The Delhi High Court has upheld the Central Government’s rule mandating that international employees working in India must contribute to the Employees’ Provident Fund (EPF), regardless of their salary level. The verdict confirms that this rule is constitutionally valid and ensures equal compliance for all employees under Indian establishments.
Key Highlights
- Mandatory for all foreign workers: Every international employee in an Indian EPF-covered organisation must contribute, irrespective of income.
- Indian employees’ limit: Only Indian workers earning up to ₹15,000/month are compulsorily covered.
- Court’s reasoning: The classification between Indian and international employees is reasonable because expats typically work shorter tenures and are not economically disadvantaged by the contribution.
- Employer’s duty: Companies employing foreign nationals must ensure EPF registration and regular deposits.
- Clarifies Conflicting Rulings: This judgment provides critical clarity, as it upholds the rule that was previously struck down by the Karnataka High Court in May 2024, removing ambiguity for businesses operating in the Delhi region.
Conclusion
The Delhi High Court’s decision reinforces India’s commitment to uniform social-security coverage. It clarifies that foreign employees are equally bound by EPF laws, removing ambiguity for employers and ensuring compliance across multinational workforces in India. This verdict also strengthens India’s global image as a fair and law-abiding employment destination for international professionals.
FAQs
1. Who is considered an international worker?
Ans: Any non-Indian employee working in an establishment covered under the EPF Act.
2. Do salary limits apply to them?
Ans: No. International employees must contribute to EPF regardless of their earnings.
3. Can they withdraw the full EPF balance anytime?
Ans: Only upon reaching 58 years of age or in case of permanent disability.
4. Why did the court uphold the rule?
Ans: It found the distinction between domestic and international workers fair and in line with policy goals.
5. What should employers do now?
Ans: Identify international staff, ensure EPF registration, and make regular contributions without exemption.
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