EPF for International Workers

The definition of IWs covers both Indian employees and foreign employees within its scope: (i) Indian employees: Employees who have worked, or are going to work in a foreign country with which India has entered into a social security agreement, and who are eligible to avail benefits under a social security programme of that country, by virtue of the eligibility gained or going to gain, under the said agreement. Indian expatriate employee who has been an IW earlier, comes back to India, such Indian employee will no longer be considered an IW; and (ii) Foreign employees: Employees, other than Indian employees, holding other than an Indian passport, working for an establishment in India to which the EPF Act applies.
Legal Framework
A) Membership: IWs (other than Excluded Employees (as defined below)) are required to join the Fund and make PF contributions. The membership shall continue until occurrence of one of the following events: (i) IW withdraws amount standing to his credit in the Fund; (ii) IW is exempted from making contributions by appropriate government authority; or (iii) PF benefits are settled in terms of the relevant social security agreement entered into between India and his country of origin.
Classes of IWs (“Excluded Employees”) that are not required to join the Fund are: (i) IWs who are contributing to a social security program of their country of origin, either as a citizen or resident, with whom India has entered into a social security agreement (“SSA”) on reciprocity basis. Such IW must be enjoying the status of a ‘detached worker’; and (ii) IWs who are contributing to a social security program of their country of origin, either as a citizen or resident, with whom India has entered into a bilateral comprehensive economic agreement containing a clause on social security prior to 1 October 2008, which specifically exempts natural persons of either country to contribute to the social security scheme/fund of the host country.
B) PF Contribution: The actual PF contribution is 12% of the Monthly Pay (as defined below), and is made as follows: (i) 12% of the Monthly Pay is deposited by the employer with EPFO as its share of PF; (ii) 12% of the Monthly Pay is deducted from the IW’s salary by the employer and deposited with EPFO, as IW’s share of PF.
PF contribution shall be calculated on the basis of monthly payments of the IW containing the following components actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis: (i) basic wages; (ii) dearness allowance (all cash payments by whatever name called paid to an employee on account of a rise in the cost of living); (iii) retaining allowance; and (iv) cash value of any food concession (collectively “Monthly Pay”)
C) Withdraw of the Fund: IW may withdraw the full amount standing to his credit in the Fund upon (i) retirement from service in the establishment at any time after the attainment of 58 (fifty-eight) years; or (ii) retirement on account of permanent and total incapacity for work due to bodily or mental infirmity duly certified by a medical officer; or (iii) ceasing to be an employee of the establishment (in respect of IW covered under a notified SSA).
Source: BW People.in