Pradhan Mantri Garib Kalyan Yojana for Employers and Employees

To prevent disruption in the employment of low wage-earning employees and support establishments during the time of crisis due to COVID-19 Virus, the Central Government has come up with “Pradhan Mantri Garib Kalyan Yojana” Scheme (PMGKY), under which the Government has announced relief packages to employees and employers.

As the part of the said relief package, the Central Government will pay entire employees EPF contribution  (12% of wages)  and employer’s EPF & EPS contribution (12% wages) totaling 24% of the monthly wages into EPF accounts for the months of March 2020, April 2020 and May 2020 to those who earn monthly wage below Rs.15,000/-. The establishment which is having up to 100 employees, with 90% or more of such employees earning monthly wages less than Rs.15000/- are eligible for getting this relief.

Eligibility for availing Scheme benefits

I.                 For Establishments

• Establishment should already be covered and registered under the Employees’ Provident Fund & Misc. Provisions Act, 1952.
• Total number of employees employed in the establishment should be up to 100, with 90% or more of such employees should be drawing monthly wages less than Rs.15,000/-

II.               For Employees

• Employee should be employed in any eligible establishment earning monthly wages of less than Rs.15,000/-
• UAN of the employee should be seeded with his/her Aadhaar.
• Employee should be a member of EPF Scheme, 1952 & Employees’ Pension Scheme, 1995, whose contributions are received for any period during last six months (September 2019 to February 2020) in the ECR filed by any eligible establishment against his/her UAN.
• If the employer is already getting any benefit under any previous scheme and the employee is registered as beneficiary, then such employee is not eligible under this scheme.

What needs to be done for availing the benefits under PMGKY Scheme?

§  The employer should not make any deduction of employee’s share of EPF contributions from the monthly wages of any eligible employees for the month of March 2020, April 2020 and May 2020.

§  The employer should file only one valid Electronic Challan Cum Return (ECR) for each month (March 2020, April 2020 and May 2020 for claiming benefit.

§  The employer should file Form 5A (Ownership Return) electronically, which should contain details of all branches/departments and EPF Code numbers, if any, allotted separately to such branches/departments.

§  The employer should pay an appropriate employer-contribution  amount towards EDLI Scheme, 1976 and EPF administrative charges in respect of all employees as well as EPF & EPS contributions due in respect of ineligible employees as per the online challan, which can be seen once ECR gets uploaded.

Establishments which meets above said conditions, irrespective of whether it is a proprietorship, a partnership firm, private ltd or LLP can avail benefit from this scheme.

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Please feel free to reach out at chinprabhu@gmail.com in case you require any clarifications on the above


Author: C.Prabhu, Advocate, Madras High Court