IWs faced a lot of problems when returning to India, in terms of higher contributions and restrictions on the withdrawal of accumulated balance.
The EPFO (Employee Provident Fund Organisation) has now clarified that an Indian employee qualifying as an international worker (IW) for working/having worked in a country with which India has an SSA, will reacquire the status of an Indian employee upon repatriation to India after completion of overseas duty. Accordingly, such employees will not be subject to the special provisions applicable to IW after repatriating to India.
This announcement comes in the wake of some confusion regarding social security programmes for employees deputed to work outside India.
In 2008, the Indian government made the social security scheme mandatory for employees working outside India. It made a special International Workers (IW) category and brought them under the purview of Employees’ Provident Fund (EPF) and the Employees’ Pension Scheme (EPS). In that, it defined the term ‘IW’ as an Indian employee who has worked/is going to work in a country with which India has a social security agreement (SSA) and who is eligible to avail the benefits of the social security programme of that country by virtue of such SSA.
But the problem was that once one got an IW status, he/she retained the IW status until one availed benefits of Indian social security. These IWs faced a lot of problems when returning to India in terms of higher contributions and restrictions on the withdrawal of accumulated balance as applicable to IWs.
But now, Employees Provident Fund Organization (EPFO) has made it clear that only those Indian employees will qualify as International Worker (IW), who have worked or are working without having obtained a certificate of coverage (COC), in a country with whom India has a social security agreement (SSA).
Once the COC is obtained from EPFO, they will not qualify as WI and will be exempted from contributing to the social security system of the foreign country and cannot avail the benefits of the social security programme of that country.
These IWs will reacquire the status of Indian employees upon repatriation to India after completion of overseas assignments and they do not have to comply with the rule applied to IWs.
This has removed the burden faced by both the employers and the employees and will now lead to better compliance of the regulations. However, further clarity is awaited on the already higher contributions made by the employees. A progress on that aspect will be welcomed by the employees affected by the stipulation.