The central government has officially notified the Employees’ Provident Funds Scheme, 2026 under the Code on Social Security, 2020, replacing the seven-decade-old Employees’ Provident Funds Scheme, 1952. The new framework introduces a digital-first approach, clearer partial withdrawal rules, stronger governance for exempted establishments, and mandatory EPF coverage for contract workers.
Digital-First Administration Becomes Standard
The 2026 scheme mandates electronic maintenance of accounts, online member access, electronic filing of returns and claims, and electronic settlement of benefits. Paper-based processes are effectively replaced by a fully digital framework, aiming to reduce delays and improve transparency. EPFO will now operate with digital records as the default, and members can access their accounts and submit claims online.
Contract Workers Gain Legal EPF Eligibility
One of the most significant changes is the explicit legal eligibility of contract workers for provident fund benefits. The primary employer (principal employer) now holds ultimate responsibility for ensuring that contractors deposit the mandatory 12% EPF contributions on time, even if the contractor pays wages directly. This provision aims to plug a long-standing gap in social security coverage for millions of contract labourers.
Partial Withdrawals and Emergency Contribution Relief
EPFO members can now make non-refundable partial withdrawals using EPF Form 31 under the new scheme. Additionally, the government has gained authority to temporarily reduce or defer EPF contributions during emergencies such as a pandemic, national disaster, or severe natural calamity. This provision offers relief to employers during crises while protecting employees' long-term savings.
Strengthened Governance for Exempted Establishments
The regulatory framework for exempted establishments operating their own provident fund trusts has been significantly strengthened. The revised provisions prescribe detailed requirements for the constitution and functioning of boards of trustees, electronic maintenance of accounts, investment of trust funds, annual audits, online claim settlement, periodic reporting, and renewal or cancellation of exemptions. Transfer of accumulated balances upon surrender or cancellation of exempted status is also addressed.
Mandatory annual audits with defined reporting timelines and audit rotation are now required. Stronger penalties for delayed returns, non-compliance, and governance failures have been incorporated to enforce accountability.
International Workers and Contribution Cap
Provisions for international workers are consolidated under India’s social security agreement framework. Employees covered under bilateral Social Security Agreements (SSAs) continue to receive treaty-based benefits, while detached workers from countries with reciprocal agreements may remain exempt from Indian EPF contributions where applicable. International workers opting to avail benefits under bilateral agreements may contribute their entire wages instead of the statutory wage ceiling.
While the new framework largely retains the existing contribution rate and wage ceiling, it introduces a change: mandatory EPF contributions will be capped at Rs 1,800 per month for employees earning above the statutory wage ceiling. Any contribution beyond that will only occur if both the employee and employer agree voluntarily.
Background and Implementation
The Employees’ Provident Funds Scheme, 1952 had governed retirement savings for over 74 years. The new scheme, notified under the Code on Social Security, 2020, represents a comprehensive modernisation. The government stated that the changes aim to improve ease of compliance, enhance transparency, and extend social security coverage to previously excluded workers. The scheme is effective from the date of notification, with transitional provisions for existing exempted establishments to align with the new requirements.
