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

Overview : This blog is about the West Bengal Labour Welfare Fund (LWF). It gives detailed information about the applicability of The West Bengal 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 West Bengal Labour Welfare Fund. The payment interest is not made within the prescribed period mentioned in the act.
Introduction of the West Bengal LWF
The West Bengal Labour Welfare Board is a statutory and autonomous body under the Department of Labour, Government of West Bengal, under the West Bengal Labour Welfare Fund Act, 1974, to promote activities connected with the welfare of labour in West Bengal. The Board collects contributions from the establishments' employees and employers and other statutory revenues under the Act and prompts welfare measures amongst state workers.
Key Highlights of the West Bengal Labour Welfare Fund (LWF)
S.No | Particulars | Key Information |
---|---|---|
1. | Governing Act | The West Bengal Labour Welfare Fund Act. |
2. | Effective Date | 30 August 1974 |
3. | Applicability | Establishments employing Ten 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 West Bengal Shops & Establishment Act. |
5. | Contribution Rate | Section 9(2)
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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 West Bengal Welfare Fund Act, 1974
This act may be called the West Bengal Labour Welfare Fund Act 1974 (Hereinafter referred to as The Act). This act covers or extends to the whole state of West Bengal. This act applies to all establishments or employers where Ten 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, a motor transport undertaking, or any other establishment as defined in Section 2(2) of the West Bengal Shops And Establishments Act, 1963, which employs or on any working day during the preceding twelve months employed Ten or more persons.
When LWF does not apply
Suppose an establishment continues working with employees under ten for a continuous period of not less than three months. Such an establishment shall cease to be an establishment for the act with effect from the beginning of the next month following the expiry of the said period of three months. However, the employer shall intimate the reduction in employees below five. That three months have lapsed with the reduced employee strength to the competent authority within one month from the date of such cessation.
Explanation:
- When Number of Employees Exceeds Ten: Assume that an establishment had 3 (three) employees; subsequently, the number of employees increased and became 12 (Twelve) in January 2024. Now, the employer is liable to contribute LWF half-yearly as of 30th June and 31st December 2024.
- When Number of Employees Reduces Below Ten: If the number of employees is reduced and becomes less than ten in any month, for example, say, effective 1st August 2024, and the establishment continues working with less than ten employees for a continuous period of three months, say upto 31st October 2024, then such an establishment shall cease to be an establishment under this act with effect from 1st November 2024. Therefore, such an establishment is not required to remit the LWF contribution for the period ending on 31st December 2024.
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 and includes a sales promotion employee. But does not include:
- Any person employed mainly in a managerial capacity or
- A supervisory capacity draws wages exceeding sixteen hundred 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 West Bengal LWF
Once workers reach Ten or more on any working day during the preceding twelve months, the employer must register with the West Bengal 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 West Bengal Labour Welfare Board. The registration involves:
- Enter establishment and employer details.
- Creating login credentials.
- Filling in establishment’s and employee’s details.
- Uploading required documents.
The contribution made by the employees and employer
Every establishment or employer where Ten or more employees are employed and covered under this act must contribute to the West Bengal Labour Welfare Fund under sections 9(1) & (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 3/- | Rs 3/- |
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(1&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 | Rate of Interest |
---|---|
For the First 3 Months | 1% for every complete month |
After 3 Months | 1.5% of every complete month of delay. |
Conclusion
The West Bengal 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 West Bengal Labour Welfare Fund Act 1974 in simple and easy-to-understand language. The blog on West Bengal 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.