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

As of the latest updates, the LWF is applicable in the following States and Union Territories:

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

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.