Introduction
With the objective of extending the ambit of social security benefits to the maximum number of workforce in India, the Central Government enacted The Code on Social Security 2020. This law aims to bring in the maximum number of people working in the organized and unorganized sectors towards consolidation of the labour laws. In April 2021, the Government of India released a notification following the enactment of the Code on Social Security, 2020 (the “Code”). As per the notification, under section 142 of the Code and by changing provident fund account rules, the government has made it mandatory to link Aadhaar with the Provident Fund Account.
The Employees Provident Fund Organisation (EPFO) has released a notification stating that Employees Provident Fund (EPF) account holders must link their Aadhaar number with Provident Fund Account.
UAN Verification
It has also been made mandatory to link the UAN (Universal Account Number) with Aadhaar. The UAN must be verified with Aadhar. The reason that the authority cited is that employers will be able to file Electronic Challan Cum Return (ECR).
Failure to Comply
If any person fails to link their Aadhaar with their Provident Fund account, any future claims would stand rejected and the employers will not able to contribute to such persons’ EPF accounts.
Secondly, any person who fails to link their Aadhaar with provident fund account, as per the direction of the Employees’ Provident Fund Organisation (EPFO), the person is not allowed to file Electronic Challan Cum Return. So, the facility of Electronic Challan would be made available to only those who linked their PF account with Aadhaar.
Possible Reasons for linking
Withdrawal: The withdrawal process becomes fast and smooth. Approval or attestation from the employer is not required for such withdrawals.
Verification of Account: Genuine accounts can be verified and the instances of bogus or forged accounts can be significantly reduced.
Few Errors: After the linking, the chances of error or duplication of accounts get reduced.
Role of Employers
Given that this linking is a recent legislation, it becomes important for the employers to adopt an active approach towards ensuring its compliance. Communication and awareness from employers side becomes crucial to ensure that there is no failure on the employees part and the concerned stakeholders are apprised about the consequences of failure to link their Aadhaar with EPF Accounts.
References:
Comments