Foreign employees under EPFO scanner for flouting claim norms

May 15 2014, 01:00 IST
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SummaryForeign workers in India have come under the EPFO scanner as some of them have flouted rules...

Foreign workers in India have come under the EPFO scanner as some of them have flouted rules by withdrawing their provident fund before attaining 58 years of age.

The present rule does not allow early withdrawal of PF by foreign workers coming from countries with whom India does not have any social security agreement (SSA). The PF amount is payable on retirement from service after attaining the age of 58 or retirement due to permanent “incapacity” for work duly certified by a medical officer. If a worker comes from a country which has a SSA with India, he or she is exempted from contributing to PF.

“It has come to the notice that contrary to these provisions, the PF accumulations in respect of international workers from non-SSA countries is being settled before attainment of 58 years of age,” the EPFO said in an internal circular, asking all regional offices to verify such cases of settlement of PF claims.

India has so far implemented SSAs with a handful of countries such as Germany, France, Netherlands, Switzerland, Belgium, Denmark till March 2013. SSAs have been signed with about half a dozen countries, including Japan, Sweden, Canada during 2012-13 and they are being implemented.

India is also negotiating similar pacts with the US, UK, Australia, Spain, Russia, Sri Lanka, Thailand for similar pacts as Indian workers are increasingly migrating to developed nations for jobs and MNCs are relocating foreign workers in their Indian units.

With rise in influx of foreign workers in India, the EPFO is faced with urgent task of enforcing social security rules. Last month, the EPFO has initiated reconciliation of data on foreign workers with Foreigner Regional Registration Offices with those obtained from companies to ensure compliance on PF contribution and withdrawals.

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