Introduction to EDLI Wages
Employees’ Deposit Linked Insurance (EDLI) is a non-refundable plan offered by the Employees’ Provident Fund Organisation (EPFO). It was introduced by the Indian government to provide wage protection to employees and their dependent families in the event of their untimely or accidental death or retrenchment.
EDLI is a scheme that helps protect employees’ salaries from any accidents or other workplace-related calamities that may occur. The EDLI wages is calculated based on a percentage of the employee’s salary at the time when the death or retrenchment occurs, and is paid directly to the deceased employee’s family or beneficiary.
Calculation of EDLI Wages
EDLI wages are calculated by taking the average of the basic wages and dearness allowance earned by the employee in the 12 months preceding the month in which the death or retrenchment occurred and multiplying this sum by the percentage of wages prescribed under the scheme.
Significance of EDLI Wages
EDLI wages serve to protect employees and their dependents from unforeseen tragedies or retrenchment. It provides a reasonable amount of compensation when the employee passes away or is laid off due to a job discontinuation in the organisation. The amount of EDLI wages helps to alleviate the financial burden for the family of the deceased employee or retrenched employee.
FAQs
What is EDLI?
Employees’ Deposit Linked Insurance (EDLI) is a non-refundable plan offered by the Employees’ Provident Fund Organisation (EPFO). It was introduced by the Indian government to provide wage protection to employees and their dependent families in the event of their untimely or accidental death or retrenchment.
Who is eligible for EDLI?
EDLI is available for all employee who are registered under the Employee Provident Fund Scheme. However, before claiming the benefits of EDLI the employee should have completed at least six months of service under the scheme.
How are EDLI wages calculated?
EDLI wages are calculated by taking the average of the basic wages and dearness allowance earned by the employee in the 12 months preceding the month in which the death or retrenchment occurred and multiplying this sum by the percentage of wages prescribed under the scheme.
What is the purpose of EDLI wages?
EDLI wages are intended to provide wage protection to employees and their dependent families in the event of their untimely or accidental death or retrenchment. The amount of EDLI wages helps to alleviate the financial burden for the family of the deceased employee or retrenched employee.
Also See: Compensation Analytics
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