EPFO - ELI Scheme: A Boost for Employment Creation. (Expected Launch 25th Dec 2024)


Introduction
The PF - ELI Scheme was introduced as part of the Union Budget 2024-25, presented by the Hon'ble Finance Minister. This initiative aims to significantly enhance employment creation within the organized sector by promoting the hiring of first-time employees and supporting various sectors. The scheme encompasses three distinct initiatives designed to incentivize both employers and employees, ultimately fostering a robust workforce and stimulating economic growth.

Expected Launch Date by EPFO : December 25, 2024  
Further details regarding the ELI Scheme are expected to be available by the last week of November 2024 or the first week of December 2024.

Scheme A: Support for First-Time EPFO Subscribers

• Eligible Establishments : 
- All establishments
• Eligible Employees : 
- First-time EPFO subscribers earning less than ₹1 lakh per month
• Conditions for Benefits : 
- Retention of employees for at least 12 months
• Expected Beneficiaries : 
- 210 lakh employees
• Payable to : 
- Employees
• Enrollment Duration : 
- 2 years
•  Benefits : 
- One month’s wage upto ₹15,000 to be paid over a period of 3 years
• Other Conditions : 
  - Subsidy will be provided in three installments.
  - Employees must complete an online financial literacy course to claim the second installment.

Scheme B: Incentives for Manufacturing Sector Employment

• Eligible Establishments : 
   - Corporate manufacturing entities
   - Non-corporate manufacturing entities with 3 years of EPFO contributions
   - Must hire either 50 employees or 25% of the previous year’s EPF employee count, whichever is lower
• Eligible Employees : 
- First-time EPFO subscribers earning less than ₹1 lakh per month
• Conditions for Benefits : 
- Retention of employees for at least 12 months
• Expected Beneficiaries : 
- 30 lakh employees
• Payable to : 
- 50% to employees, 50% to employers
• Enrollment Duration : 
- 2 years
•  Benefits : 
- EPF contribution for wages update to ₹25,000:
  - Year 1 : 24% (12% from employee + 12% from employer)
  - Year 2 : 24% (12% + 12%)
  - Year 3 : 16% (8% + 8%)
  - Year 4 : 8% (4% + 4%)
• Benefits Period : 
- 6 years
•  Other Conditions : 
- Employers must maintain the required level of employment; failure to do so will result in the cessation of subsidy benefits.
- Employees must be directly employed by the company (in-sourced employees).
- This subsidy is in addition to Scheme A benefits.

Scheme C: Encouraging Net Employment Growth

• Eligible Establishments : 
   - Must show a net increase in employment
   - For establishments with fewer than 50 employees, a minimum increase of 2 employees is required
   - For those with 50 or more employees, a minimum increase of 5 employees is required
• Eligible Employees : 
- All new hires (both first-time and re-joinees) earning less than ₹1 lakh per month
• Expected Beneficiaries : 
- 50 lakh employees
• Payable to : 
- Employers
• Enrollment Duration : 
- 2 years
• Benefits : 
- Employer PF contribution of up to ₹3,000 per month for 2 years
- Employers creating over 1,000 jobs will receive quarterly reimbursements and an extended subsidy benefit for the 3rd and 4th years, similar to Scheme B
• Benefits Period : 4 years (6 years for establishments creating over 1,000 jobs)
• Other Conditions : 
- Not applicable for employees already covered under Scheme B.
- This subsidy is in addition to Scheme A benefits.

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