Fund for Labor Welfare

Fund for Labor Welfare

It is a fund that was set up with the intention of giving the establishment’s employees financial and social security. The only beneficiaries are the employees themselves, who will see improvements to their working conditions and living standards that will allow them to meet their basic needs.

The Labor Welfare Fund Act, which varies from state to state, provides facilities, benefits, and social programmes for workers on their soil. For instance, the “Karnataka labour welfare act” and the “Maharashtra labour welfare fund act” each have different provisions based on the socio-economic conditions that affect workers in those states.

Contributions from both the company and the employees go into the fund. The amount that each state gives varies. The Fund for Labor Welfare was created by the state government and is made up of the following parts:

• Penalties for workers
• Accumulation of unpaid debt
• Interest charges
• Charitable contributions
• Contributions from employers and employees
• Any interest accrued on delinquent balances or fines incurred by workers
• Loans and grants

The employer is also required to submit a statement outlining every facet of the donation made.

Maharashtra Labor Welfare Fund Act, 1953

The Maharashtra government passed the Labor Welfare Fund Act to offer welfare benefits to employees working in industries and companies there. An act to create a fund for financing labour welfare improvements in the state of Maharashtra as well as other goals. It encompasses the entire state of Maharashtra.

Together with the Maharashtra Labor Fund Act, 1953, the Maharashtra Labor Welfare Fund Rules, 1953, should be read. Depending on the type of worker and the amount of money they are paid, different contribution rates apply. In addition, while payments are provided annually for other states, they are made in June and December for states like Maharashtra, Gujarat, and Andhra Pradesh.

Unless they are employed in a managerial or supervisory position and receive a monthly salary of more than INR 3,500, any company that has at least 5 employees is required to make biannual contributions to the Maharashtra Labor Welfare Fund in the months of June and December each year on behalf of each of their employees, including contract labourers.

The Labor Welfare Fund, which is governed by a Welfare Commissioner, receives some funding from the government as well. For a code number, the employer must submit an application to the Welfare Commissioner of the Maharashtra Labor Welfare Board.

The Maharashtra State Government passed the Maharashtra Labor Welfare Fund Act in 1953 to offer social security to employees working for companies that have a labour welfare fund. The state administration is aware of the need to give aid to workers and their families, and in response, has established the Act.

The Act is essential because it offers immediate financial help to workers and their families in the case of significant injury or death. It also includes ways to file complaints against employers that disobey the Act’s rules.

These benefits are provided to employees who are unable to obtain medical assistance, education, housing, or travel reimbursement through their regular employment.

Objectives of the Maharashtra Labor Welfare Fund Act

Additionally, the Act creates the Maharashtra Labor Welfare Fund, which is run by the Maharashtra government and receives contributions from both employers and workers. The Act’s aims are as follows:

• To make provisions for penalising an employer or employee who makes a false statement or provides false information about his contribution;
• To protect employers’ and employees’ contributions to the Fund, as well as their payment into the Fund;
• In the event of permanent incapacity, any worker or their dependents will be entitled to a contributory disability pension.
• To provide welfare measures for the benefit of workers;
• To provide reliable reporting of contributions,
• To offer aid and amenities to employees during times of emergency brought on by natural disasters.

Applicability

Established in 1953, the Maharashtra Labor Welfare Fund covers all businesses in the state with five or more employees who are classified as contract workers under the Act. Any citizen who wants to open a brand new store or other type of business under the control of the Maharashtra government must comply with this.

This group covers all employees, including those hired through contractors, with the exception of those in managerial or supervisory roles earning more than Rs. 3,500/-per month.

Given that they are given through a communal contribution supported by the employee, the employer, who contributes three times the employee’s contribution, and the state government, these funds are categorised as fringe benefits.

Contribution

Contributions will be deducted from employees who are listed on the Muster lists on June 30 and December 31 of each year. The following rates will be used to deduct employees’ salaries from their pay twice a year, between June and December:

The contributions required of both the employer and the employee are as follows:

Unless they are managers or supervisors, a worker with a salary of up to Rs.

Rs. 18 from the employer; Rs. 6 from each employee; for a total contribution of Rs. 24.

employees, excluding managers and supervisors, who make more than Rs. 3,000 each month.

36 rupees for the employer; 12 rupees for each employee, for a total contribution of 48 rupees.

Payment of the Act’s contribution on a regular basis

According to Section 6 of the Act, the government, employees, proprietors, and the opposition all receive subsidies (MWF—Maharashtra Welfare Fund) every six months (June and December).

Two times a year, on the 15th of July (for the 30th of June ending) and the 15th of January, the Maharshtra Labor Welfare Fund makes payments (for the 31st of December ending). If paying by check, please mail your payment to the address below with a check made out to “Welfare Commissioner, Maharashtra Labor Welfare Board.”

Given that they are given through a communal contribution supported by the employee, the employer, who contributes three times the employee’s contribution, and the state government, these funds are categorised as fringe benefits.

Contribution payment

• The contribution paid by the employer and employee goes into the labour welfare fund and is reported to the board twice a year, on the 15th of July and the 15th of December, on FORM A-1.
• At the board’s request, the state government may adjust the contribution rates every three years.
• The company can deduct the contribution amount from the employees’ wages, and this deduction is considered an allowed deduction.
• The amount of the contribution (both employer and employee) should be paid in cash, money order, or cheque.
• The employer provides the contribution statement in FORM A-2 to the Welfare Commissioner by July 31st and December 31st.
• The state government receives the statement that the welfare commissioner has received.
• The state government may change the contribution rates every three years at the Board’s request.
• The employer is permitted to deduct the contribution amount from employees’ earnings, and this deduction is regarded as legal.

The employer must submit the contribution statement on FORM A-2 to the welfare commissioner by July 31 and December 31. The state government must then receive the statement that the welfare commissioner has received. The contribution amount (both employer and employee) must be paid in cash, money orders, or checks.

Unpaid Accumulations

Unpaid salary and gratuities that an employer was required to pay employees but failed to do so within three years of the due date are known as unpaid accumulations. Transferring unpaid accumulations to the welfare board is the responsibility of the employer.

Employers are required by Section 2 of the Act to deposit unpaid accumulations with the Maharashtra Labor Welfare Board if an employee’s wage is not paid for any reason and is not claimed by the employee or any of his legal heirs (in the event of his death) within three years of the date on which it became due. (10)

The Maharashtra Labor Welfare Board will receive the liability in relation to the aforementioned accumulation in the form of a demand draught or check together with the following summary of unpaid accumulations (payments owed to employees but not made within three years of the date they became due):

No such sum must be deposited and no pertinent statement of unclaimed accumulation needs to be submitted to the Board if there is no unpaid accumulation as defined in Section 2(10).

For workers who have gone three years without pay, the unclaimed accumulation must be deposited with the Welfare Commissioner. Unpaid accumulations and a list of the employees for whom they are owing must be deposited on Form A-1.

Provision relating to the payment of fines and of unpaid accumulations by employers

1) If, within 15 days of the act’s effective date in any region, every employer in that area pays to the Welfare Commissioner by check, money order, or cash:

1. a) All fines collected from employees prior to the effective date but unutilized as of that date, and
2. (b) On the aforementioned date, the employer held all unpaid accumulations.

2). Along with the payment, the employer must provide a statement to the Welfare Commissioner detailing the amount paid in detail.

3) Thereafter, on or before the 15th of April, 15th of July, 15th of October, and 15th of January succeeding such quarter, all fines collected from employees and all unpaid accumulations shall be paid by the employer to the welfare commissioner in the manner aforesaid, and a statement giving particulars of the amounts so paid shall be submitted by him to the Welfare Commissioner along with such payment.

3-A) The employer must submit a statement of employer contribution and employee contribution on Form “A1” to the Welfare Commissioner on or before July 31st and January 31st, respectively, for employees whose names are in the establishment register on June 30th and December 31st.

The Welfare Commissioner may serve a notice on any employer to pay any portion of fines realised from employees or unpaid held by him that the employer has not paid in accordance with rule 3 after making such inquiries as he deems necessary and after calling for a report from the inspector, if necessary. The employer must respond to the notice within 14 days of receiving it.

Any person who willfully obstructs the inspector while exercising his powers or performing his duties under the act, or who fails to produce the documents demanded by the inspector, shall be punished as follows:

1. a) For the first offense, imprisonment for up to three months or a fine of up to Rs.500, or both;
2. b) for the second offense, imprisonment for up to six months or a fine of Rs.500, or both; and
3. c) If the individual

1) If, within 15 days after the date on which the act becomes operative in any region, each employer in that region pays the Welfare Commissioner by check, money order, or cash:

The employer held all unpaid accumulations on the aforementioned date. a) All unutilized penalties collected from employees prior to the effective dateb)

2) The employer is required to give the Welfare Commissioner a statement outlining the amount paid in full along with the payment.

3) Following that, the employer must pay the welfare commissioner all fines received from employees on or before the 15th of April, 15th of July, 15th of October, and 15th of January following such quarter in the manner described above.He must give the Welfare Commissioner a declaration with specifics on the amounts paid in addition to the payment.

3-A) For employees whose names are in the establishment record on June 30 and December 31 respectively, the employer shall submit a statement of employer contribution and employee contribution on Form “A1” to the Welfare Commissioner on or before those dates.

The welfare commissioner may, following any investigations he considers appropriate and, if required, calling for a report from the inspector, serve a notice on any employer to pay any share of penalties realised from employees or unpaid held by him that the employer has not paid in accordance with rule 3. The employer is required to answer the notice within 14 days of receiving it.

Anyone who wilfully hinders the inspector from using his or her authority or completing their obligations under the act, or who refuses to provide the papers the inspector requests, shall be punished as follows:

If it is a second offence, imprisonment for a term up to 6 months or a fine up to Rs 500, or both. If it is a first offence, a term of up to 3 months of imprisonment, a fine up to Rs 500, or both.

The purpose of the Maharashtra Labor Welfare Fund Act

The Maharashtra State Government passed the Maharashtra Labor Welfare Fund Act in 1953. The Act entered into force on December 15, 1959, with the goal of fostering industrial harmony by creating a fund for worker welfare and providing financial assistance.

The Act’s objectives are to: -provide care and financial assistance to such workers and their families in old age or when they become disabled due to illness or injury; -provide benefits from the welfare fund to workers employed in any industry or employment other than work contract services; -provide rehabilitation assistance and financial assistance in case of accidents and deaths occurring during working hours or otherwise in connection with their employment; -provide adequate medical assistance and medical relief in other circumstances for such workers and their families; and -generally take care of items connected to or incidental to the protection and welfare of such workers. Emergencies render such workers powerless

Key Takeaways

• In the state of Maharashtra, a fund was established by the Maharashtra Labor Welfare Fund Act of 1953 for the purpose of funding projects that advance labour welfare. For this reason, the employer is required to deduct a contribution amount from each employee covered by the Act and submit it to the labour welfare fund in addition to making its own payment for each employee covered by the Act. Code numbers are provided to employers for this reason. This Act proves that the government is concerned about its citizens and will do everything in its power to ensure their wellbeing. The Act will be put into effect throughout Maharashtra, giving workers hope that they will receive their pay on time and that their living conditions will improve.
• The objective is to foster cooperation between governmental organisations, employers’ organisations, trade union organisations, and voluntary organisations.
• The MLWFA intends to achieve its goals by assisting unemployed people, workers who have been injured on the job, their dependents, and other people in need.
• The MLWFA works with organisations to maintain worker-employer harmony; to promote greater cultural exchange between India and other nations through international conventions convened by the International Labor Organization; and to engage in any other documentary or welfare activity incidental or conducive to achieving the above objectives. Through specialised programmes funded by grants from government organisations, corporate groups, or individuals with state government approval, it is also utilised to increase skills, training, and research in the field of labour welfare.