Retirement funds requesting names of foreign workers

21 Apr 14

INDIA

IMPACT – MEDIUM

What is the change? The Indian agency that handles employee retirement funds, the Employees’ Provident Fund Organization (EPFO), is asking the Foreign Regional Registration Offices (FRRO) for complete lists of foreign nationals working in India.

What does the change mean? Companies with foreign workers must be in compliance with EPFO requirements and make contributions to the provident (retirement) fund accounts of each employee. The EPFO is seeking the names of foreign workers, and some regional offices are asking for documentary proof of retirement contributions.

  • Implementation timeframe: Immediate.
  • Visas/permits affected: Employment visas.
  • Who is affected: Companies required to register and pay into the fund.
  • Impact on processing times: None.
  • Business impact: The new scrutiny is a compliance reminder to companies obligated to contribute to the fund.
  • Next steps: Employers should make sure they are complying with the registration and contribution requirements.

Background: The Provident Fund Act requires that companies with 20 or more employees contribute to the retirement fund accounts of each employee, including workers employed through contractors. Foreign nationals working in India for more than 180 days must be registered with the FRRO within 14 days of their arrival. Contributions into the fund cover workers for various social security programs provided by EPFO. On April 1, EPFO issued a memo directing its regional offices to obtain lists of foreign workers from FRRO offices to monitor whether companies are meeting their obligations to contribute to the fund.

BAL Analysis: The Bangalore regional FRRO has begun asking foreign nationals for documentary proof of retirement contributions, and other regional offices are expected to follow. Employers should be ready to furnish proof of contributions before renewing employment visas.

This alert has been provided by the BAL Global Practice group and our network provider located in India. For additional information, please contact your BAL attorney.

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