Navigating Tamil Nadu Labour Welfare Fund: Do Software Companies Need to Pay and How to Calculate?

Hi professionals,

I am working in a software development company and I need some details regarding the Tamil Nadu Labour Welfare Fund.

1. Do software companies also need to pay the Labour Welfare Fund?
2. We have been operating in Chennai for more than 5 years. Should I calculate the Labour Welfare Fund from the year we started our operations in Chennai or for this half-yearly period?

Regards,
RR

Dear RR,

All shops, establishments, and factories will be covered under this Act. The coverage will be for employees who are not in the executive/supervisory cadre. This means that employees who do not have the capacity to handle the company's finances, hire or make decisions on hiring, or have control over the business will fall under the definition of Workmen. Ideally, all employees except for project managers and those above the cadre will be covered under the Act.

Regards,
Roopa

I would like to quote the definition of 'employee' under the LWF Act.

Definition of 'Employee' Under the LWF Act

2 (b) "Employee" means:
(i) 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 12 months, whether the terms of employment are express or implied, but does not include any person who:
(a) is employed mainly in a managerial capacity; or
(b) is employed in a supervisory capacity [drawing wages exceeding three thousand and five hundred rupees per month] or exercises functions mainly of a managerial nature by the nature of the duties attached to the office or by reason of the powers vested in him; or
(c) is employed as an apprentice or on a part-time basis.

I hope it is clear now. If you require any support, please write to us directly at the given email address.

Regards