Biggest EPFO Update ! ₹15,000 Joining Bonus | Employment Linked Incentive Scheme | Budget 2024

Labour Law Advisor

26 Jul 202419:41

Summary

TLDRThe video script discusses a significant government initiative aimed at boosting employment and providing benefits to both new and experienced employees. It outlines various employment schemes including the EPFO's Scheme A and B, which offer incentives to employers for hiring freshers and partially cover salary costs. The schemes aim to provide liquidity support, with conditions attached to ensure job stability. The speaker, Rishabh Jain from the Labor Law Advisor channel, also shares his insights on the schemes' potential impact and eligibility criteria, encouraging viewers to subscribe and like for more informative content.

Takeaways

😀 The government has introduced a significant benefit scheme in the PF aimed at benefiting millions of employees and employers.
💼 The scheme is expected to provide a total benefit of INR 107,000 crores, transferring funds to both new and experienced employees.
📈 The government is offering a one-month salary bonus to employees as part of the scheme, with an additional 24% incentive on their salary.
🔑 For experienced employees, the government plans to provide benefits in the PF, with the eligibility criteria and personal opinions on the scheme to be discussed in detail.
🎓 The scheme covers new entrants to the workforce across all sectors, with an employment-linked incentive scheme to encourage companies to hire freshers.
💰 The primary benefit of Scheme A is a one-month salary of INR 15,000 as an incentive to employers for hiring new employees.
📝 There are eligibility criteria for the scheme, including a salary limit of INR 15,000 for PF coverage, and additional conditions for financial literacy courses.
🔄 The subsidy provided under the scheme may need to be refunded by the employer if the employment ends before 12 months.
🚫 The scheme does not apply to certain sectors like IT and trading, focusing instead on manufacturing units.
📉 Employers face risks under Scheme A, including the potential need to refund subsidies if an employee leaves before a year.
📚 The video promises a detailed discussion on the benefits, eligibility, and personal opinions regarding the scheme in the context of personal finance.

Q & A

What is the primary benefit of the government's PF scheme mentioned in the script?
-The primary benefit is a one-month salary incentive of INR 1500 for employers who hire freshers, aimed at encouraging them to provide learning opportunities and incentivize employment.
How much additional incentive will be provided to employers under the PF scheme for employees' salary up to 24%?
-An additional incentive of up to 24% of the salary will be provided, with the maximum benefit capped at INR 6000 per month for each eligible employee.
What is the estimated total benefit amount for the PF scheme discussed in the script?
-The total estimated benefit amount is INR 107,000 crore, which is expected to benefit both freshers and experienced employees.
What are the eligibility criteria for the first scheme (Scheme A) in terms of the salary of the employees?
-The eligibility criteria include that the employees must be newly entering the workforce in all formal sectors, and their basic salary or PF wage should be up to INR 1.5 lakhs.
What is the refund condition if the employment ends before 12 months under the PF scheme?
-If the employment ends before 12 months, the employer is required to refund the received subsidy in full.
What are the conditions for the second scheme (Scheme B) regarding the number of employees an employer must hire to be eligible?
-For Scheme B, employers must hire at least 50 additional workers or 25% more than their base line, which is determined by the average number of workers in the previous year.
What is the benefit period for the PF scheme mentioned in the script?
-The benefit period for the PF scheme is from 3 to 6 years, depending on the specific scheme and conditions met.
What is the purpose of the 'Presidency to Employment and Skilling' and 'Initiative to Facilitate Employment Skilling for 4.1 crore youth' mentioned in the script?
-The purpose is to provide a one-month wage to all persons newly entering the workforce, based on their enrollment in the EPFO, and to encourage skill development and employment in various sectors.
What are the potential issues that employers might face with the implementation of the PF scheme?
-Employers might face increased costs if a worker leaves before the completion of 12 months, as they are required to refund the full subsidy. Additionally, they may face difficulties in maintaining compliance with the scheme's conditions.
What is the script's stance on the potential impact of the PF scheme on the liquidity of employers?
-The script suggests that while the scheme may provide additional liquidity to employers, it also places significant financial risk on them, especially if employees leave before the end of the benefit period.
What is the script's opinion on the effectiveness of previous government schemes like PMRP and ABRY?
-The script acknowledges that previous schemes were quite successful, with benefits transferred to around 1 crore workers and a total benefit of INR 9200 crore under the EPFO.

Outlines

00:00

📢 Government Announces Massive PF Benefit Scheme

The Indian government has introduced a significant benefit scheme for the Employees' Provident Fund (EPF) that is expected to benefit millions of employees and employers. The scheme offers incentives for both freshers entering the workforce and experienced employees. The government is transferring a substantial bonus to employers, including a one-month salary payment for employees and a 24% salary increment as an incentive. Additionally, benefits for experienced employees are also being provided through the EPF. The scheme is so crucial that the speaker, Rishabh Jain from the Labor Law Educator channel, is compelled to make a video on it after two years. The video will delve into the benefits, eligibility criteria, and the speaker's personal opinion on the matter.

05:02

💼 Employment Linked Incentive Scheme Details

The script discusses the Employment Linked Incentive Scheme, which provides a one-month salary subsidy to employers for hiring freshers across all formal sectors. The primary benefit of Scheme A is a salary subsidy of INR 1 per employee, aimed at incentivizing employers to hire fresh talent. However, the script raises questions about the logic behind this incentive, as it seems more like a joining bonus rather than a learning curve subsidy. The scheme is expected to cover around one crore people and will run for two years, with benefits extending up to three years. The eligibility criteria for the scheme apply to all sectors, with a special focus on the manufacturing sector, excluding the IT sector and trading businesses. The script also mentions a potential risk for employers if the employment ends before 12 months, requiring a refund of the subsidy.

10:04

📈 Scheme B and C: Incentives for Employers and Employees

The script outlines Scheme B and C, which are part of the government's initiative to boost employment and skill development. Scheme B provides a partial contribution to employers for hiring new employees, with a focus on the manufacturing sector. The benefits vary depending on the employee's salary, with a maximum benefit of INR 6,000 per month for employees earning up to INR 25,000 per month. Scheme C, on the other hand, is aimed at all sectors and provides employers with a reimbursement of up to 12% of the salary for two years for new hires. The script also discusses the conditions for eligibility, such as maintaining a certain number of employees and the salary limit for the benefits to apply.

15:05

🔑 Key Points and Concerns about the New Schemes

The final paragraph summarizes key points about the new employment schemes and raises concerns about their implementation. The schemes aim to provide benefits to new hires with a salary cap of INR 1 lakh, with the government covering the employer's share of EPF contributions. The eligibility criteria are relaxed for small companies, allowing them to hire additional employees to qualify for the benefits. However, there are concerns about potential issues that employees might face, such as restrictions on EPF withdrawal during the scheme period and the risk of employers misusing the scheme for personal gain. The speaker also addresses the need for transparency and compliance in the implementation of these schemes to avoid problems faced in previous schemes.

Mindmap

Keywords

💡Government

The term 'Government' refers to the administrative authority responsible for implementing policies and schemes. In the video's context, it is the entity that introduces various employment and incentive schemes to benefit the citizens. For example, the script mentions schemes like 'PM Rozgar Protsahan Yojana' and 'Aatmanirbhar Bharat Rozgar Yojana', which are government initiatives.

💡Employment

Employment is a central theme of the video, denoting the state of having a paid job or occupation. The script discusses various government schemes aimed at boosting employment opportunities and providing financial incentives to employers and employees. The term is used in the context of schemes benefiting 'new entrants to the workforce' and 'experienced employees'.

💡Incentive

An incentive is something that motivates or encourages action. In the video, the government provides financial incentives to employers to encourage the hiring of new employees. The script mentions 'employment-linked incentives' and a 'one-month salary incentive' as examples of how incentives are used to stimulate employment.

💡PF (Provident Fund)

Provident Fund, commonly referred to as PF in the script, is a long-term savings scheme operated by the government where both employers and employees contribute a portion of the employee's salary. The video discusses how the government's schemes impact PF contributions and the benefits that flow from them, such as 'transferring the PF contribution' to the employee.

💡Salary

Salary is the fixed regular payment made by an employer to an employee, and it is a key aspect of the video's discussion on employment benefits. The script refers to salary in the context of government incentives, such as providing a 'one-month salary' to new employees and salary criteria for eligibility in various schemes.

💡Eligibility Criteria

Eligibility criteria are the conditions or qualifications required to be met to participate in a particular program or benefit. The video explains the various criteria for different employment schemes, such as salary limits and the requirement for employees to be 'newly entering the workforce' or 'experienced'.

💡Manufacturing Sector

The manufacturing sector is a key area of focus in the video's discussion of employment schemes. The script specifies that certain benefits are exclusive to this sector, highlighting the government's intent to support specific areas of the economy. For instance, the script mentions that benefits are available for 'manufacturing units' but not for the IT sector or trading.

💡Subsidy

A subsidy is financial assistance provided by the government to support a specific industry or activity. In the video, the government offers subsidies to employers as part of employment schemes, reducing their financial burden. The script uses the term in the context of 'subsidizing the employer's share' of the PF contribution.

💡Compliance

Compliance refers to the act of conforming to a set of rules or regulations. The video emphasizes the importance of compliance with government schemes, mentioning the need for employers to maintain proper employee records and adhere to the terms of the schemes to avoid penalties or disqualification.

💡Inspection

Inspection is the process of examining a business or activity to ensure it meets regulatory standards. The script discusses inspections in the context of government schemes, where employers may be subject to audits to verify their compliance with the scheme's requirements and the legitimacy of their claims.

💡Lock

In the context of the video, 'lock' refers to the restriction or suspension of certain employee accounts, preventing them from accessing benefits or making changes. The script mentions that employees were 'locked out' of their PF accounts under certain conditions, which could only be resolved through an inspection process.

Highlights

The government has introduced a significant benefit scheme in the PF, aimed at both new and experienced employees.

The scheme is expected to benefit around 2.90 crore employees and employers with an overall benefit of INR 10,700 crore.

Employers will receive a bonus of one month's salary for each employee, up to INR 24,000, provided by the government.

An additional incentive of 24% will be provided on the salary of employees, encouraging employers to retain staff.

The scheme is designed to cover a wide range of sectors, including IT and manufacturing, with specific benefits for freshers and experienced workers.

The eligibility criteria for the scheme are outlined, including salary limits and the requirement for employees to be enrolled in the EPFO.

The scheme's benefits are structured over a period of 2 to 6 years, depending on the duration of employment.

The government has previously introduced similar schemes, such as the Prime Minister's Employment Generation Scheme in 2016, which was successful.

The new scheme is nearly ten times larger than the previous ones, significantly expanding the scope of benefits available to workers.

The scheme A is designed to provide a one-month salary incentive to all employees newly entering the workforce across all formal sectors.

Employers are expected to hire at least 50 additional workers or 25% more than their base line to be eligible for the scheme's benefits.

The scheme B focuses on job creation, offering partial salary support to employers who hire new workers.

The scheme C is aimed at supporting employers with additional employment, providing reimbursements up to INR 300 per month for two years for each new hire.

The government's initiative is expected to boost employment and skill development, with a focus on compliance and record maintenance for employers.

The scheme's conditions include a requirement for employers to maintain a certain number of employees to continue receiving benefits.

Employers may face challenges with the scheme, such as the need to refund benefits if employment terminates before 12 months.

The scheme aims to provide additional liquidity to employers but questions remain about the actual benefits and potential administrative burdens.

The video provides a detailed analysis of the scheme's benefits, eligibility criteria, and the presenter's personal opinion on its impact.

The video concludes with a call to action for viewers to share their thoughts on the scheme and to subscribe to the channel for more informative content.