UAN activation and seeding bank account with Adhaar for availing benefits under the ELI scheme

The Ministry of Labour and Employment, in a press release dated 21^st November 2024, instructed the Employees’ Provident Fund Organisation (EPFO) to facilitate the activation of Universal Account Numbers (UAN) for employees (EPF members) using Aadhaar-based OTP. This initiative aims at maximising the participation of both employers and employees in various Employment Linked Incentive (ELI) schemes introduced in the Union Budget for 2024-25. Accordingly, the Employees’ Provident Fund Organisation, vide circular no. ELI/UANActivation/2024, dated 22^nd November 2024, has requested all employers to ensure UAN activation and Adhaar seeding of bank accounts by 30^th November 2024, in respect of all their employees who have joined in the current financial year, starting with the latest joinees.

The following employment and labour-related schemes were introduced in the 2024-25 Union Budget. An alert regarding these initiatives was circulated by Ascent HR on 30^th July 2024.

Scheme A

Scheme A will be applicable to all persons who are newly entering the workforce in all formal sectors and are registered with the EPFO. The scheme will be applicable to all sectors and to all persons newly entering the workforce with wages less than INR 1 lakh per month. It will be in the form of a direct transfer of one month’s salary in 3 instalments to such employees up to INR 15,000. However, the employee must undergo a compulsory online financial literacy course before claiming the second instalment. The subsidy will have to be refunded by the employer if the employment of any first-timer ends within 12 months of recruitment. The scheme will be for 2 years.

Scheme B

Scheme B will incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees. An incentive will be provided at a specified scale directly both to the employee and the employer, with respect to their EPFO contribution in the first 4 years of employment. This scheme is only applicable to establishments engaged in the manufacturing sector.

All employers, both corporate and non-corporate entities, with a three-year track record of EPFO contributions will be eligible.

Employers must hire at least the following number of previously non-EPFO enrolled workers:

• 50, OR
• 25% of the baseline (previous year’s number of EPFO employees) (whichever is lower)

Incentives will be paid for 4 years, partly to the employee and partly to the employer, as follows:

• Employers must maintain a threshold level of enhanced employment throughout, failing which, the subsidy benefit will stop.
• Employees must be directly working in the entity paying salary/wage.
• Employees with a wage/salary of up to INR 1 lakh per month will be eligible, subject to EPFO’s contribution.
• For those with wages/salary greater than INR 25,000 per month, incentives will be calculated at INR 25,000/month.
• Subsidy to be refunded by the employer, if the employment of a first-timer ends within 12 months of recruitment.
• The scheme will be for 2 years.

Scheme C

Scheme C will apply to employers who increase employment above the baseline (previous year’s number of EPFO employees) by at least 2 employees (for those with less than 50 employees), or 5 employees (for those with 50 or more employees) and sustain the higher level, and to employees whose salary does not exceed INR 1,00,000 per month. For the purpose of this scheme, new employees need not be new entrants to the EPFO.

Under this scheme, the Government will reimburse EPFO employer contributions up to INR 3,000 per month to the employer for additional employees hired in the previous year, for two years.

However, if the employer creates more than 1,000 jobs, reimbursement will be made quarterly for the previous quarter, and the subsidy will continue for the third and fourth years on the same scale as the employer benefit in Scheme B.

This scheme will be for 2 years.

Apart from the above, there are schemes for skilling programmes and the upgradation of Industrial Training Institutes.

In the first stage, employers are required to complete the process of UAN activation through Aadhaar-based OTP for all their employees joining in the current financial year by 30^th November 2024, starting with the latest joinees. They must then complete the process for all employees working with them.

Employers should ensure that their employees activate the UAN by following the following steps:

1. Go to the EPFO Member Portal.
2. Click on the “Activate UAN” link under “Important Links”.
3. Enter UAN, Aadhaar number, name, DOB, and Aadhaar-linked mobile number.
4. Employees should ensure their mobile number is Aadhaar-linked to access the full range of EPFO’s digital services.
5. Agree to Aadhaar OTP verification.
6. Click “Get Authorization PIN” to receive an OTP on your Aadhaar-linked mobile number.
7. Enter the OTP to complete the activation.
8. A password will be sent to your registered mobile number upon successful activation.

Concerned EPFO offices may be contacted for necessary guidance in this matter, if required.