What is Labour Welfare Fund?
Labour Welfare Fund is aimed to provide medical care, housing facilities, and educational and recreational facilities to labourers and their dependent family members. It is financial support for those who need it. It also works to improve working conditions, the standard of living and social security for the workers.
The Labour welfare fund act was introduced in 1953 by the government of India and administered by the Labour Ministry of Government of India. The act is currently implemented in 16 states of India. Under this act, both the employer and employee need to contribute a certain amount towards the welfare of the employee.
Also Read: Importance Of Employee Mental Welfare
Objectives of the Labour Welfare Fund
- Providing welfare to the workers employed in the industrial establishment
- Administering schemes to improve standards of living for all workers
Scope of Labour Welfare Fund
The government of India introduced the labour welfare fund act 1953, and it applies to all businesses with a minimum 5 number of employees. The contribution rate is likely to vary a little according to the laws of respective states. The labour welfare fund act is now implemented in 16 states of India.
The labour welfare fund act is applicable to the employees in the organization depending on their designation and wages. The implementation and the skims of the labour welfare fund may differ from state to state.
Benefits of Labour Welfare Fund
There are various schemes that are provided by the labour welfare board for the welfare of the labourer and their dependents. Here is a general idea about the support that is provided by the labour welfare board for the employees.
Efforts to Improve Work Conditions
The poor working conditions in an unorganized sector have always been a matter of concern. That made it the primary focus when it comes to making a scheme that can benefit employees under the labour welfare fund act.
Below are the initiatives from the government for improving the working conditions.
The facilities like such as transport to and from work, reading room and libraries for workers Vocational training, recreational activities at the workplace for workers.
Outdoor activities such as excursions and tours under the schemes
Efforts towards Improving Standard of Living
- There are many initiatives taken to improve the standard of living of the workers who provide labour in an unorganised sector. Some of these welfare schemes are listed below
- Educational facilities and scholarships for the children of the workers
- Nutritious food in the form of mid-day meals in the schools and for the kids to make them enjoy school
- The labour worker’s kids who are meritorious and score above a particular percentage in their class 10th and 12th board exams
- Some scholarships are reserved for children who want to pursue MBBS
- Housing schemes that provide concessional rates to own a house for the labourer’s
- Workers, especially in construction industries, workers get special concessions for housing loan applications.
- Medical services for labour workers and their families employed in both the public and private sector
Efforts to Provide Social Security
Through the labour welfare fund act government provides social security in various forms as medical treatment camps. Women and unemployed people in sub-subsidiary occupations can also get medical facilities with help of Labour welfare fund. The fund also helps workers in unorganised sectors to get higher wages for their labour. There are also other schemes that are provided for workers in different industries.
Also Read: How to claim PF Online? Step by Step Guide
How to Calculate the Labour Welfare Fund Deductions?
The schemes under the labour welfare fund are managed by the states and respective union territories, the rules are different for the calculation. The companies with operations and offices in multiple states have to keep in mind the respective set of rules to calculate the required contribution. Here we bring together the various rules by the individual states to calculate the contribution.
Rules for Labour Welfare Fund in Maharashtra
The labour welfare fund laws in Maharashtra is applicable to all organization with minimum 5 employees working for them.
The law is applicable if the company is registered in the state of Maharashtra
The labour welfare fund scheme is applicable to any company registered in Maharashtra, having 5 or more employees in the company.
The contribution has to be done bi-annually and should be deducted from the salary of the employee for the month of June and December.
Contribution for the first six months of the year has to be done from 30th June to 15th July
Similarly, the contribution for the second half of the year is to be done from 30th December to 15th January.
There are two separate slabs for the contribution and the exception is for those who are working in a managerial capacity
the employee earning less than ₹ 3000 has to contribute ₹ 6 from their salary and their employer contributes thrice that amount (₹18) that result in the total amount of ₹24
For employees earning more than ₹3000 the contribution is ₹12. The employer has to contribute thrice that amount (₹36) resulting in a total of ₹48 in the contribution twice a year.
Penalties for Non-compliance
The fine of ₹500 and/or imprisonment can be extended up to 3 months
The fine is up to ₹1000 and/or imprisonment up to 6 months in case of repeated offence. If only a fine has to be given it cannot be lesser than ₹50.
Rules for Labour welfare fund in Andhra Pradesh
A company that is registered in the state of Andhra Pradesh and employs 20 or more people, should register for the scheme. The contribution needs to be done annually, before the 15th of January (of the next year).
The rules are applicable for companies registered in Andhra Pradesh
The contribution has to be made by all the organizations with 20 or more employees
The labour welfare fund contribution has to be done once a year
the contribution for all employees except those who are working in managerial positions or have salary higher than ₹1600 is ₹30
The employer contribution in the labour welfare fund is ₹70
Penalties for Non-compliance
There is provision for fine of ₹500 and/or imprisonment that can be extended to 3 months period
On further violation of the rules for the labour welfare fund the imprisonment is extendable to 6 months and/or fine up to ₹1000.
If the punishment is only fine it cannot be less than ₹50
Gujarat and its LWF rules
The contribution under the Gujarat’s LFT is applicable to the organizations registered in the state of Gujarat
this is a bi-annual contribution for applicable organizations at the end of month of June and December
the first contribution has to be done between 30th June to 15th July, the second contribution to be done from 30th December to 15th January
The contribution amount is deducted from employees salary of June and December every year
For every employee the contribution is ₹6 and employer contribution is Twice that amount which is ₹12 therefore the total amount of contribution becomes ₹18.
Penalties for Non-compliance
The punishment of the fine for a person cannot be less than ₹20000
When the offence is consistent then the daily fine cannot be less than ₹1000
Kerala
the rules under the labour welfare fund are applicable to the any organization registered in state with minimum two employees.
The contribution for the labour welfare fund has to be made every month and it should be paid before 5th of next month
Contribution for employee is ₹4 and the contribution by the employer is ₹8 for every month
There are exception for the contribution including those who are working in managerial capacity, apprentice or part-time workers
Penalty for the violation of rules
In case of obstructing the inspector while he exercises his duties
Imprisonment of term up to 6 month and/or fine of ₹500 can be the punishment for case of obstructing the inspector while exercising their duties.
Tamil Nadu
Applicable to the organizations registered in the state with 5 or more employees
The payment has to be made once a year at the beginning of next year before 31st of January
the contribution for all employees is ₹10 and contribution by the employer has to be ₹20
The employees for whom contribution need not to be made are those who are working in managerial capacity or earn more than ₹ 15000
Penalties
For the first time offence imprisonment can be extended to period of 3 months and/or fine up to ₹500
for the second and subsequent offence of the labour welfare fund rules imprisonment that can be extendedupto 6 months and /or fine may extend to ₹10000
In case where the person has to pay only fine it can not be lower than ₹50
West Bengal
Applicable to the companies registered in West Bengal with 10 or more employees
the contribution has to be made twice a year. The 1st is made from 30th of June to 15th of July and the second contribution is between 30th of December to 15th of January
Contribution for all employees is ₹ 3 and payment by the employer is ₹ 15
Exception is made for those in a managerial capacity or earn wages more than ₹ 1600
Penalties
Imprisonment for a term that can be extendable to 3 months and/or a fine that can be extendable to ₹ 500
For repeated offences, the imprisonment can be extended up to 6 months and/or a fine which may extend up to ₹1000
When only fine has to be paid by the offender it cannot be less than ₹50
Karnataka
applicable to companies registered in Karnataka with 50 or more employee
Contributions for the scheme has to be made annually, before the 15th January
Payment for all employees is ₹20 and for employer ₹40 resulting total of $60
Penalties
The imprisonment for a term up to 3 months and/or a fine up to ₹500
For repeated offences fine can extend to ₹1000 and imprisonment can go up to 6 months
If only fine payable by the person it can not be lower than ₹50
Delhi’s
Companies registred in Delhi with five employees need to follow LWF
The contributions has to be made twice every year on 30th June and 31st December for employee share and employer share can be submitted up to 15th of respective next month
Cntribution for all employees has to be ₹0.75 and of employer ₹2.25
Those who are working in managerial capacity or earns more than ₹2500 don’t need to make the contribution
The contribution of Delhi government is twice the contribution for employee (₹1.50)
Haryana
Applicable to the companies registered in the state of Haryana
- The employee is ₹ 0.2% of the salary or any remuneration subject to a limit of ₹25
- The employer contribution is twice the amount contributed by employees
