Labour Welfare Fund

Labour welfare is an aid in the form of money or necessities for those in need. It provides facilities to labourers in order to improve their working conditions, provide social security, and raise their standard of living.

Labour welfare fund is a statutory contribution managed by individual state authorities. The state labour welfare board determines the amount and frequency of the contribution. The contribution and periodicity of remittance differ from every state.

The scope of this Act is extended to housing, family care & worker’s health service by providing medical examination, a clinic for general treatment, infant welfare, women’s general education, workers activity facilities, marriage, education, funeral, etc. State-specific Labour Welfare Funds are funded by contributions from the employer, employee and in few states, the government also.

In order to provide social security to workers, the government has introduced the Labour Welfare Fund Act. This act has been implemented only in 15 states out of 34 states including union territories.

Below the states in which the Act has been implemented and not implemented, are listed

Applicable States

• Andhra Pradesh
• Chandigarh
• Chhattisgarh
• Delhi
• Goa
• Gujarat
• Haryana
• Karnataka
• Kerala
• Madhya Pradesh
• Maharashtra
• Odisha
• Punjab
• Tamil Nadu
• Telangana
• West Bengal

Not Applicable States

• Central
• Andaman and Nicobar Islands
• Arunachal Pradesh
• Assam
• Bihar
• Dadra and Nagar Haveli
• Daman and Diu
• Himachal Pradesh
• Jammu and Kashmir
• Jharkhand
• Lakshadweep
• Manipur
• Meghalaya
• Mizoram
• Nagaland
• Pondicherry
• Rajasthan
• Sikkim
• Tripura
• Uttar Pradesh
• Uttaranchal

The Labour Welfare Fund Act is not applicable to all categories of employees working in the establishment. It depends upon the wages earned and the designation of the employee.

Contribution

The contribution of the Labour Welfare Fund may be made annually, half-yearly, or monthly. The frequency may differ depending upon the state-specific Act.

In general the money in the Fund may be utilized by the Board to defray expenditure on the following:

• Educational facilities for the children of the workers as well as medical facilities for both private and public-sector employers.
• Transport facilities to the workers for commuting to work.
• Recreational facilities in form of music, dance, drama, games, sports, paintings, etc. are usually offered to the employees to build a wholesome working environment.
• Housing facilities under this scheme offer loans to industrial workers for constructing houses at concessional rates.
• Home industries and subsidiary occupations for women and unemployed persons.
• Reading rooms and libraries, Vocational training, and Nutritious food to children of employees.

Applicable Contribution

As of now only selected states and union territories in India administers Labour Welfare Fund (LWF). The following state/UTs follow LWF.

State or Union Territory	Contribution Frequency	Contribution Month(s)	Employee Contribution	Employeer Contribution	Total Contribution	Return	Due Date
Karnataka	Annual	Dec	20	40	60	Form D	15-Jan
Tamil Nadu	Annual	Dec	10	20	30	Form A	31-Jan
Andhra Pradesh	Annual	Dec	30	70	100	Form F	31-Jan
Kerala (For firms under Shops and Establishment Act)	Monthly	Jan-Dec	20	20	40	Form A	20th
Kerala (For firms under Factories Act)	Half Yearly	Jan-Dec	4	8	12	Form A	20th
Maharashtra	Half Yearly	June, Dec	06-Dec	18/36	24/48	Form A1cum Return	15 Jul, 15-Jan
Goa	Annual	Dec	120	360	480	Form B	31-Jan, 15 Jul
Delhi	Half Yearly	June, Dec	0.75	2.25	3	Form A	15-Jan
Punjab	Monthly	Apr-Mar	5	20	25	Nil	15 Oct, 15-Apr
Chandigarh (Union Territory)	Monthly	Apr-Mar	5	20	25	Nil	15 Oct, 15-Apr
Haryana	Monthly	Jan-Dec	10	20	30	Nil	31-Dec
Madhya Pradesh	Half Yearly	June, Dec	10	30	40	Nil	15 Jul, 15-Jan
Chhattisgarh	Half Yearly	June, Dec	15	45	60	Form A	31 Jul, 31 Jan
Gujarat	Half Yearly	June, Dec	6	12	18	Form A1	31 Jul, 31 Jan
West Bengal	Half Yearly	June, Dec	3	6	9	Form D	15 Jul, 15-Jan
Puducherry	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable	Not Applicable
Telangana	Not Applicable	December	2	5	7	Not Applicable	31 Dec – Date of deduction 31 Jan – Last date for submission
Odisha	Not Applicable	June December	20	40	60	Not Applicable	30 June and 31 Dec – Date of deduction 15 July and 15 Jan – Last date for submission

The Payment of Wages (Amendment) Bill, 2017

The Payment of Wages (Amendment) Bill, 2017 was introduced in Lok Sabha on February 3, 2017 by the Minister of Labour and Employment, Mr. Bandaru Dattatreya. The Bill amends the Payment of Wages Act, 1936. The Bill replaces the Payment of Wages Ordinance, 2016 which was promulgated on December 28, 2016.

• Method of payment of wages: Under the 1936 Act, all wages must be paid either in coin or currency notes, or both.
• The Bill amends the 1936 Act to permit the employer to pay an employee’s wages: (i) in coin or currency notes; or (ii) by cheque; or (iii) by crediting them into his bank account.

Wages

The Ministry of Law and Justice (Legislative Department) vide its Notification dated 16th February, 2017/Magha 27, 1938 (Saka) pursuant to receiving of the assent of the President published for general information the Payment of Wages (Amendment) Act, 2017 to amend the Payment of Wages Act, 1936 (the ‘Act’).

The Act applies in the first instance to the payment of wages to persons employed in any factory, to persons employed upon any railway by a railway administration or, either directly or through a sub-contractor, and to persons employed in an industrial or other establishment specified in sub-clauses (a) to (g) of clause (ii) of section 2.

All wages shall be paid in current coin or currency notes or by cheque or by crediting the wages in the bank account of the employee:

Provided that the appropriate Government may, by notification in the Official Gazette, specify the industrial or other establishments, the employer of which shall pay to every person employed in such industrial or another establishment, the wages only by cheque or by crediting the wages in his bank account.”

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