Aadhaar validation to expand beyond EPFO
The Union government aims to expand the ambit of Aadhaar validation beyond the Employees’ Provident Fund Organisation (EPFO) through a clause in the new labour code on social security to cover a large part of formal sector workers.
Matching of the Aadhaar details such as name, age and date of birth, of subscribers with the records of employees, will cover the retirement fund body, as well as Employees’ State Insurance Corporation (ESIC). Authorities believe once Aadhaar validation comes into force, payroll fraud such as impersonation will be contained as employers cannot submit statutory EPF and ESI dues without matching employees’ records, at least two government officials said requesting anonymity.
The move could also reduce leakage in welfare schemes, which are part of the two key social security initiatives, such as add-on EPF, maternity, and insurance benefits which are announced from time to time, one of the two officials said.
The government had notified mandatory validation of Aadhaar details with employee details by 1 June, but this has been extended by three months following appeals from employees and employers’ groups. “After this time frame, the implementation will be extended beyond EPFO. While EPFO covers establishments with 20 or more workers, ESIC covers industries having 10 or more workers on their payroll. Extending the Aadhaar validation means a sizable portion of the formal sector will get covered,” said the official.
A section of migrant and gig workers may come under the ESIC social security net, with the cover to be extended beyond industrial and municipal workers, and such a validation will be hugely beneficial, the second official said.
“Section 142 of Social Security Code allows the government to notify such validation even before the social code is implemented in totality. Employer or employee organizations that believe the clause cannot be notified in isolation must read the Act passed by Parliament. What we are trying to do is reduce leakage. An EPF subsidy scheme under Atmanirbhar Bharat Abhiyan Yojana is going on and, if an employer fudges data, how will you stop him or her? It’s possible only via Aadhaar linkage and validation of employees’ official record,” the second official said.
EPFO has around 60 million active subscribers and manages a retirement corpus of nearly ₹14 trillion. ESIC has 35 million insured persons. Overall 133 million people, including family members of ESIC subscribers avail benefits, such as primary to tertiary care healthcare. Besides, the subscribers also get death, disability and unemployment benefits to its subscribers.
An ESIC spokesperson said the corporation has not mandated the Aadhaar linkage and validation as yet, but has issued instructions to field offices to ensure employers are on board without coercive measures. “This linkage once established will reduce impersonation and swindling of ESIC benefits,” the spokesperson said.