The Universal Account Number (UAN) of employees’ provident fund organisation (EPFO) and the newly created informal sector workers’ database is likely to be made interoperable to create a seamless backbone for universal social security cover in the larger labour market.
“One registration and one UAN should be good enough for all workers in the employment ecosystem,” said a top government official requesting anonymity.
Also read: EPFO adds 14.12 lakh subscribers in February, up 14% on year
This will be helpful for universal social security framework, and seamless transition of registration and KYC of workers from informal to formal sector.
The union labour ministry that manages both the wings – EPFO for formal sector and informal sector database for others, is working to integrate the backend and allow smooth transition and movement of formal sector and informal sector.
“In the EPFO ecosystem, we have already allotted nearly 10 crore (100 million) UANs. Most of them are active. In the informal sector database, some 28 crore or 280 million unique numbers have been generated and allotted. The aim is to allow them as interoperable numbers,” said the official cited above.
Another official with knowledge of the development said, an informal sector worker can become a formal sector worker next month and instead of duplicating registration process and authentication process, such a measure will be beneficial.
“If you are registered and have done an Aadhaar authentication, then informal sector database details can easily go to EPFO. KYC done, and UAN is there and the contribution can flow in with support from the employer,” explained the official.
An API integration will do the work, the first official asserted. Application program interface (API) integration allows seamless connectivity for multiple departments, and organizations to automate business processes, and better sharing and embedding of data between multiple applications and systems.
The official cited above said once the new labour codes are in place and when the government either at the centre or at the state level wishes to start new social security schemes or offer any DBT can use this for smooth transactions.
“The Indian labour market is considered to be around 470 to 500 million and already 380 million have a UAN via EPFO and informal sector database. We are working on the details,” said the first official cited above.
The move, once implemented, may also allow seamless transitioning of gig and platform workers to the formal social security system going forward.
India has registered at least 7,17,686 gig workers, and almost 58 percent of them have come from West Bengal, Uttar Pradesh and Bihar alone, according to official data.
As per the new social security code, the Union government, states, and the platform economy companies will jointly set up a fund and create a social security mechanism for gig and platform workers.
Labour code status:
India has consolidated 29 central labour laws into four codes on wages, social security, occupational health, and industrial relations. While the parliament approved the Code on Wages in August 2019, the rest three were passed in September 2020. But none of them has been rolled out as yet.
The labour codes are expected to introduce far-reaching changes with implications for employers and workers. They will offer greater flexibility in rolling out short-term work contracts, make hiring and firing flexible, and make industrial strikes harder.
Moving a step closer to rolling out the four crucial labour codes, the union government has brought on board all states and union territories except four and all them have pre-published draft rules, Moneycontrol reported on April 27.
A few of the north-eastern states are yet to come on board, and West Bengal too is yet to pre-publish rules of some of the codes that will have a major impact in a gamut of segments – from wage definition to take-home pay, from national minimum wage floor to fixed-term employment, ease in hiring and firing, and social security for gig workers.