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Two social security arms of the government have different rules for Aadhaar requirements at the time of pandemic. While the Employees’ State Insurance Corporation (ESIC) has decided not to deny any benefit to insured persons for want of Aadhaar, the Employees’ Provident Fund Organisation (EPFO) has made Aadhaar-linking mandatory, citing a law which is yet-to-be fully operational.
The government has received representations from employees and employers that they are unable to conduct online transactions at EPFO because the retirement fund has made Aadhaar mandatory from June 1 on the pretext of the Code on Social Security (CoSS), which is not yet fully operational, four people with direct knowledge of the matter said.
Employers are unable to deposit provident fund contributions of lakhs of employees because EPFO has made Aadhaar mandatory, they said. EPFO it is one of the world’s largest social security organisations, which maintains over 220 million accounts with a corpus of ₹12 lakh crore.
“The government has made it amply clear that social security organisations would not make Aadhaar mandatory until the Code is made fully operational. At present, only Section 142 of CoSS is notified, which aims to create the National Data Base for unorganised workers (NDUW) and not to create any inconvenience to members of ESIC or EPFO,” one person, a government official, said. Both ESIC and EPFO cater to the organised sector.
A second person aware of developments at ESIC said, “The Labour Ministry specifically clarified last month that the government has only notified the Section 142. As other provisions of the Code are pending, Aadhaar should not be made mandatory at this stage.”
EPFO, however, issued a circular on June 1 to its field formations making seeding of Aadhaar number mandatory for online transactions as per the section 142 of the Code, which the government had notified on May 5, 2021. HT has reviewed the circular.
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“In compliance of the above provision [the section 142] in EPFO, the Competent Authority has approved that the ECR [electronic challan-cum-return] 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,” the circular said. Through ECR, an employer deposits provident fund (PF) contributions of its employees in their respective social security accounts, which is called universal account numbers (UAN).
Quoting labour minister Santosh Gangwar, an government statement on May 5 had clarified that the section 142 has been notified “only for collection of data of workers including migrant workers. No benefit will be denied to workers for want of Aaadhar”.
The labour ministry, EPFO, ESIC and Unique Identification Authority of India (UIDAI) did not respond to email queries on this matter. UIDAI is a statutory authority that issues 12-digit unique identification numbers called ‘Aadhaar’ to Indian residents.
The ministry on May 12 also advises ESIC that it could go ahead with collection of Aadhaar data from insured person, but it shall not deny any benefit to any of them, the second person quoted above said.
“Since other provisions of the CoSS 2020, including provisions related to the ESI scheme/benefits etc., are yet to be implemented, the requirement of Aadhar for availing benefits etc under the existing ESI Act, 1948 may not be mandatory,” the law ministry advised ESIC on May 12. HT has reviewed a copy of the communication.
ESIC is governed by the Employees’ State Insurance Act, 1948 (ESI Act) that covers factories and establishments with 10 or more employees and provides for comprehensive medical care to the employees and their families as well as cash benefits during sickness and maternity, and monthly payments in case of death or disablement.
EPFO is, however, governed by the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952, which is applied to factories and establishments employing 20 or more employees and ensures terminal benefits to provident fund, superannuation pension, and family pension in case of death during service.