Applicability of employee provident fund for international workers

The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (EPF Act) is a welfare legislation enacted to provide social security to the employees in the form of retirement or old age benefits. Accordingly, the Government of India framed the Employee Provident Fund Scheme, 1952 (EPF Scheme) and Employees’ Pension Fund Scheme, 1995.
An employees’ provident fund was set up to which the employer and employee had to contribute a certain sum.
The EPF Act is applicable to establishments who employ a minimum of 20 employees and notified by the Central Government. However, apart from the employees working in India, the EPF Act and the EPF Scheme also cover International Workers (IW) within its ambit.
An IW is:

• A foreign national working in India for an employer registered with the Employees’ Provident Fund Organisation (EPFO);
• An Indian employee working abroad in a country with which India has a reciprocal Social Security Agreement (SSA). He/she is also eligible to obtain the benefits under the social security programme of that country under the SSA.

Therefore, an Indian employee sent on posting to a country with which India has an SSA, or an employee coming to India to work from such a country, becomes an IW. Currently, India has an operational SSAs with 18 countries and a bilateral comprehensive economic agreement with Singapore.
EPF contribution by Indian employees abroad
Indian employees qualifying as IWs, working in a foreign country are exempted from contributing towards social security schemes in such foreign country if they satisfy the following two conditions:
India has an SSA with such foreign country; and if the IW obtains a Certificate of Coverage (CoC) from the EPFO.
After obtaining the CoC, Indian IWs are exempted from contributing to the social security system of the foreign country and are ineligible to avail the benefits under the social security schemes of that foreign country. However if an Indian employee is directly employed by a local employer in the foreign country, such an employee is covered by the foreign country’s legislation.
In the absence of an SSA with a foreign country, Indian employees who work in such foreign countries are required to make contributions to PF in India as well as of the foreign country. Similarly, Indian employees who do not obtain a CoC from the EPFO are also required to make contributions to Provident Fund in India as well as of the foreign country.
Source: Money Control