The Employees' Provident Fund Organisation (EPFO) has clarified that drafting inconsistencies in the Employees' Provident Fund Scheme, 2026 have created ambiguity but do not reflect any policy change for international workers. According to reports from Business Standard, the retirement fund body attributed the confusion to typographical and drafting inconsistencies in the notified scheme that are already under examination. The EPFO stated there is no proposal to alter the existing contribution framework or other substantive provisions applicable to international workers under the draft EPF Scheme, 2026. The ambiguity was also flagged in post-notification analyses by professional services firms, including EY and Grant Thornton Bharat, which noted that the wording of the new scheme had raised questions over whether the statutory wage ceiling would apply to international workers.
The ambiguity arose because while some provisions in the notified scheme appeared to apply the statutory wage ceiling of ₹15,000 to international workers, others continued to refer to contributions on 'total wages', creating uncertainty over whether the long-standing contribution framework had been altered. As reported by Business Standard, the provisions relating to international workers had been carried forward 'substantially in the same manner' from the Employees' Provident Fund Scheme, 1952, and would continue to operate in accordance with India's bilateral social security agreements (SSAs). An Indian employee does not become an international worker merely by taking up a job abroad. The category applies only where the employee is covered under a bilateral SSA, which governs social security obligations between the two countries.
The issue is particularly significant for multinational companies employing expatriates in India, as applying the wage ceiling would have substantially reduced mandatory provident fund contributions for higher-paid international workers, with implications for payroll costs and compensation structures. According to Business Standard, international workers include foreign nationals employed in India covered under the EPF framework, as well as Indian employees posted to countries with bilateral social security agreements, such as the UK, Germany, France, Belgium and Japan. The EPFO's clarification indicates that no such change is intended. The new Employees' Enrolment Campaign, 2026 provides employers with a limited choice to voluntarily disclose previously uncovered employees or establishments, even in certain cases where inquiries are already pending, reflecting the Government's compliance-oriented approach.
The number of Certificates of Coverage (CoCs) issued to Indian employees posted to countries with bilateral social security agreements rose to 30,713 in 2023-24 from 14,798 in 2020-21, according to the EPFO's latest annual report for 2023-24. As reported by Business Standard, the EPFO no longer publishes the number of international workers covered under the provident fund system in its annual reports, with the last publicly available figure showing 28,205 international workers enrolled under the EPF framework as of March 31, 2018. The EPFO issues CoCs to Indian employees posted to countries with social security agreements, allowing them to remain covered under India's social security system instead of contributing to the host country's social security scheme.
Legal experts have highlighted the significance of the clarification for multinational companies. Debjani Aich, partner at CMS INDUSLAW, said the language in the notified scheme had created uncertainty because it appeared to cap provident fund contributions for international workers at the statutory wage ceiling, departing from the earlier framework. Pooja Ramchandani, partner at Shardul Amarchand Mangaldas & Co., explained that the statutory wage ceiling under the EPF Scheme, 2026 served separate purposes for determining eligibility and computing provident fund contributions, with the wage ceiling applying only to Indian workers for determining eligibility while international workers were linked to participation in bilateral social security agreements. The new framework also introduces Amnesty, 2026 permitting eligible establishments to regularise existing private provident fund arrangements subject to prescribed conditions, and emphasizes digital compliance with the Code on Social Security, 2020.
