Complete Guide To Madhya Pradesh Labour Welfare Fund (LWF), Its Applicability, Registration, Due Dates, Contribution Rate & Penal Interest
Overview : This blog is about the Madhya Pradesh Labour Welfare Fund (LWF). It gives detailed information about the applicability of The Madhya Pradesh Labour Welfare Act on the establishment and its contribution periods, contribution rates in respect of employees and employers, due and return dates of paying employees’ and employer’s contributions toward The Madhya Pradesh Labour Welfare Fund, and the interests of payment on the delay or non-payment of the MP LWF.
Introduction of the Madhya Pradesh LWF
Madhya Pradesh Labour Welfare Board is constituted under the “Madhya Pradesh Labour Welfare Fund Act, 1983”. This Board primarily caters to the social security needs of the Organized sector workers. The Board receives fund contributions from employees and employers and matching contributions from the government.
Key Highlights of the MP Labour Welfare Fund (LWF)
| S.No | Particulars | Key Information |
|---|---|---|
| 1. | Governing Act | The Madhya Pradesh Labour Welfare Fund Act. |
| 2. | Effective Date | 18 November 1983 |
| 3. | Applicability | Establishments employing one or more employees (Employees of all branches, all over India, shall be counted for this purpose). |
| 4. | Registration | LWF Registration is required even if the establishment is registered under the Madhya Pradesh Shops & Establishment Act. |
| 5. | Contribution Rate | Section 9(2)
|
| 6. | Contribution Period | Half Yearly |
| 7. | Due Date |
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For businesses looking to ensure compliance with this Act, it's essential to understand its scope and requirements. Know more about LWF compliance.
Applicability of Madhya Pradesh Welfare Fund Act, 1983
The Madhya Pradesh Labour Welfare Fund Act 1983 (Hereinafter referred to as The Act) covers or extends to the whole state of Madhya Pradesh. This act applies to all establishments or employers where one or more employees are working or employed during the preceding twelve months.
Establishment As Defined U/s 2(5) of The Act
Establishment Under Section 2(5) of The Act: “Establishment” means a factory, or any establishment which carries on any business or trade or any work in connection with or ancillary, which employs or has employed on any working day during the preceding twelve months more than such number of persons as may be specified by the State Government by notification.
Employee Under Section 2(3) of The Act
“Employee” means any person employed for hire or reward to do any work, skilled or unskilled, manual, clerical, supervisory, or technical, in an establishment. But does not include:
- Any person employed mainly in a managerial capacity or
- A supervisory capacity draws wages exceeding ten thousand rupees monthly.
Employer Under Section 2(4) of the Act
“Employer” means any person who employs either directly or through another person, either on behalf of himself or any other person, in an establishment and includes, In a factory, any person named under section 7(i) (f) of the Factories Act, 1948 as the manager, or/and In any establishment, any person is responsible to the owner for the supervision and control of the employees or the payment of wages.
Registration Under Madhya Pradesh LWF
Once workers reach one or more on any working day during the preceding twelve months, the employer must register with the Madhya Pradesh Labour Welfare Board to contribute to the LWF. They must register separately under the Labour Welfare Board, apart from the Shops & Establishment Act registration.
To register, the entity needs to follow the registration process mentioned in the user manual on the Official website of the Madhya Pradesh Labour Welfare Board. The registration involves:
- Enter your email ID and Mobile details.
- Creating login credentials.
- Filling in establishment details.
- Uploading required documents.
The contribution made by the employees and employer
Every establishment or employer where one or more employees are employed and covered under this act must contribute to the Madhya Pradesh Labour Welfare Fund under section 9(2). Every establishment or employer needs to contribute LWF two times a year, first on 30th June and second on 31st December, in respect of every employee and an employer for each such employee
| Payer (Contributor) | Rate of contribution as of 30th June (First half) | Rate of contribution as of 31st December (Second half) |
|---|---|---|
| Employee | Rs 10/- | Rs 10/- |
| Employer for each such employee | Rs 30/- | Rs 30/- |
| Due Date | 15 July | 15 January |
Payments must be made by 15th July and 15th January, respectively. To avoid penalties, ensure timely submission of contributions. For assistance, explore Payroll Compliance Services.
Interest under section 10(2) of The Act
If the employer does not pay the whole or any part of the contribution amount or any other amount that he had to pay by the act. The Welfare Commissioner may serve a notice regarding payment due by the employer along with interest for delay or nonpayment of the LWF dues within the prescribed timeframe under the act. The interest rate differs based on the delay in making the LWF dues. The interest rates chargeable are as follows.
| Period of Delay | Rate of Interest |
|---|---|
| For the First 3 Months | 1.5% for each completed month on the amount unpaid or late paid with effect from the date of the demand notice issued by the welfare commissioner. |
| After 3 Months | 2 % for each completed month of the total amount (For each passing month) payable by the employer when he continues to default on the payment of that amount. |
The employer can apply for a waiver of the penalty (Penal Interest) under the proviso of the act before the Welfare Commissioner by clearly stating the grounds for remission. If the Welfare Commissioner is satisfied that non-payment of dues was due to circumstances beyond the employer's control. In that case, the Welfare Commissioner shall remit a part or whole of the penalty under the act.
Conclusion
The Madhya Pradesh Labour Welfare Board was formed to improve the conditions of employees working in the organised sector and their legal dependents. An attempt is made to present the legal position concerning the Madhya Pradesh Labour Welfare Fund Act 1983 in simple and easy-to-understand language. The blog on Madhya Pradesh LWF is about the employer's responsibility to follow all the rules and regulations regarding the contribution payments and other dues mentioned in the act in the interest of their employees to the fund.