--- title: "Employment Linked Incentive (ELI) Scheme / PM Viksit Bharat Rozgar Yojana: Law, Eligibility and Procedure for Claiming Benefits " date: 2026-08-18 author: "Priyanka Kwatra" url: https://ksandk.com/labour-employment/what-is-pm-vbry-eli-scheme/ --- # Employment Linked Incentive (ELI) Scheme / PM Viksit Bharat Rozgar Yojana: Law, Eligibility and Procedure for Claiming Benefits  Posted On - 18 August, 2026 • By - Priyanka Kwatra ![PM Viksit Bharat Rozgar Yojana benefits for employees and employers under the ELI Scheme](https://ksandk.com/wp-content/uploads/ChatGPT-Image-Aug-18-2026-05_48_59-PM.png) ## **Introduction** The Employment Linked Incentive (“ELI”) Scheme was approved by the Union Cabinet in July 2025 with the objective of promoting formal employment, incentivising first-time entry into the workforce and encouraging employers to create and sustain additional employment. The Scheme came into effect on 1 August 2025 and is now implemented as the Pradhan Mantri Viksit Bharat Rozgar Yojana (“PM-VBRY”) through the Employees’ Provident Fund Organisation (“EPFO”).  The Scheme has an overall outlay of approximately ₹99,446 crore and applies to eligible employment created between 1 August 2025 and 31 July 2027. It operates through two principal components:  1. Part A: Incentive for First-Time Employees; and  2. Part B: Incentive for Employers for Additional Employment.  Importantly, PM-VBRY is administered substantially through EPFO’s electronic records, particularly the monthly Electronic Challan-cum-Return (“ECR”). Accordingly, accurate employee, wage, UAN, Aadhaar and contribution data is central to establishing eligibility and receiving the incentive.  ## **1. Who can claim benefits?** ### *A. First-time employees: Part A* Part A is intended for a “First Timer” entering [formal employment](https://ksandk.com/labour-employment/gig-workers-india-labour-code/) and becoming an EPFO member for the first time. An eligible First Timer can receive an incentive equivalent to one month’s EPF wage, subject to a maximum of ₹15,000, in two instalments:   - First instalment: up to ₹7,500 after completion of six months of continuous employment; and  - Second instalment: after completion of 12 months of employment and successful completion of the prescribed Financial Literacy Programme.  The employee’s [gross wages](https://ksandk.com/labour-employment/50-wage-rule-labour-codes-salary-pf-gratuity/) at the time of joining must not exceed ₹1 lakh per month. The employee does not have to make a separate registration application for Part A. Eligibility is determined on the basis of the ECR filed by the establishment with EPFO.  ### *B. Employers: Part B* Part B is directed at establishments creating net additional employment over their baseline employment. The principal conditions include:  -  the establishment must be covered by EPFO;  - additional employees must be sustained for at least six months;  - establishments with a baseline of fewer than 50 employees generally need to add at least two employees;  - establishments with a baseline of 50 or more employees generally need to add at least five employees; and  - the employee must generally have gross wages of not more than ₹1 lakh per month to generate the employer incentive.  The benefit is available for two years for eligible establishments in general and for four years for establishments in the manufacturing sector.  ## **2. What is the employer’s incentive?** The employer incentive is linked to the EPF wage of the additional employee:  - EPF wage of additional employee| Employer incentive  - Up to ₹10,000| Up to ₹1,000 per month*  - More than ₹10,000 and up to ₹20,000| ₹2,000 per month  - More than ₹20,000 and up to ₹1 lakh| ₹3,000 per month  **For EPF wages up to ₹10,000, the incentive is calculated proportionately. Thus, the maximum employer incentive is ₹3,000 per additional eligible employee per month. * ## **3. Is there a separate “claim application”?** A significant feature of PM-VBRY is that it is not structured like a conventional subsidy scheme where an employer submits a fresh claim with supporting documents for every employee. Instead, the Scheme is substantially data-driven and ECR-driven. EPFO’s system determines key parameters including:  - the establishment’s baseline;  - net additional employment;  - satisfaction of the applicable threshold;  - employee eligibility;  - qualifying wage;  - duration of employment; and  - incentive amount.  The ECR filed by the establishment, together with the corresponding EPF contributions, is the principal record used for determining eligibility and calculating the incentive. Consequently, filing correct and timely ECRs is effectively the foundation of the claim.  ## **4. Procedure for an employer to obtain the benefit** ### ***Step 1: Ensure EPFO registration*** An establishment must have an EPFO code. A new establishment can obtain [EPFO registration](https://ksandk.com/labour-employment/gig-workers-epf-code-social-security-2026/) through the Shram Suvidha Portal or the MCA incorporation/registration process. Existing EPFO-registered establishments do not need to obtain a fresh EPFO registration merely because of PM-VBRY.  ### ***Step 2: Register the establishment for PM-VBRY*** The PM-VBRY portal provides an employer registration facility. Existing establishments are required to furnish, among other details like PAN, GSTN and PAN-linked bank account details. The official PM-VBRY portal describes the employer process as obtaining an EPFO code, registering for incentives through the employer portal, hiring eligible workers, filing monthly ECRs and sustaining additional employment.  ### ***Step 3: Identify the baseline*** The baseline is critical because Part B rewards additional employment, rather than simply the employment of new individuals. For an establishment already registered with [EPFO](https://updates.complianceage.com/pmvbry-scheme-employer-guide/)before 1 August 2024 and regularly filing ECRs, the baseline is generally calculated using the average employee strength reflected in ECRs for the 12 months from 1 August 2024 to 31 July 2025.  Different rules apply to establishments registered between 1 August 2024 and 31 July 2025 and to establishments newly registered during the Scheme period. For a new establishment registered during the Scheme period, the baseline is generally fixed at 20 employees. Employers should therefore independently verify the baseline reflected in the EPFO system before assessing the likely incentive.  ### ***Step 4: Recruit qualifying employees*** The employer must create employment above the applicable baseline and threshold. The employee may be a First Timer or, where permitted under the Scheme, a qualifying re-joiner. Employees earning more than ₹1 lakh can be relevant for calculating additional employment, but do not themselves generate the PM-VBRY incentive.  ### ***Step 5: Ensure UAN and Aadhaar authentication*** For Part A, Aadhaar authentication is an important eligibility requirement. Employees can generate and activate their UAN using Aadhaar-based Face Authentication (“FAT”) through the UMANG application and provide the UAN to their employer. EPFO has moved away from direct UAN allotment through the member portal and now facilitates UAN generation/activation through UMANG’s Face Authentication process. This is particularly important for employers onboarding First Timers: an incorrect or incomplete UAN/Aadhaar linkage can interfere with the employee’s eligibility and payment.  ### ***Step 6: File accurate monthly ECRs*** The employer must file the monthly ECR accurately and deposit the applicable [EPF contributions](https://ksandk.com/labour-employment/india-uk-social-security-60-month-rule/). This is one of the most important compliance obligations under PM-VBRY. EPFO has specifically directed establishments to furnish correct gross wages in the ECR for purposes of determining eligibility under the ELI Scheme. The requirement applies from the wage month of August 2025 onwards. Employers should therefore ensure consistency between:  - appointment records;  - payroll;  - wage registers;  - EPF records;  - UAN details;  - ECR;  - bank records; and  - other statutory employment records.  ### ***Step 7: Sustain employment for the prescribed period*** For Part B, the additional employment must generally be sustained for at least six months and the establishment must continue to satisfy the applicable baseline and threshold requirements. If the establishment temporarily falls below the baseline/threshold, the incentive may stop for the relevant period and resume when eligibility is restored. The loss of eligibility does not extend the overall Scheme period. ### ***Step 8: EPFO system calculates the incentive*** Once the required ECRs and contribution data are available, EPFO’s IT system determines the applicable eligibility and incentive. The official FAQ states that the system is designed to determine the baseline, employee eligibility, employer eligibility for each month, net additionality, threshold compliance and incentive amount.  ### ***Step 9: Payment through DBT*** The payment mechanism differs between the two parts: Part A: Payment to eligible First Timers is made through DBT using the Aadhaar Bridge Payment System into the employee’s Aadhaar-seeded bank account. Part B: The employer incentive is paid directly into the employer’s PAN-linked bank account. The official FAQ presently states that incentives are to be paid within 45 days after the eligibility conditions are fulfilled and the establishment has filed the relevant paid ECR, subject to the Scheme’s prescribed periodicity.  ## **5. What constitutes a “completed wage month”?** This issue can be important in determining the six- and twelve-month eligibility periods. A “Completed Wage Month” means a full calendar month for which the employer has filed the ECR in respect of the employee. Where an employee joins on or before the fifth day of a month, that month can be treated as the first completed wage month.  Where the employee joins after the fifth day, the following month is treated as the first completed wage month for Scheme purposes. Employers should therefore carefully record joining dates rather than assuming that six calendar months from the appointment date will automatically correspond to six completed wage months.  ## **6. What happens if the employee leaves?** Continuity of employment is material. Under Part A, if a First Timer leaves before completing six months, the first instalment is not payable; or if the employee leaves after six months but before completing 12 months, the second instalment is not payable. The Scheme therefore links the incentive to sustained employment rather than merely the initial creation of an EPFO account.  ## **7. What if the employer’s bank account changes?** The employer must update its bank account and other relevant details in the EPFO/PM-VBRY system. Since employer incentives are paid to the PAN-linked bank account, failure to update the account may result in delayed or unsuccessful payment. The official FAQ states that once the updated details are successfully verified, future payments can be redirected to the updated account.  ## **8. Legal and compliance risks for employers** Although PM-VBRY is an incentive scheme, employers should not treat the exercise merely as an administrative subsidy claim. The principal legal risks arise from inaccurate statutory records or attempts to artificially satisfy the additional-employment criteria.  ***Particular attention should be given to:***  (a) Artificial inflation of employee strength: Employers should not create nominal or non-genuine employment merely to cross the threshold. Employment must be genuine and supported by appropriate payroll, attendance, wage and statutory records.  (b) Incorrect wage reporting: Since gross wage and EPF wage affect eligibility and incentive calculation, inaccurate ECR reporting can result in incorrect incentive claims and potential compliance consequences. EPFO has expressly emphasised accurate reporting of gross wages for ELI purposes.  (c) Incorrect UAN/Aadhaar details: For First Timers, Aadhaar-authenticated UAN data is central to eligibility and DBT payment.  (d) Multiple establishments and PAN considerations: The Scheme FAQ states that establishments having the same PAN are treated as a single entity for Scheme purposes. Employers with multiple establishments should therefore examine the structure carefully before calculating additional employment separately for different locations.  (e) Outsourced manpower: The establishment that files the ECR and makes the relevant contribution is the entity recognised for purposes of the incentive. Accordingly, principal employers using [manpower supplied through contractors](https://ksandk.com/labour-employment/employees-compensation-act-employer-employee-relationship/) should carefully examine whether the employment and ECR structure satisfies PM-VBRY requirements.  ## **9. Exempted establishments** Establishments exempted under Section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 are also capable of participating, subject to the Scheme conditions. Such establishments have additional procedural requirements, including filing prescribed returns/ECR information and ensuring Aadhaar-authenticated UANs for employees. The Scheme provides specific arrangements for establishing the baseline and reporting employee information for exempted establishments. **10. What if EPFO does not release the incentive?**   Non-receipt of an incentive does not necessarily mean that the employer or employee is permanently ineligible. The first step should be a reconciliation of:  1. UAN and Aadhaar authentication;  2. date of joining;  3. completed wage months;  4. gross wages;  5. EPF wages;  6. ECR filing status;  7. actual EPF contribution;  8. baseline employee strength;  9. net additional employment;  10. applicable threshold;  11. employer PAN and bank-account linkage; and  12. any discrepancy or rejection shown on the PM-VBRY/EPFO system.  If the issue is not resolved administratively, EPFO provides an online grievance-redressal mechanism for issues relating to eligibility, applicability and non-receipt of benefits. From a legal perspective, an employer should preserve the complete documentary trail before approaching EPFO, including appointment letters, payroll records, ECRs, challans, bank statements, UAN records and correspondence with EPFO. This becomes particularly important where the dispute concerns the baseline or the treatment of particular employees.  **11. Practical compliance checklist for employers**   Employers seeking to maximise PM-VBRY benefits should consider the following controls:  - EPFO registration: Confirm that the establishment’s EPFO registration details are accurate.  - PAN/GSTN: Ensure PAN and GSTN details are correctly recorded.  - Bank account: Verify that the employer’s bank account is correctly linked to PAN.  - Baseline: Reconcile the EPFO-generated baseline with historical ECRs.  - New hires: Identify First Timers and qualifying additional employees at onboarding.  - UAN: Ensure UAN generation/activation and Aadhaar authentication are completed.  - Payroll: Ensure gross wage and EPF wage are correctly determined.  - ECR: File accurate ECRs and deposit contributions within the prescribed timelines.  - Six-month test: Track each qualifying employee’s completed wage months.  - Threshold: Monitor employee strength against the applicable baseline and threshold every month.  - Exits: Track resignations, terminations and transfers because they may affect eligibility.  - Manufacturing status: Where four years of benefits are contemplated, verify whether theestablishment satisfies the applicable definition of manufacturing.  - Documentation: Maintain a separate PM-VBRY compliance file and reconciliation statement.  - Claims monitoring: Periodically reconcile amounts expected under the Scheme against actual DBT credits.  - Grievances: Escalate discrepancies through the prescribed EPFO grievance mechanism with documentary evidence.  **Conclusion**   The PM Viksit Bharat Rozgar Yojana represents a significant shift towards data-based administration of employment incentives. Unlike traditional incentive schemes, eligibility and payment under PM-VBRY depend heavily on the accuracy of EPFO’s underlying employment and contribution data.  For employees, the principal issue is ensuring that the UAN, Aadhaar authentication, employment continuity and ECR records correctly establish eligibility. For employers, the exercise is more substantive. The employer must establish additional employment over the prescribed baseline, satisfy the applicable threshold, sustain the additional workforce, accurately report wages and contributions through ECRs and maintain appropriate statutory records.  Accordingly, the “claim” under PM-VBRY is best understood not as a standalone application but as a continuing statutory-compliance and data-reconciliation process culminating in an EPFO-generated entitlement and DBT payment. Employers should therefore undertake a periodic PM-VBRY audit rather than wait until the end of the six-month eligibility period to discover discrepancies in their ECR, UAN or baseline data.  ## Frequently Asked Questions ### 1. Who is eligible for PM-VBRY benefits? Two categories are eligible. First time employees joining EPFO for the first time can claim Part A benefits, while employers creating net additional employment over their baseline can claim Part B incentives, subject to the wage cap of ₹1 lakh per month. ### 2. How much incentive can an employer claim under PM-VBRY? The employer incentive depends on the EPF wage of the additional employee, ranging from up to ₹1,000 per month for wages up to ₹10,000, to a maximum of ₹3,000 per month for wages between ₹20,000 and ₹1 lakh. ### 3. Do employers need to file a separate claim application for PM-VBRY? No. PM-VBRY is not a conventional subsidy scheme requiring fresh claims and documents for each employee. It is data driven and ECR driven, meaning EPFO determines eligibility and calculates incentives based on the ECRs filed by the establishment. ### 4. What happens if an employee leaves before completing the required period? Continuity matters under Part A. If a First Timer exits before completing six months, the first instalment is not payable. If the employee leaves after six months but before 12 months, the second instalment is forfeited. ### 5. What should an employer do if the PM-VBRY incentive is not received? Employers should first reconcile UAN and Aadhaar authentication, ECR filing status, baseline employee strength, and PAN linked bank details. If the issue persists, it can be escalated through EPFO’s online grievance redressal mechanism with supporting documentation. *Last Updated on 18 August, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)