Employee provident fund guidance concerning international workers

Changes made to India’s Employees’ Provident Funds Scheme, 1952 (EPFS) and Employees’ Pension Scheme, 1995 (EPS) in 2008 added 'international workers' within the Indian social security regime. Recently, India’s Employees’ Provident Funds Organisation issued a circular directing its field officers to determine full compliance in respect of all international workers.


(Ministry of Labour & Employment, Govt. of India) Head Office

Bhavisnya Nidhl Bhawan, 14, Bhikaiji Cama Place, New Delhi — 110066

No. IWU/7(11)2011/ Compliance./5037Dated- 23/05/2013

Subject: Smiling Compliance under Para 83 of Employees’ Provident Fund (Amendment) scheme 2010 and Para 43A of Employees’ Pension (Amendment) scheme 201 0-Regarding.

As you arc aware special provisions were made by the Crovernrnent in respect of International Workers by inserting Para 83 (vide GSR 706E dated 01/10/2008) and Pam 43A (vide GSR 705(E) dated 0111012008) in the Employees’ Provident Fund Scheme 1952 and Employees’ Pension Scheme 1995 respectively.

According to the Special provisions of the EPF Scheme 1952, contributions in respect of an International Worker (i.e. employer’s and employee’s) were required to be remitted by an employer on full pay (i.e. without ceiling of Rs.65001 per month) w.e.f. In of November 2008 or from the date of joining, whichever was later. The restrictions on the diversion of 833% from the employer’s share of EPF contribution towards the employees’ pension fund was also done away with vide GSR 149 dated 03/09/2010. Thus, it is very clear that in respect of the International workers, the contributions had to.be deducted and remitted under EPF as well as EPS Scheme on full pay without any ceiling (Where “Pay” consist of basic wages, Dearness allowance, Retaining allowance (if any) and cash value of food concession (if any)).

In this context while scrutinising a case referred to the Head Office by the Embassy of Republic of Peru, the following serious aberrations were noticed:

1. Even though the international Worker had apparently joined service in a covered establishment (MIS Shipnet Software Solutions India Pvt. Ltd.) on 1/4/2009, the provident fund and pension contributions were deducted only from June 2009.

2. The deduction of P.F, contribution as well as diversion of EPS contribution was not being made on full Pay from due dates.

The instant case pertains to Regional Office, Tambararn. However, other field offices also might be having similar cases where employers arc not remitting the contributions as per stipulated Law.

The employers need to be educated and updated appropriately about the special provisions relating to the International Workers because such violations of the provisions entail very serious consequences for the employers Jay way of liability towards both damages under section 14B and penal interest under section 7Q including prosecution under Section 14 of the EPF&M.P Act1952. At the same time, such monitoring lapses on the part of the EPFO field offices in ensuring proper administration of the special provisions relating to the International Workers shall cause embarrassment to the EPFO. However, more than anything else, an International Worker shall face financial loss and great difficulties when totalization of benefits is attempted under various Social Security Agreements.

The Regional PF Commissioners of the field offices are expected to streamline their enforcement machinery to ensure full compliance in respect of all International Workers. The data may be collected from FRROs for cross checking to ensure due compliance.

Willful defaulters may also be considered for booking under Law to have deterrent impact and ensuring strict compliance.

Yours faithfully,

(K.C. Panday)

Additional Central PF Commissioner (MU)

Categories: Corporate Law


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