Labour Welfare Fund: What is LWF Deduction in Salary, Contribution, Benefits

The Labour Welfare Fund (LWF) is a statutory contributory fund managed by the individual state government authorities in India. The state Labour Welfare Board determines the frequency and amount of the LWF contribution. It differs from state to state. 

The employers and workers contribute to the LWF for the benefit of workers. In some states, an annual contribution is made to the LWF, while in others, the contribution is half yearly.

What is the Labour Welfare Fund (LWF) in India?

Various state legislatures have enacted the Labour Welfare Fund Act, focusing on the welfare of workers and labourers. This Act provides the workers and establishments to whom the Act is applicable, welfare fund contribution conditions and various services and facilities offered to the workers regarding welfare fund. Only 16 states have enacted the Labour Welfare Fund Act out of 37 states, including union territories.

These 16 states have established the Labour Welfare Fund (LWF) under the Act. The employer and workers to whom the Act is applicable contribute to the LWF. Since the state governments manage the LWF, the contribution rate towards the LWF differs from one state to another.

The LWF contribution provides financial aid for those in need and facilities for labourers and workers to improve their working conditions, raise their standard of living and provide social security.

Labour Welfare Fund (LWF) Applicability

The Labour Welfare Fund Act does not apply to all categories of workers working in an establishment. The applicability of the LWF differs depending upon the respective state’s Labour Welfare Fund Act. Its applicability is based on the number of employees or workers, their designation and wages earned. 

Generally, the LWF applies to factory workers earning a specific wage, establishments covered under the Shop and Establishment Act, transport services establishments, plantation workers, societies, etc.

List of states with Labour Welfare Fund

• Andhra Pradesh
• Chandigarh
• Chattisgarh
• Delhi
• Goa, Diu and Daman
• Gujarat
• Haryana
• Karnataka
• Kerala
• Madhya Pradesh
• Maharashtra
• Odisha
• Punjab
• Tamil Nadu
• Telangana
• West Bengal

Labour Welfare Fund (LWF) benefits

Generally, workers can utilise the money or contributions made to the LWF for the following purposes:

• Educational facilities for children
• Medical facilities for the workers and their families
• Transport facilities for commuting to work
• Lonas for housing facilities for constructing houses at concessional rates
• Establish home industries and subsidiary occupations for unemployed workers and women
• Vocational training
• Provide nutritious food to children

LWF contribution

As per the provisions of the Labour Welfare Fund Act, the employer and the worker or employee must contribute towards the Labour Welfare Fund. In most cases, the employer contributes on behalf of the workers from their salaries or wages. The contributions to the LWF are made annually, half-yearly or monthly. 

The frequency, contribution date, and contribution amount to the Labour Welfare Fund differ from state to state. The employer needs to make the contribution by submitting it to the Labour Welfare Fund Board in the prescribed form before the due date. 

LWF deduction

The state-wise deduction or contribution amount towards LWF and the frequency are mentioned below:

Frequently Asked Questions

What is LWF in the salary slip?

LWF means the contribution amount paid towards the Labour Welfare Fund (LWF) from the employee’s or worker’s salaries or wages. It will be paid by the employer to the LWF either monthly, yearly or half-yearly according to the state Labour Welfare Fund Act.

What is the Labour Welfare Fund deduction in salary?

In India, 16 states have enacted the Labour Welfare Fund Act to provide social security to the workers. In these 16 states, a Labour Welfare Fund is established as per the Act. The employer and worker must contribute a sum of amount towards the LWF. The employer deducts the employee’s or worker’s contribution amount from their salary and pays it to the LWF.

What is the amount of the Labour Welfare Fund contribution?

The amount of LWF contribution varies from state to state. Usually, the total contribution varies from Rs.6 to Rs.480, depending on the state Labour Welfare Fund Act. 

How do you fill the Labour Welfare Fund form online?

Employers and establishments covered under the Labour Welfare Fund Act can fill out the LWF online and make LWF contributions through the respective state Labour Welfare Fund or Labour Welfare Board website.

How to apply for a Labour Welfare Fund?

Employers and establishments can register themselves and make LWF contributions through the respective state Labour Welfare Fund or Labour Welfare Board website.  

How to calculate the Labour Welfare Fund amount?

The amount of LWF contribution varies from state to state. It is calculated under the state Labour Welfare Fund Act. Usually, the total contribution varies from Rs.6 to Rs.480, depending on the state Labour Welfare Fund Act. 

How to claim the Labour Welfare Fund?

The Labour Welfare Fund is administered by the respective state governments that implement the Labour Welfare Act. Thus, workers can fill out the claim application form and submit it to the respective state Labour Welfare Fund Board authorities. They can also fill out the claim application form on the respective state Labour Welfare Fund or Labour Welfare Board website when such online services are provided on the website.