What it means
Several states have their own Labour Welfare Fund Act. Each sets who is covered, the employee and employer amounts (usually small sums), and whether it is paid monthly, half-yearly or once a year, often in June and December. Check your state board’s current notification for the amounts and dates. The money funds housing, education and health schemes for workers. Unlike PF or ESI, the amounts are small, but missing them still brings notices and penalties.
Example
Illustrative rates only; check your state’s current notification.
| Item | Amount |
|---|---|
| Employees covered | 30 |
| Employee share per half-year | ₹20 × 30 = ₹600 |
| Employer share per half-year | ₹40 × 30 = ₹1,200 |
| Paid to the state board for the half-year | ₹1,800 |
The employee share comes off the June and December payslips; the employer pays both shares together.
Common mistakes
- Forgetting LWF because the amount is small, then facing interest on several years.
- Using one state’s rate for staff in another state.
- Deducting LWF from staff the state’s Act does not cover, such as managers above a wage limit.
In MyRecords
This is partly built. MyRecords recognises an LWF deduction or contribution by its salary component type or name, tags it on the payslip, totals it by state with the employee and employer shares on the India statutory page, and shows it with each employee’s LWF number in the statutory registers. It has no state LWF rate tables yet, so you set the amount as a salary component.