EPFO EO/AO 2023 General Ability Test · Question 26 of 120

Correct — D, (d) Rupees twenty-four thousand. The coverage ceiling of the Payment of Wages Act, 1936 lives in section 1(6), which says the Act applies to wages payable to an employed person in respect of a wage period if those wages average less than a specified sum per month. That sum is not fixed in the Act itself: the Payment of Wages (Amendment) Act, 2005 put it at Rs. 6,500 and, more importantly, gave the Central Government power to raise it by notification every five years on the basis of the Consumer Expenditure Survey figures published by the National Sample Survey Organisation. The Government used that power in 2012 to move the ceiling to Rs. 18,000 and again by a notification of 28 August 2017 to fix it at Rs. 24,000 per month, which took effect the following day. Rs. 24,000 has been the operative figure ever since, so an employee drawing up to that is within the Act. One wording point worth carrying into the exam hall: the statute frames the test as wages that 'average less than' the notified sum for the wage period, while this stem frames it as 'a maximum monthly wage of'. The paper's phrasing is looser than section 1(6)'s, and the transcription keeps it as printed. The figure asked for is the same figure either way.

• (a)Rupees fifteen thousand — This is the wage ceiling of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 — the statutory pay limit for mandatory EPF coverage, raised to Rs. 15,000 a month with effect from 1 September 2014. It is the number an EPFO candidate uses most often, which is exactly why it is offered here. It has nothing to do with the Payment of Wages Act.
• (b)Rupees eighteen thousand — This is the right statute but the superseded figure. Rs. 18,000 was the Payment of Wages Act ceiling fixed by notification in 2012, and it stood until the 2017 notification replaced it with Rs. 24,000. Any candidate revising from pre-2017 material will pick this one, which is the trap the option set is built around.
• (c)Rupees twenty-one thousand — Rs. 21,000 a month is the wage ceiling under two other labour statutes — coverage under the Employees' State Insurance Act, 1948 (raised from Rs. 15,000 with effect from 1 January 2017) and eligibility under the Payment of Bonus Act, 1965 (raised from Rs. 10,000 by the 2015 amendment). It is a real and current number, borrowed from the wrong Act.

Indian labour statutes each carry their own wage ceiling, and the ceilings are neither the same nor revised together. The Payment of Wages Act, 1936 is the statute that governs how and when wages are paid — the fixing of wage periods, the dates by which wages must be paid, and the closed list of deductions an employer may lawfully make — and section 1(6) decides who gets that protection. Because the ceiling is set by executive notification rather than by amendment, it moves without the Act's text changing, and reading the bare Act will not tell you the current figure. That is the whole design of this question.

This is the first question of the labour-law block, which is the heart of the EO/AO paper, and it opens with the most basic administrative fact of all: who is covered. An Enforcement Officer's daily work begins with coverage questions, so the paper tests the current threshold rather than the history. The habit rewarded is knowing the four ceilings — Payment of Wages, EPF, ESI, Bonus — as four separate numbers with four separate dates, because the distractors here are precisely the other three.

• Payment of Wages Act, 1936, section 1(6) — the Act applies where wages for the wage period average less than the notified monthly sum.
• Current ceiling: Rs. 24,000 per month, fixed by a Ministry of Labour and Employment notification dated 28 August 2017.
• Previous ceiling: Rs. 18,000 per month, notified in 2012; before that Rs. 6,500, set by the Payment of Wages (Amendment) Act, 2005.
• The 2005 amendment gave the Central Government the power to revise the ceiling every five years on the basis of Consumer Expenditure Survey figures published by the NSSO.
• EPF & MP Act, 1952 — statutory wage ceiling of Rs. 15,000 per month from 1 September 2014.
• ESI Act, 1948 — wage ceiling of Rs. 21,000 per month from 1 January 2017.
• Payment of Bonus Act, 1965 — eligibility ceiling of Rs. 21,000 per month, raised by the 2015 amendment.
• The Payment of Wages Act governs wage periods (section 4), time of payment (section 5) and permissible deductions (sections 7 to 13).

• Answering with the EPF ceiling of Rs. 15,000 out of habit. The statute named in the stem is what decides the number.
• Using Rs. 18,000, which was correct only between 2012 and August 2017.
• Assuming Rs. 21,000 is a wrong number. It is a real ceiling — for ESI and for bonus eligibility — attached to the wrong Act here.
• Reading the ceiling as 'not exceeding'. Section 1(6) speaks of wages that average LESS THAN the notified sum for the wage period.

Coverage thresholds are asked almost every year in EPFO EO/AO, either as a bare figure like this or embedded in an applicability question ('the Act shall not apply to…'). Keep a single revision sheet of statute, ceiling, section and date of last revision; almost every one of these items is answered off that sheet.

No directly related past PYQ was found.

• practice — not a real PYQ

  The power to enhance the wage ceiling under the Payment of Wages Act, 1936 by notification, on the basis of Consumer Expenditure Survey figures, is conferred by :

  • (a)Section 1(6)
  • (b)Section 4
  • (c)Section 7
  • (d)Section 15

  Answer(a) Section 1(6)

• practice — not a real PYQ

  The monthly wage ceiling for coverage under the Employees' State Insurance Act, 1948 is :

  • (a)Rupees fifteen thousand
  • (b)Rupees eighteen thousand
  • (c)Rupees twenty-one thousand
  • (d)Rupees twenty-four thousand

  Answer(c) Rupees twenty-one thousand