Understanding Employer Contributions for One-Day Workers Under the Bombay Labour Welfare Fund Act: Is It Fair?

Dear Seniors,

If the employee joins on 31st July/December, in that case, the person would get a wage of 250 Rs. per day. As per The Bombay Labour Welfare Fund Act, 1953, there are 2 slabs:

1) Up to 3000 - Employee Contribution: 6 Rs & Employer Contribution: 18 Rs
2) Above 3000 - Employee Contribution: 12 Rs & Employer Contribution: 36 Rs.

In the above case, the monthly wages of the employee would definitely be more than Rs. 3000.00. So, in this scenario, the contribution of an employee is Rs. 6.00 or Rs. 12.00.

My question is, if the casual/contract worker only works for 01 day and his chances of returning back are zero, why should the employer bear an excess of Rs. 18 for all such employees? Because we are not paying workers per month wages but per day wages, so in this case, his wage would be around Rs. 300 including all benefits.

Thanks in advance.

Dear Prashant,

One thing to make clear is that the welfare fund is not based on the earned salary. The slabs are determined by the monthly standard salary. Therefore, you should ensure compliance.

Another point to note is that in the case of contract workers, you are not required to pay the labor welfare fund. However, it is your responsibility as the principal employer to oversee the compliance carried out by the contractor. If the contractor fails to comply, then you must ensure compliance on behalf of the contractor.

Regards,
Sanjay Mulay

Thank you for your response. However, my question is, if the wage for a worker is around 250 Rs. only, then I believe as an employer, I should only pay Rs. 18.00. The labor welfare board is, however, insisting on Rs. 36.00. Could you please clarify my doubt?

Wages for the month amount to 250*30=7500, placing it in the 2nd slab of LWF contribution. Therefore, you are required to pay Rs. 36.00.

Regards,
Sanjay Mulay

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