ISF raises concerns as EPFO’s new face authentication rule stalls UAN generation, payroll

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The Indian Staffing Federation (ISF) has expressed concerns over a new directive from the Employees' Provident Fund Organisation (EPFO). As per the EPFO's new circular, all allotment and activation of Universal Account Numbers (UANs) will be through the UMANG app via face authentication technology (FAT) from August 1, 2025.

What is UAN?
A UAN is an exclusive EPFO-delegated identifier that connects multiple member IDs that are distributed to an individual in various jobs and employers.

Why the resistance?
The August 5 press release by ISF states that the new FAT rule has already halted onboarding for over 1,000 candidates within two days, affecting payroll cycles as well as compliance timelines of staffing companies.

Why companies are worried:

Delayed salaries: Most contract and temporary employees don't have smartphones or fixed internet, so real-time FAT checks are impossible. Without UAN, salary and PF contributions get delayed — more critical for MSMEs and high-turnover sectors.

Bottleneck for UAN generation: Mass enrollment is hindered with employers unable to generate UANs in the absence of Aadhaar seeding and FAT. It also impacts worker trust as PF access becomes delayed.

Tech limitations: Inefficient camera quality, lighting conditions, poor networks, and biometric mismatches render FAT unreliable, particularly in the hinterlands.

Compliance risks: The aggressive timelines, such as Aadhaar-FAT linking by June 30, 2025, risk penalty if deadlines are not met.

Job effect: New employees, especially first-time earners, stand to have their job offers rescinded if UAN creation is unsuccessful because of FAT barriers.

ISF’s proposed fixes:

Let the employers generate UANs for fresh joiners through the employer portal to guarantee on-time PF registration.

Relax six months of compliance periods to facilitate education of workers and easier joining.

Grant bulk generation of UANs without FAT at the initial stage, verification to be done later.

Enhance technical support and offer multilingual training to the workers.

Provide partial exemptions for high-turnover sectors wherein FAT can be operationally demanding.

ISF confirms that it is in favor of the EPFO's objective for safe and technology-based processes but maintains that phased implementation is necessary to avoid delays in payrolls, compliance, as well as losing jobs in India's massive contract labor force.