Here is What New Employment Generation Scheme Offers to Companies and Employees
The Centre has come up with a new job creation scheme under which subsidy will be provided to establishments that make new recruitments. The government would provide subsidy for retirement fund contributions by employees as well as employers for two years.
This move by the central government is aimed at creating jobs at a time when the economy is recovering from COVID-19 shock. It mainly focuses on employees belonging to the lower rung of the salary pyramid – those joining employment in EPFO-registered companies on monthly wages less than Rs 15,000.
Apart from new employees, the scheme covers those EPF members who moved out of the employment during COVID-19 pandemic from March 1 and are employed on or after October 1. These employees should also be drawing monthly wages of less than Rs 15,000.
For the subsidy, which will be provided through the Employees’ Provident Fund Organisation (EPFO), the Centre would have to spend around Rs 6,000 crore. If things go as per the plan, more than one million jobs over the next two years may be created.
Under this scheme, establishments with up to 50 employees will have to add a minimum of two new recruits for availing the benefit. On the other hand, companies with more than 50 employees will be required to hire a minimum of five new jobs.
The facility is extended under the Aatmanirbhar Bharat Rozgar Yojana. Every EPFO-registered company hiring new employees is eligible for the subsidy.
According to livemint, the government aims to incentivise employment creation for the lower strata as they were worst hit after the outbreak of the COVID-19 and putting in place of the nationwide coronavirus lockdown.
EPFO-registered establishments having up to 1,000 workers will receive 24 per cent EPF subsidy – 12 per cent each of the employers’ share and employees’ share. For companies with more than 1,000 employees, the government will provide 12 per cent share of the new employees added.