Labour Welfare Fund (LWF)

Labour Welfare Fund
Labour welfare fund is a statutory contribution managed by individual state authorities. The state labor welfare board determines the amount and frequency of the contribution. The contribution and periodicity of remittance differ with every state. In some states, the periodicity is annual (Andhra Pradesh, Haryana, Karnataka, Tamil Nadu etc) and in some states, it is to be contributed during the month of June & December (Gujarat, Madhya Pradesh, Maharashtra etc).

The Scope of Labour Welfare Fund Act

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.

Applicability of the Act

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.
The below table depicts the states in which the Act has been implemented and not implemented:
The Labour Welfare Fund Act is not applicable to all category of employees working in the establishment. It depends upon the wages earned and designation of the employee. Also, one needs to check the total number of employees working before extending this Act to their establishment. The applicability of the Act based on the number of employees may differ depending upon state specific

The Chhattisgarh Shram Kalyan Nidhi Adhiniyam, 1982
The Chhattisgarh Pradesh Shram Kalyan Nidhi Rules, 1984
Any Employer/Establishment employing one or more employees/persons
Half Yearly

Labour Welfare Fund Expenditure-:

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.
  • Medical facilities for both private and public-sector employers to facilitate medical facilities for their workers and their families.
  • 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.
  • Excursions, tours and holiday homes.
  • Home industries and subsidiary occupations for women and unemployed persons.
  • Reading rooms and libraries.
  • Vocational training.
  • · Nutritious food to children of employees.
Labour Welfare Fund Contribution
Date Of 
Last Date For 

All employees except those working in managerial or administrative capacity or employed in a supervisory capacity drawing wages exceeding ten thousand per month
30th June
15th July

All employees except those working in managerial or administrative capacity or employed in a supervisory capacity drawing wages exceeding ten thousand per month
31st December
15th January

Dues and Penalty

Any person who is convicted of contravening any of the provision under this act or rules made under it or who obstructs the inspector deliberately in discharging his duties under the act or rules or fails to produce any material necessary for inspection like register of records and documents can be imposed a fine which may extend up to five thousand rupees but, not less than two thousand rupees for committing the offence for the very first time. In case of subsequent or second time offence, he/she can be punished with an imprisonment that may extend to three months or fine extending up to ten thousand rupees while nothing less than three thousand.

The offence under this Act cannot be tried by any court inferior than that of a 1st class Judicial Magistrate and cognizance can be taken only by the complaint of an inspector.