Boost to new employment, the Ministry of Finance, in their Press release dated 12th November 2020, has announced a scheme of Atmanirbhar Bharat Rozgar Yojana (ABRY) under Atmanirbhar Bharat Package 3.0
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Key Features
- All Establishments registered under EPFO as of the date of the Press release shall be eligible for benefit under ABRY
- All establishment registered under EPFO after the date of the Press release shall be eligible for benefit under ABRY
- ABRY benefit will be available for eligible employees enrolled under EPFO during the payroll month of October 2020 to June 2021
- Any employee joining EPFO for the first time with wages less than 15,000/- shall be eligible for benefit under ABRY
- Any employee joining back EPFO, who had left the employment during the period from 1st March 2020 to 30th September 2020, shall be eligible for benefit under ABRY.
- The employer must seed Aadhar in UAN for the eligible employee.
- An establishment enrolling a minimum of two eligible employees during the payroll month shall be eligible for ABRY benefit if employee strength as per the returns filed is less than 50 for the payroll month of September 2020
- An establishment enrolling a minimum of five eligible employees during the payroll month shall be eligible for ABRY benefit if employee strength as per the returns filed is more than 50 for the payroll month of September 2020
- ABRY benefit shall be available for 24 months from the payroll month of enrollment of eligible employees.
- The establishment with an employee strength of less than 1000 as per the returns filed with EPFO for the payroll month of September 2020 shall get the credit of both employer (12%) and Employee (12%) contribution. Upfront credit will be given to the establishment while generating electronic challan cum return
- The establishment with an employee strength of more than 1000 per the returns filed with EPFO for the payroll month of September 2020 shall get the credit of employer (12%) contribution. Upfront credit will be given to the establishment while generating electronic challan cum return
- The Scheme is attractive and much needed, but it’s an Operational nightmare for implementation. Few of the key points which could take sleep of the nights
- If the employee strength is less than 1000, then an employee contribution of 12% will be funded by the government. An establishment would know the amount of funding/subsidy only with the generation of challan cum return. The establishment needs to have a mechanism to give credit for any funding/subsidy received back to the employee. Suppose the establishment chooses to provide the benefit to eligible employees at the time of processing the payroll. In that case, the establishment may lose money if it is not funded back because of multiple reasons.
- Irrespective of the employee strength, 12% of the employer contribution will be funded by the government. Most of the Establishment follows the CTC structure. Under the CTC structure, the employer’s contribution is also part of the salary, thus funded back to the employee. The funding of the employer’s contribution to the employee may move an eligible employee to an ineligible employee. Any employee with a monthly wage of 13,490/- OR above will have this concern.
- The updated date of exit is one of the critical factors for the EPFO system to determine the eligible employee. EPFO system shall consider all the employees who have left the establishment between 1st March 2020 to 30th September 2020 and rejoins back as an eligible employee only if the date of exit is updated.
- The entire funding/subsidy is based on the EPFO system to determine eligible employees. The seeding of Aadhar with UAN is a critical factor in assessing eligible employees. An establishment may come across cases where an employee earlier enrolled under EPFO without aadhar seeded in UAN. The EPFO system will consider employees as eligible employees subject to the fulfillment of other conditions. At a later date, the seeding of aadhar in earlier UAN may make an employee ineligible for ABRY. An employee moving from eligible employees to an ineligible employee will get into the recoveries from the establishments. Similar issues were there with the implementation of an earlier scheme so-called PMRPY.
- We are not sure how EPFO will deal with the determination of eligible employees for the payroll month of October 2020 and fund it back to the establishment. The generation of electronic challans cum return for the payroll month of October 2020 has already been completed
We expect the Office of EPFO to release an FAQ on ABRY shortly, which may answer some of our questions and clear our apprehensions.
