SC to hear challenge to EPF rules governing international workers
New Delhi, Mar 12, 2026
Supreme Court issues notice on plea challenging EPF Scheme provisions requiring foreign nationals working in India to contribute to provident fund
The Supreme Court on Thursday agreed to examine whether foreign nationals working in India are required to contribute to the Employees’ Provident Fund (EPF) under the Employees’ Provident Fund Scheme, 1952.
A Bench of Justices P S Narasimha and Alok Aradhe issued notice to the Union government on a petition filed by LG Electronics challenging the validity of Paragraph 83 of the EPF Scheme, which governs provident fund contributions by “international workers”. The Court also directed that final orders should not be passed in proceedings initiated against the petitioners under Section 7A of the EPF Act while the matter remains pending.
The challenge concerns Paragraph 83, introduced through government notifications in 2008 and 2010, which created a specific framework for provident fund contributions by foreign employees working in India. The provision was introduced after India began entering into Social Security Agreements (SSAs) with several countries to coordinate social security coverage for employees working across jurisdictions.
These agreements aim to prevent double social security contributions, ensure portability of benefits, and protect employees temporarily deputed to another country.
Under the EPF framework, an “international worker” broadly includes foreign nationals employed in establishments in India covered by the EPF Act. Such employees are required to contribute to the provident fund unless they qualify as “excluded employees”, such as those already covered under a social security system in their home country pursuant to an SSA with India.
In the absence of such an agreement, foreign employees must contribute to EPF regardless of salary level, unlike Indian employees, who are mandatorily covered only up to the statutory wage ceiling. Companies employing expatriates have challenged the provisions, arguing that they mandate contributions even for short-term assignments while restricting withdrawal of accumulated funds until retirement age.
In November last year, the Delhi High Court dismissed petitions filed by SpiceJet and LG Electronics challenging the 2008 and 2010 notifications. The court held that the Centre was empowered to extend the EPF Scheme to foreign nationals and that treating international workers as a separate class for provident fund purposes was constitutionally permissible. LG Electronics has since approached the Supreme Court against the High Court ruling.
During the hearing, counsel for LG submitted that divergent views expressed by different High Courts have created uncertainty on the issue and require authoritative resolution by the Supreme Court.
The Employees’ Provident Fund Organisation (EPFO) told the Court that it serves as the nodal agency responsible for implementing India’s social security agreements. It cautioned that striking down Paragraph 83 could have wider international implications and might amount to a “material breach” under the Vienna Convention on the Law of Treaties, as the provision forms part of India’s framework for implementing such agreements.
The EPFO also informed the Bench that India has concluded nearly twenty SSAs with foreign countries and recently finalised one with the United Kingdom. Taking note of these submissions, the Court directed the EPFO to place on record a compilation of relevant treaties and related materials to assist the Bench in deciding the issue.
[The Business Standard]
