Kumar 06 August 2023

Pf transfer getting rejected due to non contribution during onsite deputaion

Hello All,

I am looking for an advise for a problem which I am going through related to my PF transfer currently.

My PF transfer is getting rejected by EPFO due to non contribution of PF component to my PF account during my onsite deputation, employer to clarify. My previous organization has already clarified through a NCP clarification letter. They have mentioned, employee was on long term onsite deputation and transferred to onsite entity company (its a MNC, so was transferred to onsite entity(USA) of the same company). My payroll was handled there only, all deduction like social security, income tax every thing was deducted from my onsite salary only. As there was no salary paid in India, there was no contribution to PF.

I am sure, my case is not unique. In IT organization, people travel from India to abroad for several years and they come back to their base company once the assignment is over or visa is expired. In case of long term assignments, company do not pay India salary, hence no Basic salary and hence no PF contribution.

Indian companies pay to employees during their onsite tenure in case of short term only.

Please advise what is the solution.

Thanks!
Kumar

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2 Replies

P. Venu (Advocate) 06 August 2023

You can escalate the issue by approaching higher authorities or approaching the Court, if need be. For more informed debate, you may post the query at citehr,com

T. Kalaiselvan, Advocate (Advocate) 06 August 2023

Under the provisions of All India Services (Profident fund) rules, 1955:

Section 7. Transfer to foreign service or deputation out of India.—When a subscriber is transferred to foreign service or sent on deputation out of India, he shall continue to be subject to the rules of the Fund in the same manner as if he was not so transferred or sent on deputation.

8. Realisation of subscripttion.—

8(1) When emoluments are drawn from treasury in India, subscripttions on account of such emoluments and the principal and interest of advances if any, shall be deducted from the emoluments; but when emoluments are drawn from any other source, the subscriber shall forward his dues monthly to the Accounts Officer. Provided that in the case of subscribers on deputation to a body corporate owned or controlled by Government, the subscripttions shall be recovered and forwarded to the Accounts Officer by such body.

8(2) If a subscriber fails to subscribe with effect from the date on which he joined the Fund or is in default in any month or months during the course of a year otherwise than as provided in rule 6, the total amount due to Fund on account of arrears of subscripttion shall with interest thereon at the rate provided in rule 9, forthwith be paid by the subscriber to the Fund or in default be ordered by the Account Officer to be recovered by deduction from the emoluments of the subscriber by instalments or otherwise as may be directed by the Government:

Provided that subscribers whose deposits in the Fund carry no interest shall not be required to pay any interest.

You can give a complaint to the PF commissioner about this neglgent attitude of your employer citing the above rules.

In cases where an employee is sent to a group company outside India on arrangements such as deputation, secondment or a short-term assignment, the employer-employee relationship with the Indian employer typically remains intact. In a scenario where an outbound employee continues to receive salary in home country (India), then he/she would be under an obligation to continue the social security contributions in India. However, in such cases the employees may also be required to start contributing to the social security schemes in the host country resulting in dual contribution.