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Exclusion of Provident fund (PF) deduction on Foreign Employees

Exclusion of Provident fund (PF) deduction on Foreign Employees

22 May, 2024

Recently, Karnataka High court has struck down the provisions of inclusion of International

workers under the purview of PF.

Hon’ble High court ruling states that such provisions are “unconstitutional & arbitrary”.

The ruling stated that requiring an Indian employee working abroad to contribute Rs 15,000

towards PF, while mandating a foreign worker to contribute based on their entire salary, is

deemed "discriminatory" and contravenes Article 14 of the Constitution.

This ruling is going to impact thousands of expatriates who have contributed to PF.

Impact of Ruling on International workers arrangement in India

1) Foreign workers may no longer be liable to contribute to PF providing relief to them

2) There may be change in employment agreements & contacts between Companies & foreign workers

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