Context & Rulings

Writ petitions challenged special provisions for IWs under Para 83 (EPF Scheme, 1952) and Para 43‑A (EPS, 1995). The Single Bench of the Hon’ble High Court of Karnataka struck these as ultra vires. However, the Bombay High Court previously upheld the constitutionality, and the Delhi High Court has now reiterated that the classification of IWs is reasonable and justifiable.

Why it matters: Para 83 places IWs in a special class, linking them to PF on full salary, and interfaces with India’s Social Security Agreements (SSAs).

Key Issue: Contributions

The most debated point is that IWs contribute on full pay (no threshold), whereas Indian employees contribute only when statutory pay components are below ₹15,000/month.

What Indian Employers Should Do Now

• Reassess PF compliance for foreign nationals to align with EPF provisions and minimise default risk.
• Review EPFO communications and evaluate dues exposure for international staff.
• Revisit payroll structures, assignment contracts, and model cost projections.
• Adopt a proactive stance; prepare governance now.
• Maintain an IW compliance checklist and enable PF for expats in payroll/ECR.
• Reconcile payroll vs EPFO data monthly, including Aadhaar and mobile linkage.
• Mitigate penalties & reputational risk—don’t defer action.
• Include foreign nationals under EPF where applicable, at the earliest possible date.
• Register IWs and start contributions promptly; consider the “Employee Enrolment Scheme 2025.”
• Comply irrespective of tenure—2–5 year engagements are in scope.
• Anticipate demand notices; work diligently toward remediation.

Way Forward

For Employers: Review your workforce to identify foreign nationals; verify EPF contributions under applicable rules. If gaps exist, consult compliance advisors.

For Foreign Employees: Confirm EPF enrollment and understand your rights on contributions, withdrawal timing, and tenure impacts.

For Both: Maintain clear records of employment, salary, contributions, and EPFO correspondence. Be prepared for possible retrospective settlement.