India to sign SSA before Indians working abroad are 'international workers': EPFO

NEW DELHI: Finally, there is clarity on who is an 'international worker' in the eyes of the Employees Provident Fund Organisation (EPFO). An Indian employee working abroad will be treated as an international worker by the organisation only if India has signed a social security agreement (SSA) with the country where he works.

Three months after the government brought international workers under the EPFO ambit, the organisation has cleared the confusion over identifying them by answering 'frequently asked queries' (FAQs) related to international workers.

Effective November 1, 2008, Indian firms employing international workers are supposed to deduct 12% of their basic pay and deposit it with the EPFO along with the employer's matching contribution.

Though there was little doubt that all foreign workers employed in the country by organisations under EPFO make it to the category, the industry has been much troubled over identifying the Indian employees who are to be treated as international workers. Now, as per the explanation provided through FAQs by the EPFO, an Indian going abroad does not become an international worker till the Indian government signs an SSA with that country.

A social security agreement is a recipro-cal arrangement that prevents double payment to social security systems of the two countries. When a country signs an SSA with India, the workers from that country automatically become excluded workers un-der the EPFO and are spared from making contributions. Similarly, Indi-ans working in that country are also exempted from contributing to their social security system if they are already making payments to EPFO at home.

Though India has signed social agreements with only three countries till date - Belgium, France and Germany. even these are not effective as they await ratification by the respective countries. This means that all those Indians working in these countries will also not be treated as International workers for the time being.