NEW DELHI : The Union government is likely to bring about portability of social security numbers in the formal and informal sectors to meet the dynamic future of work.
Employee Provident Fund Organization (EPFO) subscribers have a unique number and the Employees’ State Insurance Corporation (ESIC) also has unique numbers for their subscribers, while a unique numbering system has also been launched for the unorganized sector.
Authorities believe the multiplicity of numbers should be rationalized and an employee’s Aadhaar-linked account number should remain the same throughout the employee’s life cycle in all sectors, both formal and informal for various social security benefits, at least two government officials said. .
“Displacement of universal or unique account number (UAN) will have a negative effect on the social security ecosystem. What is required is a one-time registration, a number and a whole work cycle for an employee. This is now on the table,” said one of the two government officials mentioned above.
Such portability options can provide significant data on employee turnover, the movement of labor from one sector to another within the formal sector and also from unorganized workspace to organized employment, the second official said.
The move can have several consequences. First, once you register with a social security agency, it stays true throughout the work cycle. It also reduces red tape and increases the ease of doing business.
“The job market is changing. People go from formal to informal and DIY work depending on the market situation, income proposition and comfort. A flexible portable social security system will be beneficial here,” the second official said.
“It is possible to have one social security number by enabling portability between organizations. Once this is finalized, the details will be shared,” said Labor and Employment Secretary Apurva Chandra.
EPFO ensured the portability of EPF numbers in 2014-15 and it proved immensely useful as it allowed an employee to keep the PF number with all employers, instead of having a new account every time someone changes jobs .
The Union government planned to enable portability of accounts between EPF and the National Pension System (NPS). However, EPFO and NPS’ differentiated investment pattern, tax system and premium system led to widespread criticism of the move. The NPS-EPF portability was thus abandoned.
Once the Social Security Labor Code is in place, it will be easier to work on the transferability option, argued the first official mentioned above. The idea is to have one number for different Department of Labor schemes and this could be beneficial as they do not conflict with each other and do not create a jurisdictional problem of multiple ministries.
However, some experts argue that the informal nature of the formal labor market is increasingly accepted by the authorities, and that officials from various social security agencies need to figure out how the benefits of the formal and informal sectors will be received without compromising the accrued benefits. before rolling out the initiative. The question that arises is whether an individual who is an EPFO subscriber will continue to receive an EPFO administered pension while also receiving an informal sector pension when becoming a gig worker. An EPFO subscriber is eligible for retirement by contributing continuously for 10 years.
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