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Emgage Community > Complaince > Labour Welfare Fund

Labour Welfare Fund


What is the Act?

For workers, it is a kind of financial assistance to improve their job conditions, their social welfare and their living standards. The Labour Welfare Fund Act covers the employer’s different services, incentives and amenities for the worker. In the context of its physical, social and psychological environment, the word “Welfare” refers to a living employee of an individual or a company. The notion of labor welfare has undergone dramatic reform.

Labour welfare refers to employers, trade unions, state and non-governmental organizations and agencies take care of the well-being of workers. Welfare encompasses everything that is undertaken for employee comfort and enhancement that is given over and above salaries.

About the Act

  1. Act exclusively focusing on welfare of the workers, known as the Labour Welfare Fund Act.
  2. The Labour Welfare Fund Act incorporates various services, benefits and facilities offered to the employee by the employer.
  3. Such facilities are offered by the means of contribution from the employer and the employee.
  4. However, the rate of contribution may differ from one state to another.

Refers to workers who improve their working environment and living standards for all other services, amenities and facilities. It is a statutory contribution, administered by individual authorities of the community. The degree and frequency of the contribution is determined by the state.

Objectives of the Act

  1.  Provides social comfort to employees.
  2. Support overall improvement of employees.
  3. Provide financial support indirectly to the employees.
  4. Contribute in developing sense of responsibility and belongingness among employees.
  5. Improve working conditions at the workplace for employees.
  6. Maintain and retain the existing workforce.
  7. Reduce rate of absenteeism from work and labour turnover from job.
  8. Improve productivity and efficiency of employees at workplace.
  9. Provide healthy and proper working conditions.
  10. Ensure betterment of employees and families and society as a whole.

Features of labour welfare

  1. Addition to wages and salaries
  2. Work for betterment of worker
  3. It is dynamic in nature, varies country to country.
  4. Flexible and ever changing concept


  1. Improves moral and mental condition of the employee
  2. By providing facilities workers have more confidence in their employer.
  3. Systematic promotion of employee, encourage them to do their duties.
  4. Noise and Vibrations affect the health of the employee badly, fund helps them to recover.

Scope of the Act

LWF is funded by contribution of the employer as well as the employee and also by the state governments in few states. The scope is valid for the housing purpose, the education of their children, the health care of the employees and their family members, their working environment and even the funeral of them.


  1. 16 states are included out of the 37 states and UT’s.
  2. For state wise applicability, refer the state wise sheet.
  3. Employees who get less then 3500/- wage


If the frequency of contribution is half yearly then, deduction period is divided into two consecutive dates which are mentioned in the state specific act. It is the duty of the employer to make the required deductions from the employee’s salary and to submit the same to the Labour Welfare Fund Board in the prescribed form before the due date.

Non Application Status

  • Assam
  • Bihar
  • Himachal Pradesh
  • Jammu and Kashmir
  • Jharkhand
  • Ladhakh
  • Lakshdweep
  • Manipur
  • Meghalaya
  • Mizoram
  • Nagaland
  • Puducherry
  • Rajasthan
  • Sikkim
  • Tripura
  • Uttar Pradesh
  • Uttarakhand

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