All three: each worker pays ₹20 a year, the employer ₹40 for that worker, and the State Government ₹20, under the Tamil Nadu Labour Welfare Fund Act 1972 at the rates the Labour Welfare Board publishes. It covers factories, plantations, motor transport undertakings, and shops and commercial establishments of five or more. The Act defines the employer as whoever controls the establishment, which matters for a contract crew.
How much, and from whom
₹80 a year for each eligible worker, split three ways. Section 15(1) of the Act, as substituted by the Tamil Nadu Labour Welfare Fund (Amendment) Act 2021, sets ceilings and leaves the actual amounts to be prescribed: an employee contributes "a sum not exceeding fifty rupees", the employer up to one hundred rupees for each employee, and the Government up to fifty.
| Contributor | Rate per employee per year | Ceiling under s.15(1) as amended in 2021 |
|---|---|---|
| Employee | ₹20 | ₹50 |
| Employer | ₹40 | ₹100 |
| State Government | ₹20 | ₹50 |
The rates in the table are the ones the Tamil Nadu Labour Welfare Board publishes as the current contribution [VERIFY: number and date of the Government Order fixing the ₹20 / ₹40 / ₹20 rates]. Section 15(2) lets the employer recover the employee's share by deduction from wages, and Tamil Nadu's draft wage slip under the Code on Wages rules carries a separate deduction line for the Labour Welfare Fund. The contribution is annual; the deduction is commonly made from December's wages and remitted by 31 January [VERIFY: the rule and date under the Tamil Nadu Labour Welfare Fund Rules 1973].
Who counts as an employee
Almost everyone on the floor who has worked thirty days in the past year. Section 2(b) defines an employee as any person employed "for hire or reward" to do skilled, unskilled, manual, supervisory, clerical or technical work in an establishment for thirty days during the preceding twelve months. It leaves out anyone employed mainly in a managerial capacity, a supervisor drawing more than ₹15,000 a month (the limit since the 2018 amendment), and apprentices and part-time employees.
The establishments covered are listed in section 2(d) and summarised by the Board: all factories, plantations and motor transport undertakings, and shops, commercial and catering establishments employing five or more. The factory limb still refers to the Factories Act 1948, which the OSH Code 2020 repealed from 21 November 2025; how that reference now reads is a point for counsel [VERIFY: whether the State has amended the definition].
The contractor or the site
The Act's definition points at the site. Section 2(c) says the employer is "a person who has the ultimate control over the affairs of the establishment", or the manager to whom those affairs are entrusted, and nothing in the definition of employee turns on who pays the worker. A contract worker who has put in thirty days in the establishment is, on the Act's own words, an employee of that establishment for this purpose, with the site as the employer liable for the contribution [VERIFY: Board practice on whether contractors register and remit separately for their crews].
Where a contractor also registers and remits, the risk is that the crew is paid for twice, or by neither party on the assumption the other did. Who remits for the contract crew on a given engagement is for the contract to settle and for counsel to confirm against the Act. What a site cannot do is assume the crew is outside the count because it is on someone else's payroll.
Where unpaid wages end up
In the Fund, after three years. Section 2(i) defines an "unpaid accumulation" as any payment other than gratuity due to an employee but not paid within three years of falling due, and section 3(1) requires all unpaid accumulations to be paid to the Board. Under section 13, paying an accumulation to the Board discharges the employer to that extent, and the Board must display a notice on the establishment's notice board and publish one in the Gazette inviting claims.
For a contract workforce with real churn this is not academic. A worker who leaves without collecting a final settlement, or whose leave encashment is never paid, leaves an amount that after three years belongs with the Board rather than sitting in the contractor's or the site's books. Any sum payable to the Board is recoverable as an arrear of land revenue (s.28).
In money the contribution is small. A site with 120 eligible workers, direct and contract, owes ₹4,800 a year as employer and deducts ₹2,400 from the workers, against the State's ₹2,400. The exposure is not the amount but the record: failing to produce registers or documents to an Inspector, or to comply with the Board's directions, is an offence carrying up to three months' imprisonment or a fine of up to ₹500, and six months or ₹1,000 for a repeat (ss.29 and 34).
What a site should check
- Registration on the Board's portal. The Board takes establishment registration and contributions online through its LWMIS portal.
- One count, agreed with the contractor. Every worker with thirty days in the year, direct and contract, less the exclusions, with a written decision on who remits for the contract crew.
- The wage-slip line. The employee's ₹20 should appear once, as a Labour Welfare Fund deduction, and not be repeated by both payrolls.
- Old unpaid dues. Final settlements and other payments still owed after three years belong with the Board, with a record of what was paid over.
How Velura Services helps
Velura deducts the worker's share, pays the employer's share and files the Tamil Nadu Labour Welfare Fund return for every eligible worker in our crews. The contribution appears on wage slips and in our monthly report, so you can confirm it was paid.
Sources
- The Tamil Nadu Labour Welfare Fund Act, 1972 (Tamil Nadu Act 36 of 1972), with amendments including Acts 8 of 2018 and 22 of 2021, compiled by PRS Legislative Research — s.2(b) (employee; thirty days; exclusions; ₹15,000 supervisory limit), s.2(c) (employer), s.2(d) (establishment), s.2(i) and s.3 (unpaid accumulations), s.13 (claims to unpaid accumulations), s.15 (contributions; ceilings as substituted in 2021; deduction from wages), s.28 (recovery as arrears of land revenue), ss.29 and 34 (penalties). Opened and read from the scanned Gazette text [VERIFY: against the Tamil Nadu Government Gazette].
- Tamil Nadu Labour Welfare Board, Source of Fund — rate of contribution per employee: employee ₹20, employer ₹40, Government ₹20; unpaid accumulations, court fines and compounding fees also credited to the Fund. Opened and read.
- Tamil Nadu Labour Welfare Board, Applicability of the Act — factories, plantations, motor transport undertakings, and shops, commercial and catering establishments of five or more; workers employed at least thirty days in a year, excluding apprentices and trainees. Opened and read.
- Code on Wages (Tamil Nadu) Rules, 2022 (draft), G.O. Ms. No. 36, 11 April 2022 — Form V wage slip, with a deduction line for the TNLW Fund. Opened and read. Draft only.