The Government of India has launched the Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY), also known as the Employment Linked Incentive (ELI) Scheme, which took effect on August 1, 2025.

Background

The PM-VBRY was conceived to financially incentivizing both employers and employees to boost social security coverage, provides workers with stable incomes and benefits, and enhances productivity through skills development.

Scheme Structure: Two Pillars to Support Workers and Employers

Part A: Incentives for First-Time Employees

The “first timer” component targets individuals who have never contributed to the Employees’ Provident Fund Organisation (EPFO) before and provides:

· A one-time incentive of up to ₹15,000.

· This incentive is disbursed in two installments:

o The first after 6 months of continuous employment.

o The second after 12 months, contingent upon completion of a Financial Literacy Programme delivered by the EPFO.

This financial support with mandatory financial literacy course aims to build money management skills and promote long-term financial security.

Part B: Incentives for Employers

Employers receive monthly incentives tied to the gross EPF wages of newly added employees.

The incentive scale is as follows:

Tenure: Incentives last up to 2 years for most sectors, extended to 4 years for manufacturing units.

Thresholds: Employers must meet workforce expansion thresholds:

· Establishments with fewer than 50 employees must add at least 2 new workers.

· Establishments with 50 or more employees must add at least 5 new workers.

Eligibility Requirements

For Employees

· New employees must be first-time EPFO contributors with no prior membership record.

· Activate UAN via Face Authentication on the UMANG app

· Monthly gross wages must not exceed ₹1,00,000.

· Employment must be continuous for at least 6 months with the same employer.

· The employee must complete the mandated financial literacy program for the second installment of the incentive.

· Employee must ensure Aadhaar-linked bank accounts are active for receiving benefits via Direct Benefit Transfer (DBT).

For Employers

· Must show net additional employment above baseline (average workforce size from Aug 2024 to July 2025).

· Factor First Completed Wage Month:

o Where an employee’s Date of Joining is on or before the 5th day of a given calendar month, that same month shall be treated as the first Completed Wage Month.

o Where the Date of Joining is after the 5th day of the month, the subsequent calendar month shall be treated as the first Completed Wage Month.

Payment Mechanism

· Employees receive incentive installments directly into their Aadhaar-linked bank accounts.

· Employers receive monthly incentives credited to their PAN/TAN-linked bank accounts via EPFO payments.

· The system incorporates automated validation checks, cross-verifies employment data, and monitors the completion of financial literacy certifications.

How Employer can Apply for the PM-VBRY Scheme

1. Registration:

o Between August 1, 2025, to July 31, 2027, every employer must register their establishment on the official EPFO portal as per instructions related to PM-VBRY.

o Ensure that your Employees’ Provident Fund Organization (EPFO) account details (PAN/TAN, bank accounts) are updated and linked appropriately.

2. Baseline Workforce Determination:

o Establish the baseline average number of employees from the 12-month period of August 1, 2024, to July 31, 2025, using your monthly Electronic Challan cum Return (ECR) filings.

o If a new establishment, the baseline is considered as 20 employees.

3. Add New Employees:

o Hire new employees who qualify (first-time EPFO members with wages up to ₹1 lakh).

o Ensure their EPF members’ contribution is filed monthly without delay through ECR.

4. Filing for Incentives:

o Submit online applications through the PM-VBRY dedicated portal integrated with EPFO.

o Provide accurate employee and wage details each month.

o Track net additional employment beyond the baseline.

5. Compliance:

o Timely filing of ECRs and adherence to EPFO regulations is essential to receive incentives.

o Employers should maintain thorough records and respond promptly to any audits or verifications.

o Align hiring plans with the scheme’s eligibility to maximize incentives.

o Focus on hiring first-time formal workers to qualify for both employee and employer benefits.

Conclusion

The Pradhan Mantri Viksit Bharat Rozgar Yojana (PM-VBRY) is a dual-incentive model balancing employer motivation with employee support. EPFO and the Ministry of Labour monitor and evaluate the scheme, with mechanisms in place to identify and penalize fraudulent claims. Exempted establishments under EPFO rules are also eligible provided they comply with filing requirements. Below is a table consolidating the main elements covering eligibility, incentives, payment, eligibility, duration, common conditions, and cessation rules for both employees and employers:

Frequently Asked Questions (FAQs)

Q1: Can employers claim incentives immediately?
A1: Incentives for employers are based on monthly filings and new employee additions verified post 6 months of continuous employment.

Q2: What if an employer delays or misses ECR filings?
A2: Delays or missed filings can jeopardize incentive eligibility. Compliance is mandatory to receive benefits.

Q3: Who is a first-time employee?
A3: Joins the establishment/exempted establishment on any date between 01.08.2025 and 31.07.2027.

Q4: How is Net Additional Employment calculated?
A4: Net Additional Employment is the number of new employees added beyond the baseline workforce that qualifies for incentives each month. It measures how much the workforce has grown compared to a baseline period.

The formula for Net Additional Employment is lower of the two below:

Old Employees with ECR filings + Number of Eligible Employees) - Baseline

OR

Number of Eligible Employees

Where:

Old Employees with ECR filings: The number of employees from your existing workforce (baseline) for whom EPFO contributions (ECR) are filed in that month.
Number of Eligible Employees: New employees added in the month who meet eligibility criteria (e.g., first-time EPFO members with wages up to ₹1 lakh).
Baseline: The average number of employees employed during the baseline period (August 1, 2024, to July 31, 2025).

Interpretation:

You add the old employees (already in baseline) for whom you filed returns in the current month to the new eligible employees.
Subtract the baseline number of employees from this total to get additional workforce above your baseline.
The result cannot exceed the number of new eligible employees added in that month, so you take the minimum of the difference and the number of new eligible employees.

Q5: What is Pro-Rata and how is it calculated?
A5: “Pro Rata” means that the incentive amount paid to an employer is adjusted based on the actual number of new employees they have added compared to the total number of eligible employees in each month.

Example:

if you have several new employees who are eligible for different incentive amounts, the total incentives for all these employees are added up. But sometimes, not all new employees beyond the baseline count will qualify equally for the incentive. So, the scheme calculates how many new employees you really have added above your baseline (your regular workforce size) and pays incentives only for that portion.

The formula looks like this:

Calculate the total incentives for all eligible employees in that month.
Multiply that total by the number of net additional employees (new employees above your baseline).
Divide by the total number of eligible employees for that month.
If the total incentive for eligible employees is ₹10,000, but the net additional employees above the baseline is only 3 out of 4 eligible employees, then the pro rata incentive paid would be:

10,000×34=₹7,50010,000×43=₹7,500

Q6: Will Employers Get Benefits for Re-joinees?
A6: Employers are encouraged to rehire trained and experienced workers who previously contributed to social security and employers can receive incentives for re-joinees subject to below conditions:

The re-joinee must have prior contributory membership in EPFO or an Exempted Trust before re-joining.
The incentive for the employer is applicable only if the re-joinee has a Universal Account Number (UAN) that is biometrically Aadhaar authenticated.
The re-joinee must join the establishment during the PM-VBRY registration period (August 1, 2025, to July 31, 2027).
The employer will receive incentives similarly as for first-time eligible employees, based on wage slabs and sustained employment for at least 6 months.

Q7: What does “Rolling Average” mean?
A7: The rolling average is used to check if an establishment is maintaining or increasing its workforce steadily to qualify for incentives.

How it works:

For the first 6 months, you calculate the simple average of employees each month by adding the total employees reported in those 6 months and dividing by 6.
For month 7, you calculate the average of employees from month 1 up to month 7 (adding employees of all 7 months, then dividing by 7).
This keeps moving forward: for month 8, average from month 1 to 8; for month 9, month 1 to 9; and so on.
After you complete 12 months, the average takes only the last 12 months into account each time (so for month 13, your average months 2 through 13, for month 14, you average months 3 through 14, etc).

Q8: When Will the Payment of Incentives Cease?
A8: Employee: If the employee (first timer) voluntarily leaves the employment or exits the establishment for any other reason, the incentives related to that employee will stop. Incentives will also cease in the event of the employee’s death or similar eventualities.

Employer: If the establishment closes, winds up operations, or ceases to operate. Payment of incentives will also be stopped If there is any misrepresentation, fraud, or misuse of the scheme benefits by the employee or employer.