The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is an Act of the Parliament of India that establishes a mandatory social security system for employees in the organized sector. It was enacted on March 4, 1952, and came into force on November 1, 1952, replacing the earlier Employees' Provident Funds Ordinance of November 15, 1951. The Act was created to solve the problem of providing for the future of industrial workers after retirement or for their dependents in case of early death, thereby inculcating a habit of saving.
The Act applies to every establishment that is a factory engaged in any industry specified in Schedule I and employs twenty or more persons, or any other establishment employing twenty or more persons as notified by the Central Government. It works by mandating the institution of three social security schemes: the Employees' Provident Fund Scheme, 1952 (EPF), the Employees' Pension Scheme, 1995 (EPS), and the Employees' Deposit Linked Insurance Scheme, 1976 (EDLI). Under Section 6, both the employer and the employee are generally required to contribute 12% of the employee's basic wages and dearness allowance to the EPF, with a portion of the employer's contribution diverted to the EPS. The Act is administered by the Employees' Provident Fund Organization (EPFO).
The Act is closely connected to the new Code on Social Security, 2020 (SS Code), which was intended to repeal and replace it. While the SS Code has been notified, the specific clause, Section 164(3), that repeals the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 has not yet been notified, meaning the original Act and its three schemes (EPF, EPS, EDLI) remain in force. However, the SS Code introduces a new definition of 'wages' which includes a "50% rule," where if the excluded components of remuneration exceed 50% of the total, the excess amount is deemed as wages for social security contributions. This change, once fully implemented, will significantly alter the basis for calculating contributions, which was a focus of litigation under the old definition of 'basic wage'.