Missed LWF Deduction in December: Can We Adjust It in January 2024 Without Issues?

If LWF is not deducted from the employee's December 2023 salary, can we deduct it from the employee's January 2024 salary? Is there any issue arising due to this?

Payment of Welfare Fund Contributions

Not deducting an amount from the salary is not a crime, but not paying the amount, whether or not deducted, is an offense. Therefore, if the amount is payable monthly (I understand that the welfare fund is payable in six months or annually) and you have not made the payment of contribution in respect of any employee, then that is an omission. However, you can pay it along with the next month's contribution. It may attract some penal charges and interest.

Dear Lakshminarayan,

In general, the deduction of LWF (Labour Welfare Fund) from an employee's salary is subject to labor laws and regulations in the relevant jurisdiction. It's important to ensure that any deductions comply with applicable laws and employment contracts.

Legal and Ethical Considerations of LWF Deductions

Deducting LWF from an employee's salary in a subsequent month to make up for a missed deduction in a previous month may raise legal and ethical considerations. It's advisable to review the specific labor laws and regulations in your location, as well as any applicable employment contracts or agreements, to determine the permissible and potential consequences of such a deduction.

Thanks

Dear Lakshminarayanan U, You have until 15th January 2024 to pay both the employee and employer contributions to the Labour Welfare Board. There will be no legal issues if eligible employees' contributions are deducted from their January 2024 salary. Because the payment is done before the due date, you will save penal interest/damage.

Regards,
Suresh

As per the Act, the last date for payment of the Labour Welfare Fund to the Government is 31st January. The Management is expected to remit the amount (both employees' and employer's) to the Authority. The contribution from eligible employees will normally be deducted from their salary in December every year. However, if for some reason the contribution towards LWF is not deducted in December, it can be deducted from the January salary. But the Company has to pay in advance within the due date.