What are the Labour Welfare Fund Contributions and

Benefits [The Ultimate Guide]

 Post author:Shayanne Hill
 Post published:May 24, 2021
 Post category:Payroll
 Reading time:14 mins read

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Labour welfare Fund (LWF) is a statutory contribution that state authorities manage
individually. This contribution is carried out for the benefit of workers and labourers in the
unorganized sector. If you are running your company’s payroll, you need to understand the
different aspects of the LWF and how it applies to you.

In this blog, I have written in detail about how you can calculate and contribute to the LWF. I
have covered the following points

 What is the Labour Welfare Fund act?

 What are the common benefits of the Labour Welfare Fund (across states)?
 Who contributes to the LWF and how do you contribute?
 State-wise applicability of the Labour Welfare Fund
 How should you calculate the Labour Welfare Fund deduction in different states?
o LWF rules in Maharashtra
o Kerala and its rules pertaining to the LWF
o Labour Welfare Fund regulations in Tamil Nadu
o Gujarat and its LWF rules
o Karnataka’s rules w.r.t. the LWF scheme
o LWF regulations in West Bengal
o Delhi’s rules w.r.t the LWF scheme
 o LWF regulations in Haryana
o The rules in Andhra Pradesh pertaining to the LWF
 How does a payroll software help implement the LWF rules? 
 Summary
 FAQs

What is the Labour Welfare Fund?

The Labour Welfare Fund (LWF) is an initiative by the government of India to help and
improve the living conditions of the unorganized sector. Out of 36 states and union territories,
the act has been only implemented in 16 of them (I have mentioned a list below).  Based on
this act, you as an employer need to contribute a certain about on your behalf as well as on
behalf of your employee. This will vary based on the state in which your company functions.

The amount to be contributed, the last date to contribute and even the penalties for not
contributing differ from one state to the other. You need to check the applicability and this
will depend on the state your company is registered in.

Apart from the Labour Welfare Fund, some of the other compliances for payroll that you
need to be aware of are Employee State Insurance, Employee Provident Fund, Professional
tax and TDS. If you are running payroll in excel, the following helps you understand the
compliance calculations: how to run payroll in excel.

What are the common benefits of the Labour Welfare

Fund (across states)?
While different states decide how they decide to use the funds, there are some benefits that
are majorly common to all. Some of them are mentioned below

Improved social security

Because of this fund, unemployed people or women in subsidiary occupations have a better
chance of arranging for medical treatments. Also, workers in the unorganized sector earn
higher wages as a result of this fund, hence, better living conditions that increase the standard
of living for a lot of them.

Through this scheme, the families of workers also receive nutritious food, medical facilities
and access to recreational facilities.