SPECIAL PROVISION FOR INTERNATIONAL WORKERS
FREQUENTLY ASKED QUESTIONS (FAQs)
Updated on 25.05.2012
1. Who is an International Worker (IW)?An International Worker (IW) may be an Indian worker or a foreign national. International Worker means: –
– Any Indian employee having worked or going to work in a foreign country with which India has entered into a social security agreement and being eligible to avail the benefits under social security programme of that country, by virtue of the eligibility gained or going to gain, under the said agreement;
– An employee other than an Indian employee, holding other than an Indian Passport, working for an establishment in India to which the EPF & MP Act, 1952 applies;
2. Is an Indian worker holding COC (Certificate of Coverage), an International Worker?Merely holding the COC does not make an employee an International Worker. He becomes IW only after being eligible to avail the benefits under social security programme of any country. After obtaining COC, the employee is exempted from contributing to the social security systems of the foreign country with whom India has SSA, hence he is not eligible to avail the benefits under the social security programme of that country.
3. Who is an ‘excluded employee’ under these provisions?A detached International Worker contributing to the social security programme of the home country and certified as such by a Detachment Certificate for a specified period in terms of the bilateral SSA signed between that country and India is an ‘excluded employee’ under these provisions.
4. Who all shall become the members of the Fund?a) Every International Worker, other than an ‘excluded employee’ – from 1st October, 2008.
b) Every excluded employee, on ceasing the status – from the date he ceases to be excluded employee.
5. Which category of establishments shall take cognizance of these provisions?All such establishments covered/coverable under the EPF & MP Act, 1952 (including those exempted under section 17 of the Act) that employ any person falling under the category of ‘International Worker’ shall take cognizance of these provisions.
6. Whether PF rules will apply to an employee if his salary is paid outside India?Yes, the provisions will apply irrespective of where the salary is paid. The PF contributions are liable to be paid on wages DA, and Retaining Allowance if any payable to the employee hence if salary is payable by establishment in India contribution shall be payable in India and other rules will also apply accordingly
9. What portion of salary on which PF would be payable in case an individual has multiple country responsibilities and spends part of his time outside India?Contribution is payable on the total salary payable on account of the employment of the employee employed for wages by an establishment covered in India even for responsibility outside India.Online GST Certification Course by TaxGuru & MSME- Click here to Join
10. Is there a minimum period of days of stay in India which the employee can work in India without triggering PF compliance?No minimum period is prescribed. Every eligible International Worker has to be enrolled from the first date of his employment in India.
11. Is there a cap on the salary up to which the contribution has to be made by both the employer as well as the employee?No, there is no cap on the salary on which contributions are payable by the employer as well as employee.
12. Is there a cap on the salary up to which the employer’s share of contribution has to be diverted to EPS?No, there is no cap on the salary up to which the employer’s share of contribution has to be diverted to EPS, 1995 and the same is payable on total salary of the employee.
b) Exportability of Pension: Provision for payment of pension benefits directly without any reduction to the beneficiary choosing to reside in the territory of the home country as also to a beneficiary choosing to reside in the territory of a third country.
c) Totalisation of Benefits: The period of service rendered by an employee in a foreign country is counted for determining the “eligibility” for benefits, but the quantum of payment is restricted to the length of service, on pro-rata basis.
Eight Social Security Agreements in respect of Belgium, Germany, Switzerland, Denmark, Luxembourg, France, South Korea and the Netherlands have been made effective from 1st September, 2009, 1st October, 2009, 29th January, 2011, 1st May, 2011, 1st June, 2011, 1st July, 2011, 1st November, 2011 and 1st December, 2011 respectively.
18. Regarding Indian employees working abroad and contributing to the social security scheme of a country with which India DOES NOT have a Social Security Agreement, are they coverable for PF in India?If an Indian employee is employed in any covered establishment in India and sent abroad on posting, he is liable to be a member in India as a domestic Indian employee, if otherwise eligible. He is not an International Worker.
21. What is the criterion for receiving the withdrawal benefit for services less than 10 years under EPS, 1995?Only those employees covered by a SSA will be eligible for withdrawal benefit under the EPS, 1995, who have not rendered the eligible service (i.e. 10 years) even after including the totalisation benefit if any as may be provided in the said agreement. In all other cases of IWs not covered under SSA, withdrawal benefit under the EPS, 1995 will not be available.
22. How long can an Indian employee retain the status of “International Worker”?An Indian employee attains the status of “International Worker” only when he becomes eligible to avail benefits under the social security programme of other country by virtue of the eligibility gained or going to gain, under the said agreement on account of employment in a country with which India has signed SSA. He/she shall remain in that status till the time he/she avails the benefits under EPF Scheme. In other words, once an IW, always an IW.
23. Whether the International Worker will earn interest even after cessation of service after three years also in view of provisions of inoperative accounts?.Since the provisions of inoperative accounts are not applicable in case of international workers, continue the restriction of earning interest will not apply. The international worker shall contribute to earn interest upto the age of 58 years or otherwise becomes eligible for withdrawal.
24. Under what circumstances in which accumulations in the Fund are payable to an International Worker– On retirement from service in the establishment at any time after the attainment of 58 years. On retirement on accounts of permanent and total incapacity for work due to bodily or mental infirmity. A member suffering from tuberculosis or leprosy or cancer. In respect of a member covered under a social security agreement entered into between the Government of India and any other county on such grounds as may be specified in that agreement till the time he/she avails the benefits under a social security programme covered under that SSA.
25. Under what condition the contributions received in the PF account are payable along with interest to International Worker?
The full amount standing to the credit of a member’s account is payable if anyone of the circumstances mentioned under amended Para 69 of the EPF Scheme, 1952 is fulfilled, namely:-
i) on retirement from service in the establishment at any time after 58 years of age;
ii) on retirement on account of permanent and total incapacity for work due to bodily or mental infirmity, duly certified by the authorised medical officer; iii) in accordance with the terms and conditions provided in an SSA.
26. Is there a cap on the salary up to which the contribution has to be made under the EDLI Scheme, 1976 by the employer?
Yes, the cap on the salary up to which contribution has to be made under the EDLI Scheme, 1976 is Rs. 6,500.