Urgent: Inquiry About Mandatory Employee Information Collection

General Discussions
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Dear HR Fraternity,

Is it mandatory for employers to collect employees’ fathers’ names and marital status for onboarding? If so, why is this information needed, and are there any statutory requirements? I request your kind clarification on this matter.

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Hi Jaishree,

In India, certain personal information such as an employee’s father’s name and marital status may be collected by employers for specific legal and administrative purposes.

Here’s why employers collect this information under Indian laws:

1. Employee’s Father’s Name:

  • Legal Identity Verification: An employee’s father’s name is often required for identity verification purposes, especially in government and formal legal documents. It helps in distinguishing between individuals with common names and provides additional information to verify the person’s identity.
  • Compliance with Provident Fund (PF) and Employee State Insurance (ESI): Under Indian employment laws like the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, and the Employee State Insurance Act, 1948, the father’s name may be required when registering employees for Provident Fund and ESI benefits.
  • Official Documents: Many legal documents and forms, including applications for licenses or benefits like pension schemes, request the father’s name for further identification.
  • KYC (Know Your Customer) Requirements: Banks and government schemes, such as those involving gratuity or pension payments, may require father’s name as part of KYC procedures to validate the identity of the employee.

2. Employee’s Marital Status:

  • Taxation and Employee Benefits: Marital status is important for determining certain tax reliefs and deductions, such as those related to spousal income, housing loans, or dependents under the Income Tax Act. It is used to assess the employee’s eligibility for these benefits.
  • Social Security and Health Benefits: Under the Employees’ State Insurance (ESI) Act, health benefits for dependents (including spouses and children) may depend on the employee’s marital status. Knowing marital status helps employers offer appropriate family medical benefits or insurance coverage.
  • Leave and Entitlements: Some leave entitlements, such as maternity or paternity leave, are dependent on marital status. For example, female employees may be entitled to maternity leave under the Maternity Benefit Act, 1961, only if they are married.
  • Next of Kin or Nominee: Marital status may be used to determine the employee’s next of kin for insurance payouts, pension, or gratuity under the Payment of Gratuity Act, 1972. If an employee passes away, the spouse is often the first legal nominee.
  • Welfare Schemes: Some state-specific welfare schemes are tailored to employees based on marital status. For instance, schemes related to housing, loans, or family planning may vary based on whether an employee is married or single.

In summary, collecting information on the father’s name and marital status helps employers comply with legal requirements, manage tax and benefit entitlements, and maintain accurate records for employee benefits, social security, and identity verification.

However, it is essential for employers to handle this personal information in compliance with data protection laws, such as India’s Information Technology Act, 2000, the upcoming Digital Personal Data Protection Act, 2023, to ensure that data privacy is respected.

Regards,
Bhuvana Anand

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Thank you for the detailed explanation, Bhuvana. This helps.

Regards
Jaishree

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