Is Our IT Company Required to Contribute to the Bombay Labour Welfare Fund? Seeking Clarity

Is Bombay Labour Welfare Fund Act Applicable for IT company

We are an IT company with a staff of 80 employees. Today, an inspector from the Bombay Labour Welfare Fund Act visited our office and requested payment for the contribution.

Kindly, let me know if software companies are exempt from this contribution, as it clearly states that it is applicable to those working below in the managerial or supervisory roles.

Kindly share any official documents if available.

Regards,
Vishal G

Dear Vishal G,

If no one from your state member is replying, then purchase the book on Bombay Labour Welfare Fund Act from the Labour Law Book-seller in your area and then go through the definition of the employee and the contribution provisions of this Act or otherwise do as the Inspector directs you.

Regards,

R.N.Khola

If the Inspector has directed to contribute to the Labour Welfare Fund, you have to pay. If the Bombay Labour Welfare Fund Act exempts persons who are either managers or in a supervisory capacity from the definition of an employee, as is the case under many other labor enactments, then exempt them from contribution and contribute to the Labour Welfare Fund in respect of others.

Being an IT company, can you say that all those who are working in your company are "managerial or supervisory" employees? What is meant by an employee having managerial or supervisory powers? If you simply say that one person is a supervisor, the same may not be accepted unless you prove that he has any supervisory powers, at least to sanction leave to his subordinate employee or to appraise the performance of a subordinate.

It is not even possible to imagine that an establishment can work without "employees" but only with "Managers." The IT sector may enjoy some benefits but is not exempt from the operation of basic laws. Therefore, if your IT Company is given a license to run under the Maharashtra Shops and Commercial Establishments Act, you are bound to pay the welfare fund subject to such conditions as provided under the Act.

Regards,

Madhu.T.K

Welfare Fund is a state subject; therefore, the contributions and returns should be sent for each unit separately to each state's welfare fund board.

Regards,
Madhu.T.K

Dear all,

Actually, our company is registered in Noida. As per our business, we deploy our employees across India at client sites. We want to know if there is no applicability of LWF in Noida, whether we are liable to pay LWF for deployed employees in each state or not. Please revert ASAP.

Thanks!!!

Prakash Tiwari

If separate offices in different states where your employees work have separate Shops and Establishment Registrations, you have to contribute as per that state's policy irrespective of the location of the head office and coverage of LWF to it.

Regards,
Madhu.T.K

Thank you Madhu.T.K for providing your valuable advice. Could you please inform me about the criteria for submitting LWF returns in various applicable states?

Thank you,
Prakash Tiwari

There will be an Inspector/Executive Officer under the Welfare Funds of each State who represents a district. Contact him for details.

Regards, Madhu.T.K

Dear All,

In light of the judgment of the Bombay High Court - Standard Chartered Bank, Petitioner Vs. Vandana Joshi and another, the definition of worker has undergone a change. In that citation, there is a reference to "Software Industry." Please seek specialist legal advice to avoid any coverage.

With Regards,

E-mail: rajanassociates@eth.net
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