Guidelines for Implementation of Aatmanirbhar Bharat Rozgar Yojana in EPFO Registered Establishments

This update is in continuation of our client alert, dated November 19, 2020, regarding the Central Government’s new scheme (Scheme) under the Aatmanirbhar Bharat Rozgar Yojana to encourage economic growth which has been hit by the COVID- 19 pandemic.

In furtherance of the proposed Scheme, the Ministry of Labour & Employment, Government of India has on December 31, 2020 approved a set of guidelines (Guidelines) for the implementation of the Scheme. As per the Scheme, the Central Government will provide subsidy for twenty-four wage months in respect of eligible new employees, earning INR 15,000 per month at the following scale: (i) for establishments with an employee strength of up to 1,000, the Central Government will contribute the employer’s as well as the employee’s share of provident fund contributions aggregating to 24% of the wages (note that these establishments will continue to receive the subsidy of employer’s share even if the number of employees later exceeds the threshold of 1,000); (ii) for establishments already employing more than 1,000 employees, the Central Government will provide only the employee’s provident fund contribution. The subsidy will be directly credited into the Aadhaar-seeded EPF account (UAN) of the employee. The Guidelines also prescribe the eligibility criteria (for both employers and employees), the amount of benefit, certification/declaration by employers, and other procedures and instructions required to be complied with to avail benefits under the Scheme.

The number of employees for whom the employer has remitted contributions through the electronic challan-cum-return (ECR) for the month of September, 2020 will be taken as the reference base number for determining the eligibility of an establishment. For a new establishment which has got or getting registered  with the EPFO between October 1, 2020 and June 30, 2021, the reference base of workers will be treated as zero. Further, before registration of the establishment under the Scheme, the employer is required to ensure that the updated ownership return in the relevant form is filed with the EPFO.

The employers of eligible establishments are required to register new employees who have been hired between October 1, 2020 to June 30, 2021 under the Scheme. The benefit can be availed for only 2 years from date of registration of new employee.