All you need to know about Labour Welfare Fund

A Labour welfare fund is a legal grant that the individual state authorities manage.

What is Labour Welfare Fund?

Labour welfare can be seen as any assistance in terms of money or kind for the working class. These facilities help the labourers in improving their working conditions, assisting their social security, and raising their standard of living. The Labour Welfare Fund Act encapsulates a variety of services, benefits and other facilities which an employer offers to the employee. These facilities are offered in the form of contributions from the employer and the employee.

Applicability of Labour Welfare Fund Act (State-Wise):

The Government of India launched the Labour Welfare Act to implement some social security for workers. The Labour Welfare Act is currently active in only 15 States and 1 Union Territory, in the country.

1. Andhra Pradesh

Eligible Establishments and Employees

The Labour Welfare Fund Act does not apply to each and every employee working in an establishment. The applicability of the Act depends on the employee’s salary as well as his designation. The employer too needs to pay attention to the number of employees working at his company to avail of the Act. Furthermore, it depends on the State the establishment is in, to check the applicability of the Act depending on the number of employees.

For example, in Maharashtra, the Labour Welfare Act applies to all establishments employing 5 or more employees except supervisors and managers who draw wages above Rs 3000. Whereas in Punjab establishments employing 20 or more workers are covered under the Act and have no restriction on the number of wages or designation of employees.

Period of Remittance

The State Labour Welfare Board decides the amount of contribution and the frequency of the contribution. The contribution to the Labour Welfare Fund may occur annually, half-yearly or monthly. Some states such as Karnataka, Haryana, Tamil Nadu, Andhra Pradesh, have an annual contribution. While some states such as Maharashtra, Gujarat, Madhya Pradesh have contributions during June and December months.

Calculate Labour Welfare Fund for Different States and See Employer’s and Employee’s Contribution

Labour Welfare Fund Rate Contribution

Labour Welfare Fund Benefits for Employees

In general, the money in the Labour Welfare Fund may be utilized by the Board to defray expenditures on the following:

1. For the education of the children of the workers.
2. Provide medical facilities for employers in the public and private sectors. so that they, in turn, can contribute those facilities to their employees and families.
3. Transportation facilities for the workers for commuting to work.
4. Entertainment and recreational activities like sports, music, etc. for the employees to create a healthy work environment, which also includes travel stipends for participating in sports competitions.
5. Under the housing amenities, loans are offered to industrial workers for the construction of houses at discounted rates.
6. Provision for excursions, tours and holiday homes.
7. Subsidiary occupations and home industries for women and unemployed persons.
8. Reading rooms and libraries.
9. Vocational training.
10. Nutritious food to the children of employees.
11. Scholarship for children of workers.

Please don’t forget to check out our in-depth video on this topic below:

If you found this blog useful, you can also see our courses on Labour Welfare Fund and Professional Tax. Speaking of Labour Welfare, another interesting topic to check out is the ESI Act.