‘Don’t cut salaries’: Govt’s clear directive to companies as EPF wage ceiling rises

On September 17, the Indian government raised the Employees' Provident Fund Organisation (EPFO) wage threshold from Rs 15,000 to Rs 25,000. Alongside this policy change, the government issued a directive to companies explicitly instructing them not to reduce employee salaries to offset the increased contribution costs.

The revision is projected to extend mandatory social security coverage to over 10 million additional workers. By expanding the wage ceiling, the government aims to further the formalization of the workforce, as detailed in the official frequently asked questions released following the announcement.