Yes, you do need to move the close out of the while loop. However I have a couple of questions:

1) Why are you assigning to @_ ? @_ is a special Perl var, and it is confusing (to me at any rate) to see you using it as a simple scratch array.

2)Why aren't you returning the hash? If a subroutine has no return value, I find that the main code is confusing because there is the magic hash (or other var) that appears and I don't know to associate it with the routine that created it.

Additionally the use of globals (%passfile and $pass_file) is generally bad practice, and should be avoided.

Here's how I would write it (just a suggestion mind you)

sub read_passfile {
    my $file_name = shift; #Pass the file name to the routine
    my @temp;
    my %passfile = ();
    open (PF, $file_name) or die "Couldn't read password file: $!";

    while (<PF>) {
        chomp;
        @temp = split("\t", $_);
        $passfile{ $temp[0] } = $temp[1];
    }
    close PF;
    return %passfile;
}
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Cheers,
Erik

Update:Fixed a silly typo. Thanks jeffa