When a good chunk of workers in Tirupur knitwear cluster are presently being employed on contractual basis/daily wages, the new budgetary proposal on Employee Pension Scheme (EPS) contribution is going to provide a win-win situation for workers and employers.
Contribution
The budget document had stated that the Union Government would pay the EPS contribution of 8.33 per cent for all new employees enrolling in the Employee Provident Fund Organisation for the first three years of employment.
“This step will act as catalyst to bring more employees into the regular payroll as well as create more jobs in the formal sector,” said S. Dhananjayan, an industry consultant and chartered accountant.
Now, many employees too did not want to be in the regular payroll as they were not willing to pay the EPF contribution from their meagre salaries.
Burden
So, many employers too did not want to bear the burden of paying that share towards the EPF from their resources.
The new proposal is going to change the situation and it would be helping the employers too in a significant way.
“Only if we bring the employees into regular payroll, such strength can be shown to the foreign buyers who usually look for the employee strength in the ‘regular payroll’ to assess whether adequate workforce is available with us to execute a particular order in time or not. At the same time, the workers who usually move from one unit to another too will show the inclination to join the EPF scheme,” said Raja M. Shanmugam, an apparel exporter and state council member of Confederation of Indian Industry.
Contribution
The budget document had stated that the Union Government would pay the EPS contribution of 8.33 per cent for all new employees enrolling in the Employee Provident Fund Organisation for the first three years of employment.
“This step will act as catalyst to bring more employees into the regular payroll as well as create more jobs in the formal sector,” said S. Dhananjayan, an industry consultant and chartered accountant.
Now, many employees too did not want to be in the regular payroll as they were not willing to pay the EPF contribution from their meagre salaries.
Burden
So, many employers too did not want to bear the burden of paying that share towards the EPF from their resources.
The new proposal is going to change the situation and it would be helping the employers too in a significant way.
“Only if we bring the employees into regular payroll, such strength can be shown to the foreign buyers who usually look for the employee strength in the ‘regular payroll’ to assess whether adequate workforce is available with us to execute a particular order in time or not. At the same time, the workers who usually move from one unit to another too will show the inclination to join the EPF scheme,” said Raja M. Shanmugam, an apparel exporter and state council member of Confederation of Indian Industry.