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From August 1, 2025, the Employees’ Provident Fund Organisation (EPFO) has made it mandatory to use Face Authentication Technology (FAT) via the UMANG app for Universal Account Number (UAN) allocation and activation. While the move aims to enhance digital security and streamline PF account creation, it has triggered significant disruptions in onboarding, payroll, and Provident Fund (PF) contributions—particularly for contract and temporary workers.

The Indian Staffing Federation (ISF), representing over 1.8 million contract workers in India, has voiced serious concerns about the rule’s immediate impact. According to ISF, more than 1,000 employees were unable to complete onboarding in just the first two days after the regulation took effect, halting payroll processing and PF deposits.

What is UAN and Why It Matters

The UAN is a unique number assigned to each employee by EPFO to consolidate multiple PF accounts accumulated across different jobs. This makes PF management simpler for employees who change jobs frequently. However, under the new FAT mandate, companies can no longer create a UAN without completing face authentication through the UMANG mobile application.

Why the New Rule is Causing Trouble

ISF points out several operational and technical challenges:

1. Delays in Employee Onboarding
   In staffing companies, where large numbers of contract workers join or leave daily, FAT has slowed down the process considerably. Many workers lack smartphones or internet access, making authentication difficult and time-consuming.

2. Impact on Payroll and PF Contributions
   With FAT now mandatory, delays in UAN generation are holding up PF contributions and salary processing. Workers are facing late payments, and companies risk non-compliance with statutory timelines.

3. Restrictions on Bulk UAN Creation
   Previously, companies could generate UANs in bulk, but now, without Aadhaar linking and FAT, this is no longer possible. This has led to PF credit delays and has eroded workers’ trust in the system.

4. Technical Failures and Low Digital Literacy
   In rural areas and smaller towns, many contract workers are unfamiliar with digital platforms. Issues such as failed face recognition, poor camera quality, or unstable internet connections are becoming common obstacles.

5. Compliance Pressure
   EPFO had set June 30, 2025, as the deadline for Aadhaar linking and FAT implementation. Managing thousands of employees under such tight timelines has become a major challenge for companies. Missing deadlines can result in penalties and further PF delays.

6. Impact on Employment Opportunities
   If a new hire fails FAT due to technical issues, a PF account cannot be created. In some cases, job offers may be withdrawn—particularly affecting first-time job seekers.

ISF’s Recommendations to EPFO

To ease the disruption, ISF has urged EPFO to:

• Make face authentication optional for now and allow companies to continue using earlier methods for UAN creation.

• Launch special campaigns to update Aadhaar details and promote digital awareness among less tech-savvy workers.

• Provide additional support in rural areas where smartphone penetration and internet connectivity remain low.

The Bigger Picture

While FAT aims to strengthen identity verification and reduce fraud, the sudden implementation without adequate infrastructure and training has created operational bottlenecks. For industries heavily dependent on temporary and contractual staff, the rule is already impacting productivity, compliance, and employee morale.

The coming weeks will determine whether EPFO adjusts the rollout plan or continues with mandatory implementation. For now, companies, especially staffing agencies, are hoping for flexibility to avoid payroll disruptions and maintain trust among workers.