Labour welfare constitutes a comprehensive framework of labour welfare legislations enacted by State Governments with the objective of safeguarding the rights, dignity, safety, and well-being of workers. Among the most significant welfare-oriented statutory mechanisms operating at the State level is the Labour Welfare Fund (LWF).
The Labour Welfare Fund is a dedicated social security and welfare fund established to provide financial and institutional support for improving the living and working conditions of workers and their families. It plays a crucial role in promoting social security, healthcare, education, housing, and overall welfare, particularly for workers employed in the organised, semi-organised, and certain segments of the unorganised sectors.
What is the Labour Welfare Fund (LWF)?
The Labour Welfare Fund (LWF) is a State-specific statutory welfare fund that collects contributions from:
- Employees
- Employers
- (In some States) contributions/allocations may also be supported through government mechanisms as per State legislation
The collected amount is used for worker welfare programs such as:
- Medical and health assistance
- Education support (scholarships, learning assistance)
- Housing and living-condition improvement
- Recreational and cultural activities
- Social security welfare initiatives
- Establishing and maintaining welfare institutions
- Skill development and support facilities
Scope of Labour Welfare Fund (LWF)
The scope of the Labour Welfare Fund is determined by State-specific legislations, though the overall framework remains largely uniform across States.
Coverage of Establishments
The LWF generally applies to a wide range of establishments, including:
- Factories
- Industrial establishments
- Commercial establishments
- Shops and establishments
- Plantations
- Motor transport undertakings
Categories of Employees Covered
It covers various categories of employees such as:
- Permanent employees
- Temporary employees
- Contractual workers
- (In some States) supervisory and managerial staff
Welfare Benefits Supported Under LWF
The Fund extends beyond financial assistance to support comprehensive welfare measures, such as:
- Healthcare
- Education
- Housing
- Social security
- Skill development
- Recreational facilities
- Establishing and maintaining welfare institutions
Employer Compliance Obligations Under LWF
LWF also imposes statutory compliance obligations on employers, including:
- Timely contribution payment
- Record maintenance
- Compliance with inspection/audit requirements
- Following State-specific filing timelines and payment modes
Applicability of Labour Welfare Fund (LWF) – State Wise
The Labour Welfare Fund (LWF) is a state-specific statutory mechanism, and its applicability varies across India.
The Act has been implemented in only select 16 States and Union Territories where the respective State Government has enacted LWF legislation.
States/UTs Where Labour Welfare Fund is Applicable
LWF is not a national levy. It is currently collected in 16 states and union territories:
Andhra Pradesh, Chandigarh, Chhattisgarh, Delhi, Goa, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Tamil Nadu, Telangana and West Bengal.
If your establishment is in a state that is not on this list, no LWF deduction applies there. Employers with offices in several states usually have to follow a different rate, frequency and due date in each one, which is where most LWF errors happen.
The LWF rate list below details the statutory contributions payable by both Employer and Employee, along with deduction dates and submission deadlines.
LWF Contribution Rates by State/UT
Rates as on 23 October 2026. States revise rates from time to time, so confirm the current rate before making a payment. For a quick reference, see our LWF rates page.
| S. No. | State/UT | Employee Contribution (₹) | Employer Contribution (₹) | Total Contribution (₹) | Frequency | Date of Deduction | Last Date for Submission |
|---|---|---|---|---|---|---|---|
| 1 | Andhra Pradesh | ₹30 | ₹70 | ₹100 | Yearly | 31 December | 31 January |
| 2 | Chandigarh | ₹5 | ₹20 | ₹25 | Monthly | Last day of the month | 15 October and 15 April |
| 3 | Chhattisgarh | ₹15 | ₹45 | ₹60 | Half-yearly | 30 June and 31 December | 15 July and 15 January |
| 4 | Delhi | ₹0.75 | ₹2.25 | ₹3 | Half-yearly | 30 June and 31 December | 15 July and 15 January |
| 5 | Goa | ₹120 a year | ₹360 a year | ₹480 a year | Yearly rate, statement filed half-yearly | 30 June and 31 December | 31 July and 31 January |
| 6 | Gujarat | ₹6 | ₹12 | ₹18 | Half-yearly | 30 June and 31 December | 15 July and 15 January |
| 7 | Haryana | 0.2% of wages, up to ₹35 | Twice the employee share, up to ₹70 | Up to ₹105 | Monthly | Every month | Last day of the month |
| 8 | Karnataka | ₹50 | ₹100 | ₹150 | Yearly | 31 December | 15 January |
| 9 | Kerala | ₹45 | ₹45 | ₹90 | Half-yearly | Each half-year | 15 July and 15 January |
| 10 | Madhya Pradesh | ₹10 | ₹50 | ₹60 | Half-yearly | 30 June and 31 December | 15 July and 15 January |
| 11 | Maharashtra | ₹25 | ₹75 | ₹100 | Half-yearly | 30 June and 31 December | 15 July and 15 January |
| 12 | Odisha | ₹20 a year | ₹40 a year | ₹60 a year | Yearly rate, paid in two instalments | 30 June and 31 December | 15 July and 15 January |
| 13 | Punjab | ₹5 | ₹20 | ₹25 | Monthly | Last day of the month | 15 April and 15 October |
| 14 | Tamil Nadu | ₹20 | ₹40 | ₹60 | Yearly | 31 December | 31 January |
| 15 | Telangana | ₹2 | ₹5 | ₹7 | Yearly | 31 December | 31 January |
| 16 | West Bengal | ₹3 | ₹15 | ₹18 | Half-yearly | 30 June and 31 December | 15 July and 15 January |
(Employer minimum ₹2,500 per establishment per half-year, from 2026.)
How LWF is deducted and paid
The employer deducts the employee's share from salary on the deduction date set by the state, adds the employer's share, and deposits the total with the state labour welfare board by the due date. On the salary slip the deduction usually appears as "LWF". It is separate from other statutory deductions such as PF and ESI; for those, see our guide to ESI compliance.
Most boards take payment online through their own portal, and some want a return or statement with it. How often you pay depends on the state. Chandigarh, Haryana and Punjab collect monthly. Maharashtra, Gujarat, Kerala and West Bengal are among the states that collect every six months. Andhra Pradesh, Karnataka, Tamil Nadu and Telangana collect once a year. Digiliance's payroll compliance services track these dates for every state you operate in.
Contract workers are usually covered too, and the principal employer should check that the contractor is deducting and depositing LWF for the workers at its site, as part of its contractor compliance.
What happens if LWF is paid late
Each state's Labour Welfare Fund Act sets its own interest, penalty and recovery provisions for late or missed contributions, and inspectors can ask for the payment records for past periods during a routine inspection.
In Maharashtra, if contributions stay unpaid after the Welfare Commissioner's notice, simple interest is charged at 1.5% a month for the first three months and 2% a month after that (section 6B). Karnataka charges simple interest at 12% a year for the first three months after the notice period and 18% a year after that (section 7B).
FAQs on Labour Welfare Fund (LWF)
1) Is Labour Welfare Fund applicable across India?
No. LWF is a State-specific law and is applicable only in select 16 States/UTs where LWF legislation has been enacted.
2) Who contributes to the Labour Welfare Fund?
Typically, LWF contributions are payable by both the employee and employer, in amounts fixed under the relevant State rules.
3) Which establishments are covered under LWF?
It generally covers factories, shops, commercial establishments, plantations, and motor transport undertakings, depending on State legislation.
4) Does LWF cover contractual workers?
Yes. LWF generally includes permanent, temporary, and contractual workers, and in some States may also include supervisory and managerial staff.
5) How frequently is LWF paid?
The contribution frequency varies by State and can be monthly, half-yearly, or yearly, as provided in the applicable State rules.
6) What is LWF in a salary slip?
LWF on a salary slip is the employee's contribution to the state Labour Welfare Fund. It is a small fixed amount set by the state, not a percentage of salary in most states, and the employer adds its own share before paying the total to the state Labour Welfare Board.
