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

Rewati Krishnan
Sanjeev Kumar |inUpdated : January 27, 2025

Overview : This blog is about the Tamil Nadu Labour Welfare Fund, which provides detailed information about the applicability of The Tamil Nadu Labour Welfare Act on the establishment and its exception, contribution periods, contribution rates in respect of employees and employers, due date for LWF payment/return filing under the Tamil Nadu Labour Welfare Fund, The blog also deals with the late payment interest and penalty for non-compliance.

Introduction of Tamil Nadu LWF

The Tamil Nadu Labour Welfare Board was constituted by the Government of Tamil Nadu in the year 1971 by an Executive Order of the Government (G.O.Ms No. 222, Labour Department, Dated: 20/02/1971) to enhance the conditions of the employees and their families (Dependents). The state passed the Tamil Nadu Labour Welfare Fund Act, 1972, and came into force on 01/01/1973.

Key Highlights of the Tamil Nadu Labour Welfare Fund

S.No Particulars Key Information
1.Governing ActThe Tamil Nadu Welfare Fund Act 1972.
2.Effective Date01 January 1972
3.ApplicabilityEstablishments employing fifty or more employees (Employees of all branches all over the India shall be counted)
4.RegistrationLWF Registration is required even if the establishment is registered under the Tamilnadu Shops & establishment Act.
5.Contribution RateSection 7A(2)
  • Employee: ₹20/-
  • Employer: ₹40/-
6.Contribution PeriodYearly
7.Due DateYearly (1st Jan to 31st Dem): 31st Jan

Applicability of Tamil Nadu Welfare Fund Act, 1972

This act may be called the Tamil Nadu Labour Welfare Fund Act of 1972 (Hereinafter referred to as The Act). This act covers or extends to the whole state of Andhra Pradesh. This act applies to all establishments or employers where Five or more employees are working or employed.

Meaning of Establishment

Under Section 2(d) of The Act, the “Establishment” means a factory, or a motor transport undertaking as defined in the Motor Transport Workers Act, 1961, Or a plantation as defined in clause (f) of section 2 of the Plantations Labour Act, 1951, Or a catering establishment as defined in section 2 (1) of the Tamil Nadu Catering Establishments Act, 1958 (Employing five or more workers), Or an establishment, including a society registered or deemed to be registered under the Tamil Nadu Societies Registration Act, 1975 (Tamil Nadu Act 27 of 1975) and a charitable or other trust, whether registered under any law applicable to such charitable or other trust or not, which carries on any business or trade or any work in connection therewith or ancillary thereto and which employs, or on any working day during the preceding twelve months employed, five or more persons.

Meaning of Employee

Under Section 2(b) of The Act, the employee means any person employed for hire or reward to do any work, skilled or unskilled, manual, supervisory, clerical, or technical, in an establishment for 30 days during the period of the preceding twelve months.But does not include any person:

  • Who is employed mainly in a managerial capacity.
  • Who is in a supervisory capacity draws wages exceeding fifteen thousand rupees per men-sem.
  • Who is employed as an apprentice or part-time.

Meaning of Employer

Under Section 2(c), the Employer means a person who has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to any other person, whether called a manager, managing director, managing agent, superintendent, or by any other name, such other person.

Registration Under the Tamil Nadu LWF

Once workers reach five or more on any working day during the preceding twelve months, the employer must pay contributions under the Tamil Nadu Labour Welfare Board. Even if the establishment is registered under the Tamil Nadu Shop and Establishment Act, it must be registered separately under the Tamil Nadu Labour Welfare Board. They must go to the Official Site of the Tamil Nadu Labour Welfare Board. Enter the details regarding Employer and Establishment Details and upload the required documents regarding PAN, Registration Certificate, and upload Excel sheet of employees details, etc. And pay the contribution amount.

Contribution made by the employees and employer

Every establishment or employer where Five or more employees are employed and covered under this act needs to contribute to the Tamil Nadu Labour Welfare Fund under the act. Every establishment or employer needs to pay a contribution towards LWF once a year on 31st December for every employee and an employer for each such employee.

PayerRate of contribution as of 31st December
EmployeeRs 10/-
Employer for each such employeeRs 20/-

Last Date of Payment of Contribution

Every employer has to pay the Board both the employer’s contribution and the employee’s contribution by the provisions by the 31st of January succeeding year.

Interest on nonpayment or late payment of LWF

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 of the due by the employer. Even if the employer continues not paying the due amounts, then the employer shall be charged by the simple interest according to the amount payable by him as on the last date prescribed in the notice. The period and rate of interest are mentioned below:

PeriodRate of Interest
For the First 3 Months1% of the total amount (For each passing month) payable by the employer as of the last date prescribed in the notice sent by the Commissioner.
After 3 Months passed mentioned above1.5 % of the total amount (For each passing month) payable by the employer when he continues to default on the payment of that amount.

Conclusion

The Tamil Nadu Labour Welfare Board was formed to improve the conditions of employees working in the organized sector and their legal dependents. An attempt is made to present the legal position concerning the Tamil Nadu Labour Welfare Fund Act 1972 in simple and easy-to-understand language. The blog on Tamil Nadu 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.