This presentation takes you through the analysis of various Labour Welfare Fund Rules in India. There are 16 States and Union Territories which have enacted or adopted the Labour Welfare Fund Act and corresponding Rules. These legislations aim to provide for a Board titled “State Labour Welfare Fund Board” with a fund titled “Labour Welfare Fund”. The important duties of this fund are to grant allowance for pension, maternity, marriage, treatment, education, death etc., to labourers in respective States.

1. 1
Your Legal Team
Labour Welfare Fund
Rules
Table of Content
1. Overview of Legislation
2. Compliance
3. Maintenance of Records
4. Typical Issues
5. Overview of Penalties
6. What to diligence in DD

2. 2
Your Legal Team
1. Overview of Legislation
Applicable to any establishment doing business (society, trust, shop, commercial
establishment, factory etc.) with minimum number of employees per below table:
State / UT Minimum
Employees
Andaman and Nicobar Island, Dadra and Nagar Haveli,
Lakshadweep, Puduchery, Arunachal Pradesh, Assam, Bihar,
Himachal Pradesh, Jammu and Kashmir, Jharkhand, Manipur,
Maghalaya, Mizoram, Nagaland, Rajasthan, Sikkim, Tripura,
Uttar Pradesh, Uttarakhand
Not Applicable
Madhya Pradesh and Chhattisgarh (Minimum INR 1500 per 6
months)
One (1)
Kerala (applicable to Self-employed) Two (2)
Delhi, Daman & Diu, Gujarat, Goa, Maharashtra Five (5)
Haryana & West Bengal Ten (10)
Chandigarh, Punjab, Orissa, Andhra Pradesh and Telangana Twenty (20)
Karnataka Fifty (50)

3. 3
Your Legal Team
1. Overview of Legislation
 Definition of ‘Employee’ under Labour Welfare Fund Act
State Exclusion of
Managerial
Designation
Exclusion of workers in
Supervisory Capacity
drawing Wages above INR
Karnataka, Punjab, Haryana
and Chandigarh
No No
Orissa, AP and Telangana Yes No
Goa, Daman & Diu, West
Bengal
Yes 1,600
Delhi, Gujarat, Maharashtra Yes 3,500
Madhya Pradesh &
Chhattisgarh
Yes 10,000
Tamil Nadu Yes 15,000

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Your Legal Team
1. Overview of Legislation
 Presently 13 States and 3 Union Territories have enacted their respective Labour
Welfare Fund Acts and corresponding Rules
 State grants allowance for pension, maternity, marriage, treatment, education,
death etc. which can be availed by labourers
 Unpaid Accumulation is defined as any wages, bonus, gratuity etc., which has not
been paid within a period of three years but excludes compensation or statutory
contribution
 Contribution is required to be paid even in respect of contract workers in some
States like Haryana

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Your Legal Team
2. Compliances
Payment of Contribution will be per below due dates and filing of a return
State Due date for payment
of contribution
Return
Karnataka Annual – January 15th Form-D
Andhra Pradesh, Haryana
Tamil Nadu, & Telangana
Annual – January 31st
Delhi, Kerala, West Bengal,
Maharashtra
Half Yearly – July 15th &
January 15th
Maharashtra- Form A1
WB- Notice of Opening
Form A
Goa, Daman & Diu, Gujarat,
Chhattisgarh & M.P.
Half Yearly – July 31st &
January 31st
Gujarat- Form A1
Punjab & Chandigarh Half Yearly – October 15th
& April 15th
All States – Unpaid
accumulation and fines
April 30th, July 30th,
October 30th & January
30th

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Your Legal Team
3. Maintenance of Records
 No need of Registers in case records under Payment of Wages is Maintained
 Below table provides the amount of contribution payable by Employer (ER) and
Employee (EE) in Indian National Rupees (INR per half yearly or annual periodicity)
State/UT EE ER TOT State/UT EE ER TOT
Delhi 0.75 2.25 3 West Bengal 3 5 18
Punjab &
Chandigarh
5 20 25 Andhra Pradesh 30 70 100
Haryana 25 50 75 Telangana 2 5 7
Madhya Pradesh 10 30 40 Chhattisgarh 15 45 60
Karnataka 20 40 60 Tamil Nadu &
Odisha
10 20 30
Gujarat 6 12 18 Maharashtra 12 36 48
Goa, Daman & Diu 60 180 240 Kerala 20 20 40

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Your Legal Team
4. Typical Issues
 Quarterly Return with unpaid accumulation and fines realized not relevant due to
non-realization
 Exemption for managers, supervisors drawing above INR 3,500 per month
 Payment of contribution is made but return is not filed
 Unlike PT, payment for whole State at one place in States such as Kerala and
Tamil Nadu

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Your Legal Team
5. Overview of Penalties
 Failure to pay contribution is punishable with a fine or penalty at 1% to 2% interest
per month in respect of the amount due
 All the States except Punjab have a general penalty, which is punishment with
imprisonment up to 3 months or fine up to INR 500 (Five Hundred Indian Rupees
only).
 Punjab, Haryana and Chandigarh have only penalty of INR 5000 (Five Thousand
Rupees only)

9. 9
Your Legal Team
6. What to diligence in DD
 Check annual returns filed by the company
 Check previous years dues and if company is above 3 years old, ask if any bonus
or payment of salary or arrears remain unpaid (Example: Bonus payable for 2014-
15 is to be paid retrospectively in 2015-16 even if employee has left job in 2014-15
after working for one month)
 Please ask for fines policy (Example: If in case of late coming for more than 3 days,
amount deducted for half day is remitted to Government every quarter)

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Your Legal Team
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