Understanding Tamil Nadu Labour Welfare Fund: Who Qualifies and How to List Employees?

Compliance with the Tamil Nadu Labour Welfare Fund Act

Companies covered under the Shops and Establishment Act need to comply with the statutory requirements mentioned in the Tamil Nadu Labour Welfare Fund Act. I understand that an employee employed in a company governed under the Labour Welfare Fund Act can claim benefits under this act only when their salary is less than INR 15,000 per month. Can any professionals advise whether this benchmark amount can be considered for remitting the contribution for this Fund? In other words, can we take into account only the employees who earn less than INR 15,000 per month for the computation of this contribution?

Form A and Employee Listing

Similarly, in Form A of this act, there is a column for listing the number of employees who are not covered under this act. Can we mention the number of employees who earn above INR 15,000 per month in this column, or should only the managers/executives/supervisors who are exempt from this contribution be listed in this section? Additionally, if someone can advise on the effective date when INR 3,500 was changed to INR 15,000, it would be appreciated.

Thanks

At the outset, the Company is liable to pay the LWF Contribution in respect of employees defined under Section 2(b)(i), which includes the following categories of employees: any person who is employed for hire or reward to do any work, skilled or unskilled, manual, supervisory, clerical, or technical in an establishment for a period of 30 days during the period of the preceding twelve months, whether the terms of employment be express or implied.

It has excluded the following categories of employees [Section 2(b)(i)(a)), (b) and (c)]:

- (a) who is employed mainly in a managerial capacity
- (b) who, being employed in a supervisory capacity, draws wages exceeding Rs. 1,000 per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature, or
- (c) who is employed as an apprentice or on a part-time basis.

The wage limit Rs.1,000/- fixed under (b) above was enhanced to Rs.3,500/- and the same has been further enhanced to Rs.15,000/- by virtue of an amendment to the Act, namely; The Tamil Nadu Labour Welfare Fund (Amendment) Act, 2018, which was published in the Official Gazette of Tamil Nadu on 30th January, 2018. The effective date of enforcement of the amendment is from 14th March, 2018. A copy of the Gazette Notifications of 30th January, 2018, and 14th March, 2018, are attached herewith.

Your Query

Which means whether we can take into account the employees who draw less than INR 15,000 per month alone for computation of this contribution? You have to take all the employees as defined in Section 2(b)(i) even though their salary is above INR 15,000 per month. In addition, if you have employees in the supervisory category and drawing wages more than INR 15,000 per month, you can exclude them. In Form A, you have to mention in the specific column the number of employees who are not covered. You have to mention the number of employees engaged in the category of Supervisors (who draw more than INR 15,000/- per month), Managers/Executives.

Regards, Lakshmanan

S.G. Management Services Kolkata

We are about to get the Labour Welfare Fund registered this month. Is there any late fee or penalty clause in LWF?

Regards,
HRdPuru

Hi,

We are a Limited Liability Partnership (LLP) in Chennai with the office inaugurated on 1st Oct '18. Will an LLP be liable to contribute towards the Labour Welfare Fund? I've received conflicting answers to this question. Please help.

Thanks,
Pratap