The labour ministry may allow small companies with fewer than 20 workers to deduct only 9% of salaries towards provident fund (PF) instead of the mandatory 12%, seeking to reduce the burden on both employees and employers, who have to make a matching contribution. The move is being discussed following a government proposal to bring all companies employing between 10 and 20 workers under the ambit of the Employees’ Provident Fund Organisation (EPFO) to extend the social security net to hundreds of thousands of employees working in small factories. Currently, only companies with more than 20 workers are under the EPFO’s jurisdiction.
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