The Government of India has issued a press release which states that the Union Cabinet has approved an Employment Linked Incentive Scheme (ELI). This scheme will be applicable to jobs created between 1st August, 2025 and 31st July, 2027. This scheme has been introduced to support employment generation, enhance employability and social security across all sectors, with special focus on the manufacturing sector. Funds amounting to Rs.99,446 crore have been allocated to this scheme and it is set to create 3.5 crore jobs in a span of 2 years.
The scheme has been divided into two parts – Part-A and Part-B. Part-A is solely focused on incentives for first time employees and Part-B relates to support for employers.
PART-A: INCENTIVE TO FIRST TIME EMPLOYEES
Eligibility
The employee must be a first-time employee registered with EPFO and his salary can be upto a maximum of Rs.1 Lakh per month.
Features:
- Under this, the eligible employees will receive an incentive of one month’s EPF wage which can at maximum be Rs.15,000/-. This incentive will be paid to the employees in two instalments.
- The 1st instalment will be payable after 6 months of service.
- The 2nd instalment will be payable after 12 months of service and completion of a financial literacy programme.
- A portion of the incentive will be kept in a savings instrument of deposit account for a fixed period and can be withdrawn by the employee at a later date.
- All payments to the first time employees will be made through Direct Benefit Transfer (DBT) mode using Aadhar Bridge Payment System (ABPS).
PART-B: SUPPORT TO EMPLOYERS
Eligibility
The establishment must be registered with the EPFO.
- For employers having less than 50 employees, atleast two additional employees are to be hired on a sustained basis for atleast 6 months.
- For employers having 50 or more employees, atleast 5 additional employees are to be hired on a sustained basis for atleast 6 months.
Features:
- Employers will get incentives in respect of employees with salaries upto Rs.1 Lakh per month.
- Government will aid employers upto Rs.3000 per month for two years for each additional employee with sustained employment for atleast 6 months.
- For employers in the manufacturing sector, the incentive period will be extended to the third and fourth year as well.
- The incentive structure will be as under:
| EPF Wage Slabs of Additional Employee | Benefit to the Employer (per additional employ- ment per month) |
| Up to Rs.10,000* | Upto Rs.1,000 |
| More than Rs.10,000 and up to Rs.20,000 | Rs.2,000 |
| More than Rs.20,000 (upto salary of Rs.1 Lakh/month) | Rs. 3,000 |
*Employees with EPF wages up to Rs.10,000 will get a proportional incentive.
- Payments to the employers will be made directly into their PAN-linked bank accounts.
- The press release also states that, “With ELI Scheme, the government intends to catalyse job creation in all sectors, particularly in manufacturing sector, besides incentivizing youth joining the workforce for the first An important outcome of the Scheme will also be formalization of the country’s workforce by extending social security coverage for crores of young men and women.”
Gaurav Kumar
Advocate, Supreme Court of India
Editor : Labour Law Reporter
