In a landmark judgment delivered late on 5 November 2025, the Delhi High Court ruled that every foreign national working for an Indian-registered employer must be enrolled in the Employees’ Provident Fund Organisation (EPFO) and make social-security contributions from day one of employment.
The bench of Chief Justice Devendra K. Upadhyaya and Justice Tushar Rao Gedela dismissed petitions filed by several multinationals (including SpiceJet and LG Electronics India) that had argued international staff should be exempt because of the short-term nature of typical foreign assignments. The Court held that the 2008 and 2010 “international worker” amendments to the EPF Act were constitutionally valid and that India’s social-security laws could not discriminate between domestic and foreign workers.
![Delhi HC mandates EPFO coverage for all expatriate employees in India]()
Practically, the ruling obliges Indian entities—whether subsidiaries, joint ventures or liaison offices—to deduct 12 per cent of an expatriate’s ‘eligible salary’ and deposit an equal employer contribution of 12 per cent into the employee’s PF account each month. International workers will be allowed to withdraw their balances only on retirement at age 58, permanent total disability, or on permanent departure from India where a bilateral social-security agreement (SSA) exists.
Legal advisers say the decision may raise assignment costs by 20-25 per cent for companies without SSAs (for example, with the United States or the United Kingdom) because the employer’s contribution is not creditable in the home country. Firms are scrambling to review global-mobility budgets, secondment contracts and tax-equalisation policies.
Multinationals with short-cycle projects—IT services, aviation, infrastructure and energy—face the biggest compliance burden. Many are expected to appeal to the Supreme Court, but experts caution that enforcement notices from EPFO field offices could begin immediately. Employers are therefore advised to (1) audit whether all foreign staff are registered, (2) calculate retrospective liabilities going back five years, and (3) update assignment letters to reflect mandatory PF deductions.
The bench of Chief Justice Devendra K. Upadhyaya and Justice Tushar Rao Gedela dismissed petitions filed by several multinationals (including SpiceJet and LG Electronics India) that had argued international staff should be exempt because of the short-term nature of typical foreign assignments. The Court held that the 2008 and 2010 “international worker” amendments to the EPF Act were constitutionally valid and that India’s social-security laws could not discriminate between domestic and foreign workers.
Practically, the ruling obliges Indian entities—whether subsidiaries, joint ventures or liaison offices—to deduct 12 per cent of an expatriate’s ‘eligible salary’ and deposit an equal employer contribution of 12 per cent into the employee’s PF account each month. International workers will be allowed to withdraw their balances only on retirement at age 58, permanent total disability, or on permanent departure from India where a bilateral social-security agreement (SSA) exists.
Legal advisers say the decision may raise assignment costs by 20-25 per cent for companies without SSAs (for example, with the United States or the United Kingdom) because the employer’s contribution is not creditable in the home country. Firms are scrambling to review global-mobility budgets, secondment contracts and tax-equalisation policies.
Multinationals with short-cycle projects—IT services, aviation, infrastructure and energy—face the biggest compliance burden. Many are expected to appeal to the Supreme Court, but experts caution that enforcement notices from EPFO field offices could begin immediately. Employers are therefore advised to (1) audit whether all foreign staff are registered, (2) calculate retrospective liabilities going back five years, and (3) update assignment letters to reflect mandatory PF deductions.
