Why in News
🗞️ Why in News The Ministry of Labour and Employment notified the Employees’ Provident Funds (EPF) Scheme, 2026 in the official gazette on June 29, 2026, framed under the Code on Social Security, 2020. It replaces the EPF Scheme, 1952 after about 74 years and is now being operationalised as part of the roll-out of the four Labour Codes.
The new framework retains the familiar architecture of provident fund savings while modernising definitions, compliance and digital reporting. It is not a fresh policy announced on a single day, but a recently notified scheme whose provisions are being brought into force through early July 2026.
From 1952 to 2026: A 74-Year-Old Framework Retired
The Employees’ Provident Fund Scheme, 1952 was the operative instrument under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, administered by the Employees’ Provident Fund Organisation (EPFO). With the Code on Social Security, 2020, Parliament consolidated nine central social-security laws (including the 1952 Act, the ESI Act, maternity benefit and gratuity laws) into a single Code. The EPF Scheme, 2026 is the subordinate scheme framed under Section 15 of that Code, and its notification is a key step in operationalising the Code.
| Feature | EPF Scheme, 1952 | EPF Scheme, 2026 |
|---|---|---|
| Enabling law | EPF & MP Act, 1952 | Code on Social Security, 2020 |
| Administering body | EPFO | EPFO |
| Employee contribution | 12 per cent of wages | 12 per cent (unchanged) |
| Employer contribution | 12 per cent of wages | 12 per cent (unchanged) |
| Above-ceiling coverage | Restricted | Voluntary coverage permitted |
| Compliance mode | Largely paper plus partial digital | Electronic returns, online claims, demat investments |
| One-time relief windows | None active | AMNESTY 2026, VISHWAS 2026 |
Contribution Rate Unchanged
A central reassurance is that the contribution rate remains 12 per cent each for the employee and the employer. Mandatory contribution for employees earning above the statutory wage ceiling is restricted to the ceiling amount, but employees may now make voluntary contributions on wages above the ceiling or contribute at a rate higher than 12 per cent.
New Definitions and Modernisation
The 2026 scheme adds and clarifies definitions, notably “authorised signatory”, “excluded employee” and “international worker”. International workers from countries with a bilateral social-security agreement (a Social Security Agreement, or SSA) with India can contribute where they seek detachment benefits under that agreement. The scheme continues membership of existing members, sets fresh membership rules for new employees and international workers, and prescribes revised electronic reporting and disclosure requirements, aligning provident fund governance with online returns, online claims and dematerialised investments.
Three Special Measures: Enrolment, VISHWAS and AMNESTY
The notification packages three time-bound measures aimed at widening coverage and clearing legacy disputes.
- Employees’ Enrolment Campaign, 2026: a drive to bring uncovered and under-reported workers formally onto the EPF rolls, advancing formalisation of the workforce.
- VISHWAS, 2026: a six-month (extendable) window offering reduced damages for pre-June 2024 contribution defaults, to settle long-pending disputes.
- AMNESTY, 2026: a parallel window allowing regularisation of establishments and PF trusts (recognised under the Income Tax Act) that were operating without a formal exemption notification, subject to audits and compliance conditions.
Analysis and Way Forward
The 2026 scheme is best read as labour-law consolidation that balances worker social security with ease of compliance. By keeping the 12 per cent rate untouched, the Centre avoids disrupting household savings while using AMNESTY and VISHWAS to pull informal PF trusts and defaulters into the formal net, expanding the contributor base. Permitting voluntary above-ceiling coverage nudges higher earners toward long-term formal savings, and the international-worker definition supports India’s SSA network and its mobile workforce abroad.
The larger unfinished agenda is universalisation: extending portable social security to gig and platform workers, whose coverage the Code on Social Security, 2020 enables but which requires further schemes and funding. The way forward lies in seamless number portability, a single social-security identity, timely operationalisation of the remaining three Labour Codes, and grievance redress that keeps pace with the new digital compliance regime.
UPSC Relevance
GS Paper 2: Government policies and interventions for development in the social sector; mechanisms and institutions for the protection of the vulnerable; welfare schemes and their design.
GS Paper 3: Growth and employment; formalisation of the economy; social-security architecture and labour reforms.
Prelims pointers:
- The Code on Social Security, 2020 consolidated nine central labour laws on social security.
- EPF is administered by the EPFO; contribution is 12 per cent each from employee and employer.
- AMNESTY 2026 targets exempted establishments and PF trusts without formal exemption; VISHWAS 2026 offers reduced damages for pre-June 2024 defaults.
- The EPF Scheme, 2026 was notified on June 29, 2026, replacing the 1952 scheme.
Mains question: The Code on Social Security, 2020 and its subordinate schemes seek to widen social-security coverage while easing compliance. Critically examine how the Employees’ Provident Funds Scheme, 2026 advances the formalisation of India’s workforce and the challenges that remain in extending coverage to gig and platform workers. (15 marks, 250 words)
Facts Corner
📌 Facts Corner, Knowledgepedia
- Notified: June 29, 2026, in the official gazette by the Ministry of Labour and Employment.
- Legal basis: framed under the Code on Social Security, 2020, which consolidated nine central social-security laws.
- Replaces: the EPF Scheme, 1952, after about 74 years.
- Administered by: the Employees’ Provident Fund Organisation (EPFO).
- Contribution: 12 per cent each for employee and employer, unchanged; voluntary coverage now allowed above the wage ceiling.
- New definitions added: “authorised signatory”, “excluded employee”, “international worker”.
- Special measures: Employees’ Enrolment Campaign 2026, VISHWAS 2026 (reduced damages for pre-June 2024 defaults), AMNESTY 2026 (regularising informal PF trusts and unexempted establishments).
- Four Labour Codes: Code on Wages, Industrial Relations Code, Occupational Safety Health and Working Conditions Code, and the Code on Social Security.
Sources: Ministry of Labour and Employment, EPFO, PIB, Business Today, Insights on India
Source: New EPF Scheme 2026 Replaces the 1952 Scheme — Ujiyari.com | Free UPSC & State PCS Current Affairs
