Employment Linked Incentive (ELI) Scheme.pptx

Employment Linked Incentive (ELI) Scheme.pptx

• 1.
  ELI Scheme Ata Glance • Total Outlay: 99,446 Crore. ₹ • Benefits to manufacturing sector for 04 years and 02 years for other sectors • Targeted Job Creation: 3.5 Crore jobs • Schemes Implemented through EPFO • Scheme has two Parts viz. Part A – (First-Timers) and Part B- for Employers • Date of Start of Scheme – 1st August 2025 • Registration Period: 1st August 2025 – 31st July 2027
• 2.
  Incentivize additional employmentin formal sector and sustain it. Catalyze employment generation across all sectors Additional Focus on job creation in the manufacturing sector. Promote employability and formalization of workforce. Enhancing social security coverage of workforce. Strengthen financial literacy 2 ELI Objectives
• 3.
  3 • Financial supportfrom Government for first timers; • More Youth in formal workforce; • Social security benefit coverage for first-timers; • Financial literacy skills; • On job training making First-timers employable; • Improved employability through sustained employment 1. Employee 2. Industry • Offset cost of additional job creation; • Enhanced workforce productivity; • Incentivize coverage of social security net. Benefits of the Scheme
• 4.
  Part A –Incentives for First-Timers Eligibility • First Timers with Monthly Gross salary ≤ ₹1,00,000. • Not for Employers • Applicable to employees of Exempted Establishments i.e. exempted under section 17 of EPF&MP Act, 1952 and manage the Provident Fund /Pension Fund corpus through their own trust. Incentive Structure • One-month wage(Basic+ DA) up to ₹15,000 in two instalments: • 1st Instalment: Payable after 6 months of Electronic Challan-cum-Return(ECR) filing. • 2nd Instalment: Payable after 12 months of ECR filing + completion of mandatory Financial Literacy Course. • To promote habit of saving, 2nd Instalment will be retained in a savings instrument/deposit account and available for withdrawal after a fixed period of time. Ministry will issue directions. Incentive periodicity One time Registration Period 2 years – (01.08.2025 to 31.07.2027) Payment Mode In Bank account of Employee :Direct Benefit Transfer (DBT) via Aadhaar Bridge Payment System (ABPS)
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  Why Part A? ⮚Facilitate hiring of first-time employees; ⮚ Unemployment for first-timers is over 9% although the overall unemployment is 3.2% ⮚ Employers hesitant to take first-timers –lack of basic skills, low productivity – “UNEMPLOYABLE” ⮚ High Attrition – which hinders skill formation and no productivity gains for employer ⮚ What does the incentive do? ⮚ Partially offset the initial costs of taking up the job – search cost, transportation, housing etc. ⮚ Behaviour Change - Pushes the employees to stay for at least 6 months, which leads to skill formation and chances of higher salary on re-employment 5
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  Part B –Incentivizing Additional Jobs Creation Eligibility • All establishments registered with EPFO (including exempted). • Threshold : • At least 2 additional employees (for establishments with <50 employees). • At least 5 additional employees (for establishments with ≥50 employees). • Sustained employment for at least 6 months • Additional employee can be a first timer or rejoinee Incentive Structure Incentives on monthly wage slabs per additional employee with gross wage up to Rs.1Lakh/month: *Up to ₹10,000 wage: 10% of wage Incentive Duration 2 years for all sectors, 4 years for manufacturing. Payment Mode In Bank account of Establishments: DBT to PAN-linked bank accounts Wage (Basic+DA)Slabs Employer Incentive (Per Month Per Additional employee) Incentive (For 12 months) ≤ ₹10,000 Upto Rs 1,000 Up to ₹12,000 > ₹10,000 to ≤ ₹20,000 ₹2,000 ₹24,000 > ₹20,000 to ≤ ₹1,00,000 ₹3,000 ₹36,000
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  Why Part B? ⮚Incentivize employer for additional job generation ⮚ 80% of the incentive directed at Employer as they create jobs ⮚ Employers do respond to incentives ⮚ Labour-intensive sectors have higher percentage of labour cost; Hence incentive lead to more hiring ⮚ Such schemes work on the margins; Reduced marginal cost leading to additional employment; Automation vs. Labour ⮚ Behaviour Change - Pushes the employers to sustain job for at least 6 months, which leads to skill formation for employees and chances of higher productivity for employer 7
• 8.
  Common Features Coverage AllEPFO-registered establishments, including exempted. Periodicity Incentives in lumpsum after every six months . Baseline • Establishments registered with EPFO for more than 12 months: Average number of employees for 12 previous months i.e. upto wage month of July, 2025. • Establishment registered with EPFO for less than 12 months: Average number of employees for all months upto wage month of July, 2025. • Establishment registered in EPFO during the scheme registration period: 20 Additionality • Additional jobs created above the baseline as per defined Threshold: ✅ Minimum 2 additional jobs if baseline employment is less than 50 employees ✅ Minimum 5 additional jobs if baseline employment is 50 employees or more • The employees against these additional jobs are sustained for at least 6 months.
• 9.
  Common Features Additionality Allthe new employees whose Gross Wage exceeds Rs 1 lakh, will be counted for the purpose of deciding the additionally & eligibility of the employer, but no benefit will be provided in respect of them. First Timer Any employee who joins the establishment after 01.08.2025 and their contribution is received for the first time in EPFO/Exempted trust Compliance Requirements • Employer : Submission of GST, PAN linked bank account details; • Employee: UAN authentication with Face Authentication Technology (FAT) and Aadhaar linked Bank Account using UMANG App.
• 10.
  COUNTRY SCHEME TARGETOUTCOMES Singapore • Job creation/retention during COVID-19 recovery, with focus on SMEs and mature workers (40+). • a 12.1%–13.6% wage increase for local hires; • 70% of beneficiaries were SMEs, with improved job retention for mature workers. Malaysia • Targets youth (15–30), women, persons with disabilities and unemployed aiming for job placements in manufacturing, IT, and services. • Achieved job placements, reduced youth unemployment South Korea • Targets youth aged 15–34 in SMEs across digital technology, green industries, and backward areas, aiming to create quality jobs while reducing unemployment and improving job retention in SMEs. • Reduced youth unemployment with a 12– 15% improvement in youth retention rates. Germany • Targets long-term unemployed, disabled, and refugees to reduce long-term unemployment. • Reduced long-term unemployment with beneficiaries primarily placed in manufacturing, care, and service sectors. Australia • Targets young workers aged 16–35 aiming to create new jobs in retail, hospitality, and construction for post-COVID recovery. • Reduced youth unemployment International Experience
• 11.
  How to avail:Employees UAN Activation Activated through Aadhar based Biometric Authentication using FAT on UMANG. Aadhaar Seeding Bank account to must be Aadhaar seeded Financial Literacy Complete Financial Literacy Course before 12 months. After the first instalment is disbursed, the Financial Literacy Course is automatically enabled in the member’s EPFO dashboard. • Log in using UAN and registered mobile number. • Go to ‘My Dashboard’ → ‘Learning Section’ • Click on Financial Literacy for ELI Members and enroll. • Watch all video modules and complete the course • On successful certification, the member becomes eligible for the second instalment
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  How to avail:Employers PAN Details : provide their valid PAN. GST Details : provide their GST registration details. PAN Seeding : Bank account of establishment must be seeded to PAN account. Filing of Monthly ECR in time is a must
• 13.
  Total Investment Corpus- Rs 28.02Lakh Crore 6.02 Cr. Claims settled Total settled amount ~ Rs. 2.41 Lakh Cr. Serves 81.48 Lakh Pensioners More than 67.53 Lakh Central Govt. Pensioners 21 Zonal Offices, 150 Regional Offices, 114 District Offices, 05 SSOs, and 04 Service Centers 01 02 03 04 05 A statutory Organisation under MoL&E administers EPF & MP ACT, 1952 *Provisional Data as on 31.03.2025 EPFO AT A GLANCE EPF & MP ACT, 1952 Applies to establishments having 20 or more employees Applicable to* employees with monthly wages up to Rs.15000. Provides for 3 Schemes: (EPF 1952, EPS 1995, EDLI 1976) 7.83 Cr. Contributory Members 7.98 Lakh Contributory Establishments. Interest for 2024-25 : 8.25 % *wage ceiling of Rs. 15000 is not applicable for ELI
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  THANK YOU