Quick Answer: Labour Welfare Fund contributions fall due before 15 July and 15 January in Maharashtra and Delhi, and on or before 15 January in Karnataka. The rate is set state by state: ₹25 from the employee in Maharashtra, ₹50 in Karnataka and 75 paise in Delhi. Liability attaches to names on the register on 30 June and 31 December.
There is no national Labour Welfare Fund. Each State and Union territory runs its own enactment, board and collection cycle, so an employer with offices in three states carries three amounts on three dates. The figures below are the current position in Maharashtra, Karnataka and Delhi, taken from each jurisdiction's statutory text.
| Maharashtra | Karnataka | Delhi | |
|---|---|---|---|
| Governing enactment | Maharashtra Labour Welfare Fund Act, 1953 | Karnataka Labour Welfare Fund Act, 1965 | Bombay Labour Welfare Fund Act, 1953, as extended to Delhi |
| Employee's share | ₹25 | ₹50 | 75 paise |
| Employer's share | ₹75 | ₹100 | ₹2.25 |
| Government's share | ₹50 | ₹50 | ₹1.50 |
| Cycle | half-yearly | annual | half-yearly |
| Name must stand on the register on | 30 June and 31 December | 31 December | 30 June and 31 December |
| Payment deadline | before 15 July and 15 January | on or before 15 January | before 15 July and 15 January |
What Are the Labour Welfare Fund Contribution Rates in 2026?
The employee pays ₹25 in Maharashtra, ₹50 in Karnataka and 75 paise in Delhi. Each enactment then sets the employer's share above the employee's and adds a government share on top.
Maharashtra charges a flat ₹25 from the employee every six months under section 6BB(2)(a) of the Maharashtra Labour Welfare Fund Act, 1953, and section 6BB(2)(b) sets the employer's share at thrice that amount, or ₹75. Under section 6BB(8) the State Government pays twice the employee's contribution with effect from 1 April 2003, a further ₹50.
What Changed in Maharashtra in 2024?
The flat ₹25 is recent. The earlier rate was banded: ₹6 for wages up to and inclusive of ₹3,000 per month, and ₹12 for wages exceeding ₹3,000. The substitution published in the Maharashtra Government Gazette Extraordinary No. 41, Part VIII, dated 18 March 2024 removed the wage test, so the first half-yearly cycle charged at ₹25 was the one ending 30 June 2024. The amending Bill's Statement of Objects and Reasons records that there had been no increase since 2003.
Can a State Raise the Rate Without Amending the Act?
Only within a ceiling, and only for one share. The proviso to section 6BB(2)(a) lets the Maharashtra Government raise the employee's rate by Official Gazette notification, on a proposal from the Board, once in every three years, and that increase shall not exceed 30% of the rate. The employer's share sits outside the proviso, and moves only because it is three times whatever the employee pays.
Karnataka used the legislative route instead. Karnataka Act No. 05 of 2025 substituted "fifty rupees, one hundred rupees and fifty rupees" for "twenty rupees, forty rupees and twenty rupees" in section 7A(2), lifting all three shares at once. It received the Governor's assent on 8 January 2025, was published in the Karnataka Gazette Extraordinary on 10 January 2025, and came into force at once.
When Is the Labour Welfare Fund Contribution Due?
Before 15 July and 15 January in Maharashtra and Delhi, and on or before 15 January in Karnataka. Read the preposition, because two of the three do not say "on or before".
Maharashtra's section 6BB(3) requires the employer to pay both shares before the 15th day of July and the 15th day of January, and Delhi's contribution provision is worded the same way. Karnataka's section 7A(3) requires payment on or before 15 January of the following year, and its Board gave 15 January 2026 as the last date for calendar year 2025.
Which Date Fixes the Liability?
The register, not the payroll month. Maharashtra and Delhi charge for an employee whose name appears on the establishment's register on 30 June and on 31 December, and Karnataka for an employee whose name stands on it on 31 December.
How Is the Employee's Share Recovered?
By deduction from wages, and by nothing else. Maharashtra's section 6BB(4) allows recovery only by that route, and deems the deduction authorised under the Payment of Wages Act, 1936. Two provisos tighten it. No deduction may be made from wages other than the June and December wages, and a missed deduction may be taken from a later month only with the written permission of the Inspector appointed under the Act.
Section 6BB(5) bars the employer from ever deducting its own share from an employee's wages. Section 6BB(6) deems any amount deducted to have been entrusted to the employer for paying it over. Employers facing several cycles in one fortnight track them in a compliance management system rather than per-state reminders.
Which Employers Must Contribute to the Labour Welfare Fund?
Factories are covered in all three states. Other establishments are caught once they reach a headcount: five or more persons in Maharashtra and Delhi, and ten or more in Karnataka since 7 January 2026. These limbs name Central Acts as the state enactments drafted them. Section 143 of the Occupational Safety, Health and Working Conditions Code, 2020 repealed the Factories Act, 1948 and the Motor Transport Workers Act, 1961. Section 69 of the Code on Wages, 2019 repealed the Payment of Wages Act, 1936. Both took effect on 21 November 2025. The state Acts still name them, so confirm with the board how each is read. In Maharashtra, establishments exempted under the proviso to section 4 of the Shops and Establishments Act are included, not excused.
| Maharashtra, section 2(4) | Karnataka, section 2(4) | Delhi | |
|---|---|---|---|
| Always covered | a factory; a tramway or motor omnibus service; a motor transport undertaking under the Motor Transport Workers Act, 1961 | a factory; a motor omnibus service; any plantation or workshops | a factory; a tramway or motor omnibus service; a motor transport undertaking under the Motor Transport Workers Act, 1961 |
| Other establishments | within the meaning of the Maharashtra Shops and Establishments Act, 1948 | carrying on business or trade or ancillary work, including a society under the Karnataka Societies Registration Act, 1960 and a charitable or other trust | within the meaning of the Delhi Shops and Establishments Act, 1954 |
| Headcount test | employs, or employed on any working day in the preceding twelve months, five or more persons | ten or more persons, substituted for "more than fifty" by Karnataka Act No. 05 of 2026 | employs, or employed on any working day in the preceding twelve months, five or more persons |
| Expressly outside | none stated | an establishment of the Central or any State Government that is not a factory | none stated |
Does Coverage Stop When Headcount Falls?
Not immediately, and not on its own. Maharashtra's first proviso to section 2(4) keeps an establishment covered despite a later reduction below five. The second releases it after three continuous months below five, from the beginning of the following month. Cessation is automatic; the employer must then intimate it by registered post within one month.
The Explanation to the same sub-section matters. Where an establishment has branches or departments, in the same or different premises, all of them are parts of the same establishment, so headcount is counted across the establishment and not branch by branch. The same question arises under the EPF wage-ceiling rules.
What Is the Labour Welfare Fund, and Why Does It Differ by State?
The Labour Welfare Fund is a statutory pool funded jointly by the employee, the employer and the government, which a state welfare board spends on welfare activities for workers and their dependants outside the workplace.
Why Is the Delhi Figure So Much Smaller?
Because Delhi's text is frozen. Maharashtra and Delhi both descend from one 1953 Bombay enactment, while Karnataka legislated separately in 1965. Delhi received its version through Ministry of Home Affairs notification G.S.R. 1286(E) dated 15 December 1986, under section 2 of the Union Territories (Laws) Act, 1950, which extended the Bombay Act "as in force in the State of Maharashtra at the date of this notification".
Delhi therefore holds a snapshot of the Maharashtra text as it stood in December 1986. Maharashtra has amended its own Act repeatedly since and those amendments did not travel, so the same provision now reads ₹25 in Mumbai and 75 paise in Delhi. Tracing an obligation back to its parent enactment and extension instrument, in a statutory library such as LexComply's Lex Library, is the only reliable way to tell a stale figure from a current one.
What Happens If a Labour Welfare Fund Payment Is Missed?
A missed payment does not attract interest automatically. In Maharashtra and Delhi the Welfare Commissioner may serve a notice allowing not less than thirty days, and interest becomes payable only if the employer then fails to pay without sufficient cause. It is counted from the statutory due date, not from the notice.
| Stage | Maharashtra (section 6-B) | Delhi |
|---|---|---|
| Notice before any interest | not less than 30 days from service | not less than 30 days from service |
| First three months after the section 6BB(3) due date | 1.5% of the amount for each completed month | 1% of the amount for each completed month |
| Each completed month thereafter | 2% of the amount | 1.5% of the amount |
| Remission | Welfare Commissioner may remit the whole or any part, subject to prescribed conditions | Welfare Commissioner may remit the whole or any part, subject to prescribed conditions |
These rates diverge for the same reason the contributions do: Maharashtra raised its interest from 1% and 1.5% by Mah. 24 of 2003, and Delhi, holding the 1986 text, did not. Karnataka runs the same notice-then-interest scheme under section 7B, but inverted. Its notice may be not more than thirty days, where Maharashtra's must be not less than thirty. Its interest is also dearer: 12% per annum for the first three months and 18% thereafter.
What Else Can the Board Do to Recover It?
Interest is not the only cost. In all three states an unpaid sum is recoverable as an arrear of land revenue. Karnataka adds a prosecution: under section 17B a wilful contravention carries a fine up to ₹500 or three months' imprisonment for a first offence, and up to ₹1,000 or one year for later ones.
How Is the Labour Welfare Fund Obligation Tracked Across States?
Tracking it needs four facts per state: the enactment, the establishments it reaches, the register date, and the payment date with its exact preposition. A single national reminder cannot hold them.
Hold each state as a separate obligation with its own owner, evidence and due date, and re-check the rate when the source enactment moves. LexComply's global compliance management platform maps obligations to entities and locations and holds the evidence of each payment against the obligation it discharges, with the state labour rule sets maintained in LexComply's labour law module. The payment itself is made to the state welfare board, and the State Government sets the rate. The same multi-state discipline governs who is eligible for gratuity, which the Code on Social Security moved onto a single national rule on 21 November 2025.
Common Mistakes to Avoid
- Treating 15 July and 15 January as the last safe day in Maharashtra and Delhi. Both require payment "before the 15th day". Only Karnataka's section 7A(3) says "on or before", so only Karnataka's wording includes the 15th.
- Counting headcount branch by branch in Maharashtra. The Explanation to section 2(4) treats all branches and departments as parts of one establishment. Three offices of two people each are not three uncovered establishments.
- Assuming Karnataka's fifty-employee threshold still applies. Section 2(4)(iii) now reads "ten or more persons", where the old test was "more than fifty". An establishment of exactly ten is caught; one of exactly fifty previously was not.
- Reading Maharashtra's 30% escalation proviso as a cap on every figure. It caps the employee's rate, once in every three years. The employer's share sits outside it, because section 6BB(2)(b) fixes it at three times the employee's.
- Dropping out of the Maharashtra register as soon as headcount falls below five. Coverage ends only after three continuous months below five. It ends automatically, and the separate duty to intimate by registered post does not condition it.
- Applying the Maharashtra rate in Delhi because both descend from the Bombay Act of 1953. Delhi's text was frozen as at 15 December 1986 by notification G.S.R. 1286(E). Maharashtra's later amendments do not reach it.
Legal Disclaimer
This article is general information on Indian labour welfare fund legislation as at 9 October 2026 and is not legal advice. Rates, thresholds and due dates are set and revised by individual State Governments and Union territory administrations, so verify the current position with the relevant welfare board or a qualified adviser before acting.
