Employees’ Provident Fund (Third Amendment) Scheme 2008; and Employees’ Pension (Third Amendment) Scheme 2008 : Notification No. F.No. S-35012/05/2008. SS-II dated 1-10-2008.

The Ministry of Labour and Employment, Government of India
has cleared the abovementioned scheme which modifies the Employees’ Provident
Fund Scheme, 1952. This scheme has enlarged the applicability to all non-Indians
employed in India and all Indians employed abroad.

A new category has been introduced of an ‘International
Worker’, defined to mean an Indian employee who has worked/or going to work in a
foreign country with which India has a social security agreement on reciprocal
basis. This is with the condition that the employee is eligible under the social
security agreement. International Worker also includes an employee, other than
an Indian employee, holding other than an Indian passport and working for an
establishment in India to which the PF Act applies. This scheme is however not
applicable to International Workers who is contributing to the Social Security
Schemes of his country of origin viz. Belgium, France and Germany with
whom, India has signed Social Security Agreements or Totalisation Agreements
thereby enjoying the status of a detached worker. This scheme is also applicable
to International Workers who are employed by third parties. These changes will
result in additional financial burden of 12% of base pay (8.33% towards
Provident Fund and 3.67% towards Pension Scheme) on the employees and a similar
amount (i.e. 12% of base pay) on the employer. Employers have to incur
additional compliance cost by way of filing returns with the Indian authorities
on a regular basis. This amendment would be effective once notified in the
gazette.