The Hindu : EPF Board plans unemployment insurance

Online edition of India's National Newspaper
Tuesday, Jul 09, 2002

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National

EPF Board plans unemployment insurance

By Our Special Correspondent

NEW DELHI JULY 8. The Central Board of Trustee of EPF which meets here tomorrow will give the green signal for changes in the Employees Provident Fund and Miscellaneous Provisions Act, besides approving a proposal for the introduction of a multi-benefit employees insurance scheme by the Employees Provident Fund Organisation.

Sources said the proposed scheme wiould benefit those EPF members who lose their jobs due to economic restructuring. It has been vetted by the executive committee of the CBT.

The change in the law will help convert the existing Employees Deposit-Linked Insurance Scheme, 1976, to the Multi-Benefit Employees Insurance Scheme. Under the new arrangement, the existing death benefits will be retained without any alteration.

Any employee who loses the job as specified will be entitled to a monthly unemployment insurance benefit for a specified period subject to graded rates linked to the age and membership. A small contribution both by employer and employees during the tenure of employment is envisaged by the scheme.

After deliberating extensively, the executive committee recommended that employers will contribute 1.25 per cent and employees 0.5 per cent of the wage to the new scheme. It has also been suggested that the Government make a contribution at least at the rate of 0.25 per cent so that half of the last wage for one year can be given as employment insurance to the member. Other proposal likely to be considered by the CBT include changes to take care of the movement of workforce from the formal to the informal sector because of the increase in the outsourcing of work and policy changes for increasing coverage, reducing the threshold limit for coverage, strengthening of the dispute resolution mechanism and empowering the authorities to gather information from third-party sources to detect under reporting and non-reporting and securing hep from law enforcement agencies for securing compliance.

It is also proposed to regulate the exempted trusts by replacing the word `exempted' with the word ` permitted' to provide for the automatic cancellation of permission in the event of the default and to recover past accumulations and interest.

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