Why you may not qualify for EPS membership

The Employees' Provident Fund Organisation (EPFO) has updated its guidelines for employers regarding EPS membership eligibility. Previously, the wage ceiling was Rs 15,000, but it has now been raised to Rs 25,000. Employees earning up to Rs 25,000 must join EPS, while those earning more need to check their EPS membership status.

If an employee's wage is Rs 25,000 or less, EPS contribution is mandatory. Employers must make the applicable EPS contribution with EPF contributions. There's no need to check the employee's previous EPS membership status in this case.

However, if an employee was an EPS member and their current wages exceed Rs 25,000, they must mandatorily get EPS membership. If an employee is earning more than Rs 25,000 and was not an EPS member earlier, no EPS contribution should be made. In this case, the employee can continue with EPF contributions without being enrolled in EPS.

Employers must verify the Universal Account Number (UAN) of employees earning more than Rs 25,000 to determine if they were EPS members earlier. Incorrect or missed EPS deductions can cause issues for the member later, especially when settling pension or other claims.

The new wage ceiling of Rs 25,000 under the EPFO extends mandatory coverage to more employees. For example, an employee earning Rs 20,000 as monthly wage was previously outside EPF and EPS systems, but under the revised ceiling, they would be required to enroll in both, creating a more robust social security safety net.