflation, consumer price index, minimum wages, per capita income, or broader economic growth.

“This erratic approach has resulted in the exclusion of large sections of the workforce, contrary to the object of providing social security to employees in the organised sector,” the plea stated. It also noted that both the Public Accounts Committee of the 16th Lok Sabha and an internal sub-committee of the EPFO had recommended periodic and rational revision of the wage ceiling to ensure wider coverage.

The petition highlighted that the EPFO’s own ‘Sub-Committee on Enhancing Coverage and Managing Related Litigation’ submitted a report in 2022 recommending a reduction in the coverage threshold, enhancement of the wage ceiling, and automatic enrolment of all employees as EPF members up to the revised ceiling. These recommendations, the plea noted, were approved by the EPFO’s Central Board in July 2022 but have since remained pending with the central government.

According to Nautiyal, the failure to act on these recommendations has perpetuated an exclusionary framework that increasingly leaves out workers who, despite earning more than ₹15,000 a month, still require social security protection. The petition argued that the revision of the wage ceiling over the last 70 years has not been consistent with any reliable economic metric, including minimum pay scales of central government employees, income tax exemption limits, growth in per capita net national income, statutory minimum wages, or annual inflation rates.

“A statistical analysis of the revision in the wage ceiling over the last 70 years shows that it has not been consistent with any of the above-mentioned metrics,” the plea said. It pointed out that while the wage ceiling remains frozen at ₹15,000, minimum wages in several parts of the country are considerably higher, resulting in reduced coverage of the EPF scheme and undermining the objectives of the parent legislation.

The petition further argued that the EPF framework has undergone a fundamental shift over time. In its initial three decades, the scheme functioned as a largely inclusive social security mechanism. However, over the past three decades, it has increasingly become exclusionary due to the failure to revise the wage ceiling in line with economic growth and rising wage levels.

“This is clearly reflected in the significant disparity between the number of workmen covered by the scheme at the time of its inception and the substantially reduced number of workmen covered by the scheme presently,” the plea said, adding that this trend runs counter to the constitutional mandate of ensuring social and economic justice.

While the Supreme Court did not issue a direct mandate to revise the wage ceiling, its direction to the Centre to consider the issue within a fixed timeline is being seen as significant. The order places renewed focus on a long-pending policy decision that affects millions of employees across the country.

The central government is now expected to examine the representation, along with existing recommendations from parliamentary committees and the EPFO’s Central Board, and take a reasoned decision within four months. The outcome of this process could have far-reaching implications for the scope of social security coverage under the EPF scheme and the financial security of workers in India’s organised sector.