What is the effect of EPFO’s new fat rule.
The Indian Staffing Federation (ISF) has recently expressed its concern over a new update of the Employees Provident Fund Organization (EPFO). According to this rule, now face authentication technology – FAT has been made mandatory through Umang app to make universal account number (UAN). Due to this change, staffing companies and millions of contractual employees across the country are facing a big problem.
Fat rules and its effects
EPFO has announced that from 1 August 2025, the construction and activation of UAN will be possible only through face verification with the help of Umang app, UAN is a number that is given to identify an employee’s PF account, especially when the employee works in various companies. But this new process has created serious obstacles in the working system of staffing companies. According to ISF, onboarding of more than 1000 employees has stopped in just two days. It has a direct impact on the parole cycle and time frame.
What challenges are staffing companies facing?
- Effect on joining and exit: Staffing companies appoint temporary employees repeatedly. Under the new FAT rule, it is necessary to get every employee to have face authentication, which is difficult for employees working in different places.
- Technical problems: Not every employee has a smartphone or fast internet. FAT process is delayed due to lack of digital devices and connectivity in remote areas. Also, mistakes in the server down or face reconstruction also obstruct.
- Obstruction of becoming UAN: It is prohibited to make UAN without Aadhaar seeding by employers. This is facing difficulties in making a large number of employees to make UAN, which affects PF contribution and timely pay payment.
- Time-limit pressure: EPFO has set a deadline for fat and base seeding, but it is difficult for such a large number of employees to complete it.
ISF suggestions and solutions
ISF has given some concrete suggestions to EPFO so that this problem can be resolved. ISF said that for the first time employees joining the employers should be given the facility to make UAN without FAT so that they can register PF on time.
The FAT process and digital onboarding should be given at least six months relief, so that both employers and employees can prepare. Special assistance for fat related technical problems and better facilities should be provided on the EPFO portal.
Along with this, ISF suggested that multilingual training and awareness programs should be conducted about the Umang app, EPFO and FAT for contract employees. And some discounts or easy rules should be made for high turnover industries so that they can balance between safety and operation.