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The full implications of the high court’s ruling — including whether it reverses the entire 2014 notification — aren’t yet known, but employers’ costs could increase. The Employees Provident Fund Organisation (EPFO), which administers the Employees’ Provident Fund (EPF), has not yet responded to the ruling but likely will appeal it.
The EPS was established in 1995 for employees in the organized sector; all employees who are covered by the EPF scheme are eligible for the EPS. Participation in the EPF is mandatory for employees earning less than INR 15,000 per month. Pension contributions are distributed between the EPS and EPF — 12% of the employee’s salary goes to the EPF, and the employer’s 12% contribution is divided between the EPF (3.67%) and EPS (8.33%). Employees don’t contribute to the EPS.
Key features of the ruling include:
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