Among the various initiatives that have been seen recently,
the PMRPY has been among the most discussed – for the opportunity that it
allows and also for the change that it expects to bring about. However, there has
also been a lot of ambivalence accompanying it, much of it stemming from
ambiguity in understanding its scope and extent. Through this note, we attempt
to deconstruct the PMRPY and help make it simpler and more inclusive.
The main objective of PMRPY is to help generate greater
employment, with the Government of India making a contribution of 8.33% EPS on
behalf of the company for the new employee.
Establishments with a valid organisational PAN qualify. All
payments will be made to the establishment through a bank account. Additionally,
the establishment must also have a Labour Identification Number (LIN) which is assigned
upon registry with the Shram Suvidha Portal. This is applicable only to
establishments who are already registered with the EPFO.
In order to avail this benefit, the establishment needs to
add the new employees to the reference base of workers. The Scheme has been in
operation since August 2016.
It is mandatory that the establishment have submitted their
ECR for March, 2016. The reference base is simply the number of employees for
whom the establishment deposited the EPF and EPS, together amounting to 12%, on
or before 31st March 2016. The details will be verified.
In order to be eligible for the benefits, the establishment
needs to show an increase in the number of employees on or after 1st
April, 2016. The benefits, however, will only be available to the new employees. Using the same reference
base and 31st March cut off, a calculation of new employees will be
made every subsequent year.
In the event that there has been no new employment, or the
establishment has witnessed a fall in employment in the subsequent months, they
will not be eligible for the scheme during those months.
For new establishments, or establishments that register with
the EPFO after 1st April 2016, the reference base is zero, with
every employee being considered new.
Under this scheme, a new employee is defined as one:
Who did not have a UAN prior to 1st
April 2016 (all UAN’s must be Aadhar seeded and verified)
Has not worked with an EPFO registered
organisation prior to 1st April 2016; and
Whose wages do not exceed Rs. 15,000 per month
in either the unskilled or semi-skilled category.
Extent of Validity
The Scheme will be operational for 3 years, and will cover
all new employees until such time, provided that the new employee continues to
be in employment under the same employer.
Process for Availing
Upon registry, the following procedure must be followed on a
Using the PMRPY form, the establishment must
update the PMRPY interface, on or before the 10th of every month. This
form includes a description of the job role, date of joining and date of exit
The form must be submitted by the 10th
of each month. In the event that the form is not submitted online before the
stipulated time, the employer will not be able to avail the benefits for the
Using the prescribed format, an undertaking must
be filled and duly signed by the employer.
Details of the new employee – like the UAN, its
seeding with the Aadhar number etc. will be validated and verified. After this,
the amount due against the new employee will be computed.
Until such time that ECR 2.0 is in operation,
contributions will be made directly into the account of the employer.
In case multiple ECR’s have been
filed by an establishment for the same period, only the first ECR filed and
submitted for the month by the employer would be considered.
If a supplementary ECR is filed
by the employer for the base month at a later stage, which leads to a
strengthening of the employee number in the base month, there is a chance that
the employer may become ineligible for the benefits during some, or all months,
for which the contribution has already been made. In this case, the employer
must refund the subsidy received for those months, along with penal provisions
which have been laid down in the EPF & Miscellaneous Provisions Act, 1952
and Schemes thereunder.
NIC – 2008
To avail benefits, it is compulsory
for the establishment to mention the nature of industry as per the National
Industrial Classification Code or NIC-2008. This code is assessed by the value
of products, services and activities carried out by the establishment. For
establishments that produce multiple products, the product which contributes
maximum value is taken. Where such classification is not possible, the revenue
of the establishment, services or the number of people deployed in the activity
may be considered.
Benefit to Textile Industry
A parallel scheme known as the
Pradhan Mantri Paridhan Rojgar Protsahan Yojana is targeted at the textile
industry, wherein the employers can also avail the 3.67% EPF contribution, over
and above the 8.33% contribution. The payment will be made after the employer
has credited the employees’ 12% EPF contribution with the EPFO. This is
particularly in favour of establishments dealing in the manufacture of wearing
apparel (NIC 1410 and 1430).
Sub-Sectors covered in the apparel sector
(1) NIC 1410: Manufacture of
wearing apparel, except fur apparel
a. NIC 14101: Manufacture of all
types of textile garments and clothing accessories
b. NIC 14102: Manufacture of rain
coats of waterproof textile fabrics or plastic sheetings
c. NIC 14105: Custom tailoring
d. NIC 14109: Manufacture of
wearing apparel not elsewhere classified
(2) NIC 1430: Manufacture of
knitted and crocheted apparel
a. NIC 14301: Manufacture of
knitted or crocheted wearing apparel and other made-up articles directly into
shape (pullovers, cardigans, jerseys, waistcoats and similar articles)
b. NIC 14309: Manufacture of
other knitted and crocheted apparel including hosiery
Availing PMRPY Benefits
Given below are the steps that should help you to avail the
benefits under the Pradhan Mantri Rojgar Protsahan Yojana
Login to the Employer Interface of the EPFO
Details of all new employees along with Aadhaar information
is to be filled for the relevant month. This can be done either individually or
through bulk registrations
UAN’s to be allotted to new members, and the
Aadhaar information must be approved by the employer through the DSC
Details of new members who have joined and are
eligible will now be added. The return will be signed digitally. This activity
must be completed and submitted either before the 10th of the
following month, or before submitting the ECR for the month, whichever is
earlier. It is only on fulfilling this condition that the contribution will be
Date of Birth
Date of Joining
Date of Exit
Employer logs in to the Employer Interface of
EPFO’s unified portal.
Employer files the ECR copy as is – without any
changes under the PMRPY Scheme. The system uses step 5 to ascertain whether the
benefit is to be extended or not.
A Challan is generated by the system after
adjusting the amount payable under the PMRPY.
The system then begins the procedure for
remittance of dues excluding the subsidy allowed under the PMRPY, as determined
by the Challan described in step 8.