State-level statutory scheme where employer and employee make small periodic contributions to fund welfare activities like medical aid, scholarships, and housing for workers.

Labour Welfare Fund (LWF)

State-level statutory scheme where employer and employee make small periodic contributions to fund welfare activities like medical aid, scholarships, and housing for workers.

What is Labour Welfare Fund (LWF)?

The Labour Welfare Fund is a state-administered scheme under respective state LWF Acts. Both employer and employee contribute a fixed amount, with employer share usually higher. Rates and frequency vary widely by state: Maharashtra deducts ₹6 employee + ₹18 employer half-yearly (June and December), Karnataka takes ₹40 + ₹40 annually in December, Delhi charges ₹0.75 + ₹2.25 monthly, and Tamil Nadu collects ₹20 + ₹40 annually. The fund supports housing, medical care, education for workers' children, recreational facilities, and accident relief. Contributions are mandatory for establishments covered under the local Shops and Establishment Act or Factories Act in states that have enacted LWF. Returns and remittance must be filed online via the state labour welfare board portal. Default attracts interest and penalty under the relevant state Act.

Example

A 25-person office in Mumbai pays Maharashtra LWF in June (for Jan-Jun) and December (for Jul-Dec). For each employee, ₹6 is deducted from salary and ₹18 is added by employer.

How Labour Welfare Fund (LWF) is used

Configure LWF rules per state where you have offices. Deduct on the cut-off month and remit before the due date to avoid interest and inspection notices.

Labour Welfare Fund (LWF) FAQs

Is LWF applicable in every Indian state?

No. Only about 16 states and union territories have notified LWF (Maharashtra, Karnataka, Delhi, Tamil Nadu, Kerala, Gujarat, MP, etc.). States like UP, Bihar, and the North-East do not have LWF.

How often must LWF be deposited?

Frequency is state-specific: monthly (Delhi), half-yearly (Maharashtra, Goa), or annually (Karnataka, Tamil Nadu). Always check the latest schedule on your state labour welfare board's website before remittance.

Are contractors and trainees covered under LWF?

Most state LWF Acts cover contract workers if the principal employer's establishment is covered. Trainees, apprentices under the Apprentices Act, and managerial staff above wage limits are generally excluded.