What is Labour Welfare Fund?
Labour Welfare Fund is a fund contributed by Employer, Employee and in some states by the Government as well. The purpose of these welfare funds is to provide housing, medical care, educational, and recreational facilities to the workers and their dependents.
Distinct labour welfare Act and rules are framed for different states & Union territories. For instance there is Maharashtra labour welfare Act 1953 for Maharashtra, Karnataka labour welfare Act 1965.
The fund is made up of contributions from both the business and the employees. Each state contributes at a different rate.
The government of Maharashtra has enacted the Labour Welfare Fund Act for providing welfare benefits to the labourers employed in establishments/factories situated in Maharashtra. It extends to the whole state of Maharashtra.
The Maharashtra Labour Fund Act, 1953 is read with Maharashtra Labour Welfare Fund Rules, 1953. The rates of contribution vary according to the category of the labourers, as it depends on the wages earned by the labourers. Moreover, for States like Maharashtra, Gujarat, Andhra Pradesh the contribution is made in June and December, whereas for various other states the contribution is made annually
- To provide for the protection of employer and employee contributions to the Fund, as well as their payment into the Fund;
- To provide for a contributory disability pension for any worker or their dependents in the event of permanent incapacity;
- To make provisions for imposing penalties for a false statement made or information furnished by an employer or employee concerning his contribution;
- To provide welfare measures for the benefit of workers;
- To provide relief, compensation, or rehabilitation to any worker or their dependents in the event of death, injury, or permanent disability as a result of employment;
- To provide assistance and facilities to workers during periods of emergency arising from natural calamities.
The Maharashtra Labour Welfare Fund was established in 1953 and applies to all enterprises in the state with 5 or more employees who are classified as contract labourers under the Act. This applies to any citizen who intends to create a new shop or a commercial institution under the Maharashtra government’s authority.
Except for those in managerial or supervisory positions earning more than Rs. 3,500/- per month, this category includes all employees, including those hired through contractors.
These funds are classified as fringe benefits since they are provided through a collective contribution that is supported by the employee, the employer, who contributes three times the employee’s contribution, and the state government.
Important Note:- Once registered on MLWF, even if number of employees fall below 5 the registration will not be revoked. Provided that not more than 3 months have been passed.
w.e.f December, 2000 Contribution is to be deducted in respect of the Employees who are present on the Muster rolls on 30th June and 31st December every year, Contribution is to be deducted from the salary of employees Twice in a year i.e. June & December every year at following rates:
Due dates for payment and Return (Form A-1) Filing
For 30th june – On or before 15th July
For 31st December – On or before 15th January
|Salary Slab||Employee’s Contribution||Employer’s Contribution||Total|
|Up to Rs. 3000/- p.m.||Rs. 6/-||Rs. 18/-||Rs. 24/-|
|Rs. 3001/- p.m. & more||Rs. 12/-||Rs. 36/-||Rs. 48/-|
|*Excluding manager & person working as a supervisor drawing salary above Rs. 3500/-|