NEW DELHI : The Government of the Union is likely to carry out a social security number portability across the formal and informal sector to cope with the dynamic future of work.
Employee Provident Fund Organization (EPFO) subscribers have a unique number, and Employees’ State Insurance Corporation (ESIC) also has unique numbers for their subscribers, while a unique numbering system for the unorganized sector has also been launched.
Authorities believe the diversity of numbers needs to be rationalized and the Aadhaar-linked account number for an employee should remain the same across the employee’s life cycle across sectors, both formal and informal for different social security benefits, at least two officials said. .
“The need for universal or unique account numbers (UANs) will have a negative impact on the social security ecosystem. What is required is one time registration, one number and an entire work cycle for an employee. This on the table now,” said one of the two above-mentioned government officials.
Such portability opportunities can provide significant data on staff decline, movement of labor from one sector to another in the formal sector and also from the unorganized work area to organized employment, the other official said.
The move can have several consequences. First, once you register with a social security body, it will remain true throughout the work cycle. It will also reduce administrative hassle and make it easier to do business.
“The labor market is changing. People move from formal to informal and concert work, depending on the market situation, income proposals and comfort. A flexible portable social security system here would be beneficial, “said the other official.
“It is possible to have one social security number by allowing portability across organizations. Once and if this is completed, the details will be shared, “said Labor and Employment Secretary Apurva Chandra.
EPFO implemented EPF number portability in 2014-15, and it proved hugely advantageous as it allowed an employee to keep the PF number across employers, instead of having a new account every time they changed jobs.
The government of the Union planned to allow portability of accounts between the EPF and the National Pension System (NPS). However, the differential investment pattern, tax system and contribution system of the EPFO and NPS led to widespread criticism of the move. Thus, the NPS-EPF portability was abandoned.
Once the social security labor legislation is implemented, it will be easier to work with the possibility of transfer, the first official mentioned above claimed. The idea is to have one number across multiple schemes in the Ministry of Labor, and this can be advantageous as they do not collide with each other and do not give rise to a jurisdictional problem in several ministries.
However, some experts argue that it shows a growing acceptance on the part of the authorities of informality in the formal labor market, and officials from various social security bodies need to figure out how the benefits of the formal and informal sector will be met without compromise on the accumulated benefits before rolling out the initiative. The question that arises is whether a person who is an EPFO subscriber continues to receive an EPFO administered pension and at the same time receive an informal sector pension by becoming a concert employee. An EPFO subscriber will be entitled to a pension by continuous payment for 10 years.
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