Labour Welfare Fund (LWF) explained | Contribution rates and rules - YouTube

Hello friends. As we always say, awareness is the first step to change.

In this series, we have the next video, which is on Labour Welfare Fund.

In our monthly payslips, there are sometimes deductions ranging from Rs 2 to Rs 25,

which we don't even pay attention to. This goes towards Labour Welfare Fund.

Lakhs of employees from 15+ states are covered in the Labour Welfare Fund.

It becomes the responsibility of these employees to find out where

every penny deducted from their salary is going.

In today's video, we are going to cover the Labour Welfare Fund in full detail,

the benefits and how you can avail them, its rules and regulations, applicability,

remittance period, how much contribution goes toward it - every detail under the sun.

The objective of this video is to make the HR, accountant, owner, and employee aware

about Labour Welfare Fund, and gain benefit from it along with making contributions.

Like we have made a lot of videos in our earlier series, for example, benefits of ESI,

PF, and various other labour laws, our objective is that you get your money's worth

and it should not just be used to line the pockets of government officials.

But rather, you, who is contributing and for whom the fund has been created,

should reap the actual, 100% benefit from the money you spend.

So, friends, my name is Rishabh Jain, and you are watching Labour Law Advisor.

Before we proceed, don't forget to like this video, subscribe and hit the bell icon.

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The first question which arises is, "What is Labour Welfare Fund?"

Labour Welfare Fund is a state compliance which is different in every state

according to respective legislatures. The primary objective however is the same,

which is to improve the employees' social and health status, family condition, and

socio-economic condition. Also, to create more activities for them and

make their lives easier, this is the main objective.

The fund functions through a combination of the employees' and employers' contributions

Some amount is contributed by the employee, and some by the employer.

Overall, LWF works in different regions of the states and provides various facilities

to the employees, ranging from health to transportation.

Since we are talking about the legislatures of different states in this video,

an expert opinion is very vital. So, we will consult 2 experts in this video.

Sohail & Co. from Surat will tell us about the Labour Welfare Fund in Gujarat,

and Sushil Consultancy from Mumbai will give us a few examples about Maharashtra.

Details of the other states will be provided below in a blog link.

So watch this video till the end, and then gain the information about your particular state

from the blog linked in the description box.

First, let's talk about the applicability of Labour Welfare Fund in terms of states

Like I mentioned before, this is a state level act followed by 15 states and UTs

which, by the time of making this video, are Andhra Pradesh, Goa, Kerala, Punjab,

Chandigarh, Gujarat, Madhya Pradesh, Tamil Nadu, Chhattisgarh, Haryana, Maharashtra,

Telangana, Delhi, Karnataka, Odisha, and West Bengal. The fund is applicable here.

Now let's talk about the applicability of LWF in terms of establishments and employees.

Only establishments that have a certain number of employees are covered in the fund.

>> RISHABH: On what companies are LWF applicable in Gujarat?

>> SOHAIL & CO: All kinds of shops and establishments except schools & hospitals.

The employee limit is 10 employees or more, including contractual employees,

and the contribution period is January to June. Whatever your employment stamp

on the roll in the month of June, Rs 6 will be deducted. Rs 12 will be added by the employer

Rs 18 will be deposited to the Gujarat LWF.

>> RISHABH: Per employee?

>> SOHAIL & CO: Yes, for every employee. Similarly for July to December.

Whatever you're earning in the December roll, the same contribution will be deposited then

The second thing to remember is the employee's designation and salary.

Labour Welfare Fund does not generally cover all employees.

Supervisors and managers are exempt in most states, whose wages

exceed a certain limit, which is as low as Rs 1600 in some states,

and Rs 2500 and Rs 3500 in others. Now of course,

Managers and supervisors have higher wages, hence they aren't covered.

As I have said before, to know state-wise guidelines,

refer to the blog linked below after you finish watching this video

We have mentioned applicability limit of individual states there,

and also other details regarding designations.

Now let's talk about the contribution rates in LWF.

The highest contribution rate all over the country is in Haryana,

where employee's contribution is 0.2% of wages, and 0.4% is the employer's

There is a cap of Rs 25 for employees and Rs 50 for employers

In Haryana, about Rs 75 will go to the LWF every month.

Other states have lower rates. For example, if we talk about Maharashtra,

>> SUSHIL CONSULTANCY: Rs 12 are deducted from employees' salary,

and Rs 36 is contributed by the employer. So a total of Rs 48 is deposited

>> RISHABH: every 6 months?

>> SUSHIL CONSULTANCY: Yes.

Rs 48 half-yearly, Rs 96 yearly. June paid in July, December paid in January

the company deducts Rs 100 monthly, depending on employee strength

So, the overall structure is that the employer contributes about

twice to thrice the amount contributed by the employee.

The complete state-wise details related to this have been linked below

You can check our blog for the details related to your state.

Additionally, we are also linking an Excel sheet in the description box,

through which you can calculate the LWF contribution for multiple employees.

The Excel sheet looks something like this, where you can see

statewise contribution months, amounts contributed by employer and employee,

and total contribution. Everything has been mentioned.

We have even mentioned which states take yearly contributions,

and which ones take half-yearly or monthly contribution.

You can click on the 'Welfare Calculation' sheet, which will help

if your company employes people in more than one state,

and you have to cut their LWF amount according to state rules, add your share,

and deposit the final LWF amount. How can this sheet help you in this?

You first have to select the state. I have selected 'Kerala'

Then you have to select 'Employer' or 'Employee',

depending on whose contribution you want to see. I have selected 'Employee'

Now, whichever cells are highlighted yellow, those are the months

for which the LWF contribution will be deducted from their salary.

Since all cells are yellow, this means Kerala is a state which

deducts LWF amount every month. As soon as I change it to 'Gujarat',

you can see only the June and December cells get highlighted.

Hence, Gujarat accepts half-yearly LWF contributions, once in June

and for the second time in December.

This way, you can easily calculate state-wise contribution of employer and employee.

But one thing you need to remember is that this sheet hasn't been updated

since December 2017, any changes made in the statewise, LWF won't reflect here.

You can find this sheet on the LLA blog, we have linked the blog below.

Now let's talk about the period of remittance. When do you have to pay LWF?

There are 3 types of remittances- monthly, half-yearly, and annual.

Some states ask you to deposit to the LWF once a year.

Others require you to contribute twice a year, once in June and then December

And yet others might ask employees to deposit it every month.

The main point is, what are the benefits of LWF in your state?

I'll explain the general benefits, which are common in almost all states.

Education facilities for children, medical facilities,

transportation facilities to and from work, recreation facilities,

payment for sports activities, housing facilities, tours and travels,

home industries and secondary occupations for women and unemployed persons

reading rooms and libraries, vocational training,

nutritious food for children, and scholarships.

Hence, you get a lot of benefits, both cash and non-cash, through LWF

>> SOHAIL & CO: children of employees who score 70%+ in 10th and 12th

get Rs 1,500 - Rs 3,000. More than 3000 students have availed this reward

>> RISHABH: Right, okay.

>> SOHAIL & CO: the employees' children who want to pursue MBBS

will get a reward of Rs 10,000. For courses like ayurveda, homeopathy,

physiotherapy, etc., children get a reward of Rs 5,000

A stipend of Rs 200 per month is available to the employees and/or their

children who want to take up a skill development course in ITI. Additionally,

if an employee goes for a vacation, they will get reimbursed if

they travel to one of the spots specified in a predetermined list.

Rs 300 per way is reimbursed from LWF as travel expenses, and Rs 500 for stay.

Now, this is my appeal to the HR, employers, accountants, or

whoever is managing the statutory compliance of the company.

They should ensure the contribution made by the employees and the company

can be fully used to the employees' benefit. The first thing you

have to do is to familiarize yourself with LWF rules of your state

Secondly, visit the local LWF office and understand the benefits

and get the pamphlets and brochures. Understand the process to avail benefits

Thirdly, since the workers are often well-educated

and don't have good writing skills, apply for the various LWF benefits

on behalf of your labour. For example, if their son/daughter

want to take admission in a medical college, help them avail the scholarship

by filling up the LWF form and assisting them with other formalities.

Fourthly, maintain a good liaison with the LWF officers

so that once the benefits arrive, you can learn about them via call

and understand details about how to apply for it

or the reason behind you or your employee not receiving the benefit.

Your fifth task is to utilise emails, letters and RTIs

if you/your employee are still not getting the benefit.

The LWF of almost all states are covered under the RTI

Hence, you can obtain correct information through RTI

and it only costs Rs 10. The sixth and most important task is that

if you have already made your employees avail the benefits through LWF,

please send us the process you used in detail at [email protected].

We will spread that information to countless other employees

so that they can also benefit from this scheme.

So, friends, I hope that after seeing this video,

you will try to avail the benefits offered by the Labour Welfare Fund.

Employers, HR, accountants, everyone would help their employees

to also gain benefit through LWF, it shouldn't be limited to a fund

which just withdraws Rs 100 every year from your pockets,

you should also get some benefit out of it, this is our fervent hope.

Stay tuned with Labour Law Advisor channel.

Stay aware. Jai Hind! Jai Bharat!

Before going, answer today's question. One lucky winner will get Rs.51 PayTM cash

Which of the following states have the highest contribution rate of LWF?

The options on your screen are Punjab, Rajasthan, Gujarat, and Haryana.

One lucky winner will get Rs.51 PayTM cash.

Leave your answer in the comments, please don't answer more than once

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