Labour welfare fund

What is the Labour Welfare Fund and what are its benefits?

Introduction

The Labour Welfare Fund is an initiative by the Government of India to extend a measure of social assistance to employees in the unorganized sector.  It is a kind of financial assistance for workers to improve their working conditions and standard of living.

Out of the 36 states and Union Territories, only 16 States/UTs have so far implemented this Act. As per the Act, the employees and employers contribute towards this Fund, and in some states, the state also contributes.  Since the Fund is managed by independent states, the rules vary from one state to another.  Any business/industry that satisfies the criteria of number of employees required by the Act to come under its purview has to register with the concerned Labour Department of the state.

Eligibility

In Tamil Nadu, if a company has 5 or more employees on its payroll then it has to register with the Labour Department.  In Kerala, it is 2 or more employees and in Gujarat, it is 10 or more employees. Each State/UT has its own rules to become eligible for registration.

The Act is not applicable to all categories of employees, and depends on the wages earned and the designation of the employees.  Those employees who are in the managerial or supervisory position and drawing salary that is more than what is stipulated in the Act are not eligible for the Fund.  This will vary from state to state.

States/UTs that have implemented the LWF Act

The following States and Union Territories have implemented the Labour Welfare Fund Act:

  1. Andhra Pradesh
  2. Chandigarh
  3. Chattisgarh
  4. Delhi
  5. Goa
  6. Gujarat
  7. Haryana
  8. Karnataka
  9. Kerala
  10. Maharashtra
  11. Madhya Pradesh
  12. Odisha
  13. Punjab.
  14. Tamil Nadu
  15. Telengana
  16. West Bengal.

States/UTs that have not implemented the LWF Act

The following States and Union Territories have not implemented the Labour Welfare Fund Act:

  1. Andaman & Nicobar Islands
  2. Arunachal Pradesh
  3. Assam
  4. Bihar
  5. Dadra and Nagar Haveli
  6. Daman and Diu
  7. Himachal Pradesh
  8. Jammu and Kashmir
  9. Jharkhand
  10. Lakshadweep
  11. Manipur
  12. Megalaya
  13. Mizoram
  14. Nagaland
  15. Pondicherry
  16. Rajasthan
  17. Sikkim
  18. Tripura
  19. Uttar Pradesh

Amount of Contribution

The amount of contribution also varies from state to state.  The following table provides details of the contribution period, contribution amount and due dates for remittance of the contribution.

State/UT Contribution regularity Contribution Months Employee Contribution Employer Contribution Contribution Total Return & Due Date
Andhra Pradesh Annual December 30 70 100 Form F

Jan 31

Chandigarh Monthly April-March 5 20 25 Nil

Oct.15

Apr.15

Chattisgarh Half-Yearly June- Dec. 15 45 60 Form A

31 July

31 Jan

Delhi Half-Yearly June-Dec. 0.75 2.25 6 Form A

15 July

15 Jan.

Goa Half-Yearly June-Dec 60 180 240 Form A

31 July

31 Jan.

Gujarat Half-Yearly June-Dec 6 12 18 Form A1

31 July

31 Jan.

Haryana Monthly Jan – Dec 31 62 93 Nil

31 Dec

Karnataka Annual December 20 40 60 Form D

15 Jan.

Kerala Half-Yearly June-Dec 4 12 16 Form A

15 July

15 Jan

Maharastra Half-Yearly June-Dec 6/12 18/36 24/48 Form A1

15 July

15 Jan

Madhya Pradesh Half-Yearly June-Dec 10 30 40 Nil

15 July

15 Jan

Odisha Half-Yearly June-Dec 20 40 60 Form F

15 July

15 Jan

Punjab Monthly April-March 5 20 25 Nil

15 Oct

15 April

Tamil Nadu Annual December 20 40 60 Form D

15 Jan

Telengana Annual December 2 5 7 Form F

31 Jan

West Bengal Half-Yearly June-Dec 3 15 18 Form D

15 July

15 Jan.

How is the Labour Welfare Fund utilized?

The Labour Welfare Fund is utilized by the Labour Welfare Board to cover the following activities.

  • To provide Libraries
  • For Vocational Training
  • To provide adequate nutrition to children
  • Towards transport facilities
  • For the education of children, through scholarships
  • To provide Medical facilities for employees and dependents
  • To provide entertainment facilities to the employees – sports, art forms, music
  • To provide vacation facilities for employees and their families
  • For providing subsidiary occupation for women and unemployed persons.
  • To provide assistance for Natural and Accidental Death. In Tamilnadu an Accidental death Assistance of  ₹ 1,00,000 and  ₹5,000 towards funeral expenses is provided.  When death is natural, a sum of   ₹25,000/- assistance along with ₹5,000 towards funeral expenses is provided.

Conclusion

The Labour Welfare Fund Act is an important legislation to protect the interests of the workers, especially in the unorganized sector. However, only 16 states and UTs have so far implemented the Act. Though it has not been implemented in all the States and Union Territories in the country, many states and UTs are in the process of implementing them shortly.

GetifyHR is rightly placed to provide a perfect solution to companies that need to streamline their Payroll and be compliant with all the statutory requirements. As one of the top outsourcers of Payroll processing and HR Management, we have been providing exemplary service to our clients across the country. Our outsourcing module can seamlessly handle all aspects of Payroll processing with a high degree of accuracy enabling stress-free operations month over month. In the process, it also handles all the statutory requirements so that the company is compliant always.

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