Foreign expatriates working in India will now be covered under the Employees’ Provident Fund Organization (EPFO).
In a major ruling, the Delhi High Court clarified that EPFO rules apply equally to both Indian and foreign employees working for any company in India.
The court ruled that employers cannot exclude foreign employees just because they are working temporarily in India or earn higher salaries than Indian limits.
This means that anyone working in India and drawing a salary from an Indian company must become an EPFO member.
Contents
A Major Shift in India’s Social Security Framework
This decision marks a big change for companies and India’s overall social security system. Both multinational companies
and foreign professionals will now have to follow Indian laws related to Provident Fund (PF) and pension schemes.
The court also stated that the definition of “employee” under Section 2(f) of the EPF Act, 1952, does not discriminate based on nationality.
It emphasized that Indian labor laws apply to everyone working on Indian soil — this is a principle of equality, not inequality.
Why Companies Face a Setback
Until now, many Indian and multinational companies treated PF contributions for foreign employees as optional. They often argued that:
Foreign workers are in India only for a short time, or
Their salaries exceed the Indian PF limit.
After this ruling, these reasons will no longer be valid. Companies must now open a PF account for every foreign employee and deposit 12% of the employee’s salary along with a matching 12% company contribution into the EPFO.
If companies failed to do this earlier, they will now have to pay the pending dues along with penalties and interest.
Why This Is Good News for Foreign Employees
This judgment is a relief for foreign workers because they will now get the same social security benefits as Indian employees — including PF savings, pensions, and retirement funds.
They can no longer be denied these benefits simply because they are working in India temporarily.
Legally, they will now fall under the “International Workers” category, which ensures their PF contributions remain safe.
If India has a Social Security Agreement (SSA) with their home country, they can even transfer their PF balance back home after returning.
The Case Background
Several companies had earlier challenged the EPFO notification requiring PF accounts for foreign employees. They argued that since such employees work only for a short period, enforcing PF rules was unfair.
However, the Delhi High Court dismissed these petitions, stating that the law applies equally to all.
The court reaffirmed that EPFO’s main goal is to provide social security and provident fund benefits to every employee, regardless of nationality.
EPFO 3.0: Moving Toward Global Standards
This ruling comes when the central government is upgrading EPFO under its “EPFO 3.0” initiative, aimed at making the organization more digital, transparent, and globally aligned.
With this step, India’s social security system becomes more internationally compatible, ensuring that foreign professionals working here get the same protection as Indian workers.
What Companies Must Do Now
After this judgment, companies must:
Review their HR and payroll policies immediately.
Issue a Universal Account Number (UAN) to every foreign employee.
Start regular PF contributions and submit reports to EPFO.
Deposit any pending PF payments with interest if not done earlier.
This ruling sends a clear message — PF compliance is now mandatory for all employees in India, including foreigners.
A New Chapter for Worker Equality in India
This decision is more than just a legal update — it’s a major step in expanding India’s social security network.
It shows that India is committed to giving equal rights and protections to all employees, whether Indian or foreign.
With thousands of foreign professionals working in India’s IT, consulting, finance, and FMCG sectors, this move ensures they also enjoy retirement savings
and pension coverage, strengthening India’s reputation as a fair and employee-friendly destination.