With the introduction of stringent regulation on refund of social security contribution, it is expected that there will be greater pressure on the countries that have a significant number of foreign nationals working in India to enter into bilateral agreements.

The world is divided with regard to the approach and process that different countries follow towards social security contributions. With the increased pace of liberalization and globalization, a substantial number of Indian employees go abroad for employment. This leads to instances of either double social security coverage or no coverage for the affected employees. Double coverage increases the cost of international assignments, and no coverage creates contribution gaps that ultimately result in reduction of social security benefits.

The solution to this problem lies in signing bilateral Social Security Agreements (SSAs). These agreements facilitate avoidance of dual coverage, totalization of contribution periods for determining eligibility of benefits and exportability of benefits to the home country.

The Ministry of Labor and Employment issued a notification and further amended the Employees' Provident Fund Scheme and Employees' Pension Scheme vis-à-vis International Workers. The amendment is effective from September 11, 2010. With the introduction of new stringent regulation on refund of social security contribution, it is expected that there will be greater pressure on the countries that have a significant number of foreign nationals working in India to enter into bilateral agreements.

The Analyst Magazine, Social Security, Globalization, Social Security Agreements, International Workers, Bilateral Agreements, International Labor Organization, Economic Security, Social Insurance, Indian Labor Market, Provident Fund Scheme, Social Security Systems, Social Security Laws.