The Employees Provident Fund and Miscellaneous Provisions Act, 1952 (EPF Act) and the Employees Provident Fund Scheme, 1952 (Scheme) make special provisions in respect of International workers (i.e., employees holding passports of a country other than India). The Scheme requires an employer to make contributions in respect of an international worker in accordance with its provisions, unless such international worker is an 'excluded employee'.1
Under the Scheme, international workers (who were not excluded employees under an SSA executed with India) were allowed to withdraw the funds contributed by them and their employers in India (on their behalf) in accordance with the provisions of the relevant SSA. Most operative SSA’s are silent on withdrawal of provident fund contributions by international workers. In the absence of such provisions governing withdrawal, international workers were allowed to withdraw their contributions only when they turned 58 years old and not upon their return to their home country.
By a notification dated 05 October 2012, the Ministry of Labour and Employment has now allowed international workers (from countries with which India has executed an SSA) to withdraw their provident fund contributions when their employment in India ceases. This implies that international workers from countries which have operative SSAs with India (Belgium, Germany, Switzerland, Denmark, South Korea, Netherlands, Luxembourg and France), irrespective of whether the SSA makes a provision for the same or not, will be able to withdraw their social security contributions when they leave India and that such amount would no longer be held in India until such international worker turns 58. Further, the notification provides that the funds are payable directly to the account of these international worker or to the account of the employer in India.
This notification would bring much relief to international workers from countries which have executed an SSA with India to repatriate all their earnings from India at the time of their return.