Implementation of the Employment Linked Incentive (ELI) Scheme – Effective August 1, 2025

Dear All,

We wish to inform you that the Employment Linked Incentive (ELI) Scheme will come into effect from August 1, 2025.

Key Highlights:

• Objective: Promote formal employment, enhance employability, and expand social security coverage, with a focus on the manufacturing sector.
• Target: Creation of 3.5 crore jobs over two years (Aug 1, 2025 – Jul 31, 2027).
• Budget Outlay: ₹99,446 crore.
• Implementation Agency: Employees’ Provident Fund Organisation (EPFO).

Scheme Structure:

1. Part A – Incentive for First-Time Employees

• Applicable to first-time EPFO registrants earning up to ₹1 lakh/month.
• Incentive: One month’s EPF wage (max ₹15,000) paid in two instalments:
  • After 6 months of service.
  • After 12 months + completion of a financial literacy program.
• Payment via Direct Benefit Transfer (ABPS).

2. Part B – Support to Employers

• For EPFO-registered employers hiring new employees with salaries up to ₹1 lakh/month.
• Incentive: Up to ₹3,000/month per additional employee for 2 years
  • Extended to 3–4 years for manufacturing sector.
• Minimum new hires required based on employer size.
• Employees must be retained for at least 6 months.
• Payment to employer’s PAN-linked bank account.

Important Compliance Points:

• EPFO registration and Aadhaar seeding mandatory – deadline June 30, 2025.
• Ensure accurate wage reporting from August 2025.
• Incentives are linked to continued employment; early termination may lead to penalties or exclusion.

Hope the above alert is helpful. Kindly let us know if you need any clarifications in this regard. Detailed Scheme is attached herewith for your reference.