1. Who is an International Worker (IW) as per the EPF Act?
An International Worker (IW) is any employee who is a foreign national working in India under an employer registered with the EPFO or an Indian employee who is working in a foreign country with which India has a Social Security Agreement (SSA).
2. What is a Social Security Agreement (SSA)
A Social Security Agreement is a bilateral arrangement designed to safeguard the social security rights of workers assigned to another country. This reciprocal agreement ensures equal treatment and prevents dual social security contributions.
3. Are Indian employees deputed abroad exempted from contributing towards the Social Security Scheme of that foreign country?
Indian employees deputed abroad are required to contribute to the social security scheme of the host country. However, they are exempt from contributing to India's social security scheme if they obtain a Certificate of Coverage (CoC) from the Employees' Provident Fund Organisation (EPFO).
4. If Indian employees are deputed to a foreign country that does not have an SSA with India, would they then be obliged to contribute towards EPF?
Yes, in the absence of a Social Security Agreement (SSA) with the foreign country, the Indian employee is required to contribute to the social security scheme of both India and the host country.
5. In case an IW completes his/her assignment and returns to India, will he/she continue to be considered an IW?
No. Such employees will reacquire the status of an Indian employee upon repatriation to India after completion of their overseas assignment. Upon reacquiring the status of an Indian employee, they must contribute towards the EPF according to the provisions of the Act
6. For an IW, what is the cap on salary up to which the contribution is made by the employer and the employee to the PF and EPS?
There is no cap on the salary. Contribution of 12% og Employee gross wages and 12% of Employer contribution is payable towards the EPF and EPS.
7. Regarding Indian employees working abroad and contributing to the Social Security Scheme of that country with whom India has a Social Security Agreement, are they coverable for PF in India or treated as excluded employees?
An Indian employee sent on posting to a country with which India has an SSA becomes an “International Worker‟ and he can, however, seek exemption from the PF in India by obtaining a Certificate of coverage.
8. Whether Overseas Citizen of India (OCI/Person of Indian Origin (PIO) card holder will be treated as IWs?
All foreign nationals, including OCI/PIO card holders are required to be enrolled and comply with EPFO, as IWs.
9. What is the IW 1 or IW1 Return filed to the EPFO?
IW1 Return is a monthly return that employers in India are required to file with the Employees’ Provident Fund Organization (EPFO) for their international workers.
10. Whether foreigners employed directly by an Indian establishment are coverable?
Foreigners employed directly by an Indian establishment would be coverable under the EPF and MP Act, 1952 as IWs and would be eligible for the benefit of detachment under a SSA.
11. How long can an Indian employee retain the status of “International Worker”?
An Indian employee attains the status of “International Worker” only on account of employment in a country with which India has signed SSA.
12. What is the penalty for employer towards not filing PF IW return?
The EPF Act punishes with imprisonment of minimum one month to maximum six months & fine up to rupees 5000 from the employer for not filing the IW-1 return on time. The penalty amount may vary ranging from 5% to 25% depending on the period of delay and the number of international workers involved.
13. What is a certificate of coverage?
Certificate of Coverage (COC) is a certificate issued by the liaison Agencies of the respective SSA country, with whom India has signed Social Security Agreement (SSA), certifying therein that the person who is being deputed to India, is covered under the Social Security System of his home country. EPFO issues COC in respect of Indian workers being deputed to SSA countries and based on this Certificate Indian Workers are entitled to exemption from contributing under Social Security System of host country.
14. Is repatriation of pension possible ?
In the case of an international worker from a country with a Social Security Agreement (SSA), repatriation of pension funds is possible. However, if there is no SSA in place, the international worker will not be able to repatriate their pension funds.
15. Which are the countries signed SSA agreements were India has signed?
As on date, India has signed and operationalized Social Security Agreements (SSAs) with 18 countries - Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Hungary, Japan, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, and South Korea.
16. What is the mechanism of payment to an International Worker from Non SSA country, who does not have bank account in India ?
The benefit of exportability of benefits is not allowed to nationals of Non SSA countries. They can receive their PF accumulations in Indian Bank account.
17. What is the procedure of withdrawal of PF for International Worker?
PF withdrawal can be taken by submitting Form No 19 (online if UAN is linked to Aadhaar and Bank Account in India) to the concerned Regional / Sub .Regional Office in whose jurisdiction the establishment in which he /she was employed, is covered. As per provision of Para 72(2) under Para 83 of EPF Scheme, the due amount of an IW from SSA country can be paid to his bank account in India or his home country.
18. Whether PF will be payable only on the part of salary paid in India in case of split payroll?
In case of Split payroll the contribution shall be paid on the total salary earned by the employees in the establishment covered in India.
19. Whether Nepalese & Bhutanese nationals are International Workers ?
The proviso to Substituted Para 2(ja) under Para 83 of the EPF Scheme provides that Nepalese and Bhutanese nationals shall be deemed to be Indian Workers.
20. What is the procedure for getting Certificate of Coverage in respect of a person posted to a country having SSA with India ?
For availing the COC, the prescribed online application forms, available on International Workers Portal on the official website of EPFO, needs to be filled up by the employee, approved by the employer using e-sign and submitted online to the office of EPFO, under whose jurisdiction the establishment is registered.
21. Whether pension benefits can be availed by the claimant belonging to SSA country in their home country?
Yes, as portability has been provided in the SSAs, the persons covered under such SSA can opt for payment of Pension benefits in their home country