EPFO: EPFO challenges HC ruling against inclusion of foreign workers in its purview
In a recent judgment, the High Court held that the provisions of the EPF scheme covering ‘international workers’ were unconstitutional when foreign workers earning several lakhs had to contribute their entire salary to the provident fund, whereas contributions by Indians working abroad were limited to Rs 15,000. It was stipulated that
India has more than 150,000 expats, many of them from countries such as the US and UK that do not have social security agreements with India.
Expats from these countries working in India are eligible for provident fund deduction on full salary.
“EPFO is actively evaluating the course of action following this ruling,” the retirement fund organization said in a statement on Tuesday. According to officials, in appealing the verdict, EPFO is likely to point to the special provisions. It’s for international workers, film workers, people who work in newspapers. “Furthermore, the classification of employees based on salary was maintained under the classification test criteria in the previous ruling,” the official said. India has social security agreements with 21 countries, under which employees continue to contribute provident funds from home. But experts said the ruling brought relief to expats living in the country. “This is a welcome judgment from the Karnataka HC and will help reduce burdensome PF compliance for international workers (expatriates),” said Amit Agarwal, partner at Nangia & Co. According to Agarwal, the cash flow impact of the judgment on expatriates or foreign companies is very significant as EPF was previously calculated and deposited on the entire salary of foreign workers.
