EPF contribution now mandatory for international workers in India, court rules

The Delhi high court has upheld the Centre’s notifications mandating all international employees working in India to contribute to the Employees’ Provident Fund (EPF), regardless of their income level, Hindustan Times reported. The decision confirms the government’s stance that the rule does not violate equality provisions under Indian law.

A bench comprising Chief Justice D.K. Upadhyay and Justice Tushar Rao Gedela dismissed a petition filed by SpiceJet challenging the Centre’s 2009 and 2010 notifications. The airline had argued that making foreign workers contribute to the EPF irrespective of salary, while applying the scheme to Indian employees only if they earned ₹15,000 or less per month, was discriminatory.

The court, however, found the classification to be reasonable and based on “rational distinction.” It held that requiring all Indian employees to contribute regardless of salary could cause “economic hardship,” while foreign workers, typically employed in India for shorter tenures of two to five years, would not face such long-term financial strain.

“The classification made by inserting and later substituting Paragraph 83 in the principal scheme is reasonable,” the court said in its judgment. “The purpose of mandating an employee to be a member of the fund is to provide social security.”

Under the Employees’ Provident Funds and Miscellaneous Provisions Act, “international workers” include non-Indian employees working for establishments covered by the EPF scheme, as well as Indian employees posted abroad in countries with which India has a Social Security Agreement (SSA). These agreements enable the transfer of social security benefits between signatory nations and help avoid dual contributions.

The Centre’s counsel defended the rule, asserting that it aligned with international best practices and ensured parity in social security treatment for expatriates working in India. The court agreed, emphasising that the intent was not discriminatory but protective in nature, safeguarding workers’ rights under global reciprocity frameworks.