IT companies look beyond PF portal checks to detect moonlighting
Contents News/Article Date: 10th November 2022
Relating to which Act: The Industrial Disputes Act, 1947, The Industrial Employment (Standing Orders) Act, 1946; Information Technology Act, 2000; Code on Wages 2019; The Employees Provident Funds & Miscellaneous Provisions Act, 1952; The Income Tax Act, 1961
Applicable to which State: All the States and Union Territories
Type: News Item
Pertains to Employers and Employees and all relative stakeholders
Relevance of this news: Karma Management Global Consulting Solutions Pvt. Ltd is in the business of Payroll, Outsourcing, and Regulatory Compliances since its inception in 2004 since then, has brought in a lot of efficiencies and technological upgradations with experts on its role, to ease the hassles of Payroll Processing, Temp Staffing On-boarding Management, Regulatory and Payroll compliances by providing customized solutions to all its elite clients.
Now Karma Global is also entirely in labour compliance for nearly 18 years and is helping both establishments and workers fulfillment of obligations as per the laws of the land. It has over 200 staff, both direct and indirect on its rolls and operates on a Pan India basis. Recently, it has diversified into foreign shores, into countries like the US, UK, UAE, Canada, Philippines, and South East Asia for handling payroll, outsourcing, recruitment, and governance.
Karma Management has been keeping a very close tab on the development and implementation of the labour codes and rules and is well updated with the latest developments worldwide, especially on how the labour force is shaping up post covid in the midst of high levels of attritions in the IT Industry where Karma Management does a lot of work on Recruitment and Talent Acquisition, both in domestic and global frontiers in Canada, US, UK, UAE, South East Asia.
Now we have also heard of TCS coming up with a gig platform amidst the moonlighting woes. Now we will also have to wait and watch how the gig platform will get integrated with the labour codes which are awaiting implementation.
Also, the latest today on moonlighting is that some of the giant IT companies are looking beyond the PF portal to check and detect how many and where all their employees are engaged in moonlighting besides the regular work of employment on the payrolls where moonlighting is prohibited by them.
Subject IT companies look beyond PF portal check to detect moonlighting
For greater details, appended below is the complete news item
ET BUREAU
IT companies look beyond PF portal checks to detect moonlighting
Background verification firms are reporting a spike in requests from IT companies for additional checks on employees as managers step up efforts to stop workers from pursuing a second job on the sly.
Firms say that one out of three of their technology clients now wants some level of check for ‘moonlighting’, or dual employment, among both new joiners and existing employees, a sharp contrast from the level of scrutiny some two years ago.
These firms are skimming through freelance websites, such as freelancer.com, and fivver.com, and checking tax forms like 26AS, apart from the regular check of the Employees Provident Fund Organisation (EPFO) portal for signs of moonlighting. They say seven-eight people out of a sample size of 100 are found to be engaged in parallel assignments.
There is a significant increase in the number of clients asking for moonlighting checks,” said Ashok Hariharan, chief executive at tech-based identity verification firm IDfy. “The increase is quite sudden and rapid.”
“Two years ago, we had no client who was enquiring about this. The trend started about a year ago when some clients started making subtle references to this, asking how one can detect,” he told ET. “Today, one out of three of our technology clients wants some level of check for moonlighting or dual employment.”
Employers are seeking additional services from background verification firms, apart from their usual routine checks for new joiners, as employers are worried about data breaches and the leaking of clients’ confidential information.
AuthBridge Research Services, another large player in this space, said the number of consultations has risen “exponentially” over the last few months.
Apart from taking external help, companies are also tracking the internal engagements of employees. Mid-cap IT companies and global capability centers are the top clients availing of this service.
We have various ways of figuring it (moonlighting) out. If you use things like Microsoft Outlook, there are various ways you can figure out using technologies on how far employees are engaged, how many meetings they are attending, and how far they are accessible. And once you figure that out, there are ways and means of figuring out whether people are working at more than a place,” Sandeep Kalra, chief executive, of Persistent Systems told ET, adding that there have been a handful of cases.
Methods used to track and crack
The companies’ first repository to find clues remains the government’s provident fund portal and an individual’s tax filings. EPFO check can confirm if an employee is receiving salary from more than one source.
Apart from this, IDfy said it runs checks on freelancing websites like freelancer.com and fivver.com to see if there are any matches with employees. “Bank account statement analysis can also reveal inward payments. However, this requires consent from the employee or candidate and is not very common,” said Hariharan.
Ajay Trehan, the founder of AuthBridge, said, “We use proprietary algorithms and technology to enable businesses to verify dual employment using employee’s UAN and Form 26AS.”
Out of the most randomly chosen set of employees for these companies, around 7-8% of the employees are currently moonlighting, he added.
These companies said most clients who are availing of these services are midcap IT services companies and global capability centers. Multinational companies working in deep, proprietary technologies are exploring these checks, largely because of concerns about their proprietary technologies being compromised, IDfy said.
The companies and HR experts said most candidates indulging in parallel assignments are dropped if they are new joiners and let go if they are on their payrolls. In most cases, such services are availed of proactively by IT service providers and rarely initiated on clients’ request, they said.
The practice, commonly known as moonlighting, refers to pursuing more than one job at a time. Remote working has helped employees take up this option.
Technology and software companies in India are divided on whether to allow their employees to ‘moonlight’ while still being on their payrolls.
Last month, Infosys became the first software company in the country to allow external gigs with the prior consent of managers, subject to certain conditions. India’s largest IT firm Tata Consultancy Services, however, called the practice an “ethical issue” and a violation of employee contracts. Bengaluru-based Wipro and Infosys had earlier said that they had sacked employees.