Over 51 lakh additional employees will be brought under mandatory EPFO coverage. As per a senior EPFO official, this entails a “statutory obligation” for employers, significantly affecting their fund outflow.

According to the Periodic Labour Force Survey (PLFS) annual report for 2025, the average rural regular-salaried worker earned ₹17,841 a month. This is 40.1% below the new EPFO wage ceiling.

In contrast, the average urban regular-salaried worker earned ₹26,247 per month in 2025, which is above the revised wage ceiling by 4.7%. This shows that the rural workers have less to contribute and, therefore, less to accumulate.

However, the upside is that the higher ceiling could bring a larger share of the rural workforce within the social security ambit.

And the silver lining is that the ₹25,000 ceiling remains above the average rural monthly wage, keeping most regular-salaried rural workers within the EPFO coverage ceiling and potentially allowing them to benefit from the higher limit.

Widening Gap

The urban-rural gap is real and evident. The urban average income is 47.1% higher than the rural average.

While the purpose of hiking the wage ceiling was to bring more workers into the formal social security framework, the glaring urban-rural divide raises concerns about the extent of the coverage and whether it would bridge the divide.

The divide is sharper when gender is factored in. In 2025, rural female regular wage/salaried employees earned an average ₹13,208 a month, compared with ₹19,300 for rural men. In urban areas, the corresponding figures were ₹21,653 and ₹27,973 respectively.

So, this brings us back to an important question about the coverage expansion: how much of the 51 lakh additional employees expected to come under EPFO will be from rural India?

EPFO’s Rural Outreach, Digital Integration

In January 2023, the EPFO revamped its flagship grassroots outreach programme grievance redressal platform into a massive nationwide district outreach initiative designed to expand EPFO's presence across every single district in India.

The revamped Nidhi Aapke Nikat 2.0 has facilitated direct interaction between stakeholders and the authorities concerned on the 27th of every month, providing on-the-spot grievance redressal and creating awareness among the rural population.

In addition to such door-to-door campaigns and grievance redress mechanisms, the EPFO has also been aggressively pursuing digital integration into its fund withdrawal system to enhance efficiency and ensure seamless services. 

For instance, it recently raised the auto-settlement limit for eligible advance claims from ₹1 lakh to ₹5 lakh, allowing a larger number of claims to be processed without manual intervention. Around 84% of claims are currently settled through the auto-settlement route, significantly reducing the need for human intervention and shortening processing times.

Yet, the rural population remains in the dark, lament labour unions. According to senior representatives of the Indian National Trade Union Congress (INTUC), digital integration is a welcome and timely move, but it must at the same time be complemented by awareness among the people, particularly the rural population. 

“Before technology is integrated into the system, it has to be first and foremost brought to the rural people,” a senior labour leader told The Secretariat, and underscored the importance of creating more awareness among the rural people. “Many [in the rural areas] still do not have clarity about the working of the PF withdrawal system,” the labour leader pointed out.

Plugging The Gap

Without accurate information, accessible resources, and awareness, people in the rural areas would not even be able to fully benefit from the series of reforms carried out by the EPFO. Until then, the gap keeps widening.

In fact, the divide is not just about the difference in wages. In 2025, only 14.1% of rural workers were regular wage/salaried employees, compared with 47.6% in urban areas: the share of workers in regular salaried jobs was more than three times as high in urban India as that of rural areas, as per the PLFS report. Rural employment remained dominated by self-employment and casual labour, which together accounted for 85.9% of rural workers.

Even as the share of rural workers in regular salaried employment has risen from 12.1% in 2022 to 14.1% in 2025, it remains far below the urban share of 47.6%.

The wage ceiling is being raised precisely when the rural–urban divide is visible not only in earnings but also in the social composition. At this juncture, it is crucial to ensure that both awareness and access reach the people who need it the most. 

The challenge is whether a uniform national ceiling can adequately address an uneven labour market marked by a deepening rural-urban divide.