Employees face Aadhaar barrier for cos’ PF share - Hindustan Times
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Employees face Aadhaar barrier for cos’ PF share

By, Hindustan Times, New Delhi
Jun 09, 2021 01:28 AM IST

The rule came into effect on June 1 under Section 142 of the Code on Social Security, 2020.

Firms will not be able to transfer their share of provident fund deposits to their employees from June onwards unless employees have their Aadhaar — the 12-digit biometric ID — linked to their provident fund accounts, according to new rules of the Employees’ Provident Fund Organisation (EPFO), the state-run retirement fund manager.

Although the EPFO had been advising subscribers to complete the seeding of Aadhaar with their accounts, non-seeding of accounts did not so far impact provident fund deposits.(File Photo / Representational Image)
Although the EPFO had been advising subscribers to complete the seeding of Aadhaar with their accounts, non-seeding of accounts did not so far impact provident fund deposits.(File Photo / Representational Image)

The rule came into effect on June 1 under Section 142 of the Code on Social Security, 2020. Although the EPFO had been advising subscribers to complete the seeding of Aadhaar with their accounts, non-seeding of accounts did not so far impact provident fund deposits.

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Until now, linking of accounts with Aadhaar was only required during withdrawals from the provident fund by a subscriber and availing insurance benefits from Employees State Insurance Corporation.

“The linking is a simple three-step process that can be done accessing the website https://iwu.epfindia.gov.in/eKYC,” an EPFO official said requesting anonymity.

From June onwards, an employer will not be able to upload the electronic challan-cum-return (ECR) related to an employee’s PF account unless the account is integrated with Aadhaar details, according to a notice of the EPFO.

According to the labour ministry’s payroll data, there are over 13 million EPFO subscribers in the country. Employers in the private sector generally either contribute 12% of the employee’s basic salary or basic salary and dearness allowance to the provident fund.

An official of the labour ministry said that employers are being cautioned about the new changes, including through formal communication.

“Dear Employer, with the coming into force of the Section 142 of the Code on Social Security, 2020, the ECR shall be allowed to be filed only for those members, whose Aadhaar numbers are seeded and verified with the UANs, w.e.f 01.06.2021,” a sample message to employers read.

Many subscribers are facing difficulties linking their Aadhaar to their accounts. “That is most likely if there is a mismatch in spellings or other details like date of birth. For such problems, employees must rectify their Aadhaar details first,” said Rahul Khandekar of Allegis Group, an international talent management firm.

Analysts say non-linking of Aadhaar will also affect a subscriber’s access to accounts. “Since the new rules under the Social Security Code make it mandatory on part of employees to link their Aadhaar with their accounts, emergency withdrawals and credit from banks against PF deposits could also be impacted,” said Pallavi Rajan of the staffing firm Express Employment Professionals.

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  • ABOUT THE AUTHOR
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    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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