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Complete Guide To Odisha Labour Welfare Fund (LWF), Its Applicability, Registration, Due Dates, Contribution Rate & Penal Interest

Rewati Krishnan
Sanjeev Kumar |inUpdated : January 29, 2025

Overview : This blog is about the Odisha Labour Welfare Fund (LWF). It gives detailed information about the applicability of The Odisha Labour Welfare Act on the establishment and its contribution periods, contribution rates for employees and employers, due and return dates of paying employees’ and employer’s contributions toward The Odisha Labour Welfare Fund. The payment interest is not made within the prescribed period mentioned in the act.

Introduction of the Odisha LWF

The Odisha Labour Welfare Board is constituted under the “Chhattisgarh Labour Welfare Fund Act”. 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.

Highlights of the Odisha Labour Welfare Fund (LWF)

S.No Particulars Key Information
1.Governing ActThe Odisha Labour Welfare Fund Act.
2.Effective Date16 December 2005
3.ApplicabilityEstablishments employing Twenty or more employees (Employees of all branches, all over India, shall be counted for this purpose).
4.RegistrationLWF Registration is required even if the establishment is registered under the Odisha Shops & Establishment Act.
5.Contribution RateSection 10(1)
  • Employee: ₹10/-
  • Employer: ₹20/-
6.Contribution PeriodHalf Yearly
7.Due Date
  • First Half year (Jan to June): 15 July
  • Second Half Year (July to Dec): 15 Jan

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 Odisha Welfare Fund Act, 2005

This act may be called the Odisha Labour Welfare Fund Act 2005 (Hereinafter referred to as The Act). This act covers or extends to the whole state of Odisha. This act applies to all establishments or employers where Twenty or more employees are working or employed during the preceding twelve months.

Establishment As Defined U/s 2(d) of The Act

Establishment means a factory as defined in Section 2(m) of the Factories Act, 1948, or a motor transport undertaking as defined in the Motor Transport Workers Act, 1961, or any other establishment as defined in Section 2 of the Odisha Shops And Establishments Act, 1965, and includes a society registered under any law in force in the State relating to registration of societies and charitable or other trusts and which employs or on any working day during the preceding twelve months employed twenty or more persons. But does not include an establishment, not being a factory, belonging to or under the control of the Central or any State Government.

Employee Under Section 2(b) 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
  • In a supervisory capacity,
  • An Apprentice.

Employer Under Section 2(c) 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 Odisha LWF

Once workers reach Twenty or more on any working day during the preceding twelve months, the employer must register with the Odisha 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 Odisha 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 Twenty or more employees are employed and covered under this act must contribute to the Odisha Labour Welfare Fund under section 10(1). 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)
EmployeeRs 10/-Rs 10/-
Employer for each such employeeRs 20/-Rs 20/-
Due Date15 July15 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 9(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 and 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.

PeriodRate of Interest
For the First 3 Months1% for each complete month of delay in payment.
More than three months delay1.5% of each complete month.

Conclusion

The Odisha 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 Odisha Labour Welfare Fund Act 2005 in simple and easy-to-understand language. The blog on Odisha 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.