This article is written by Divya Kathuria, a student of Raffles University

It is must to know how the welfare boards throughout the Country work and some are governed by the statutes by State Legislatures and Karnataka too is one of them and enacted Labour Welfare Funds Act in 1965. The board was mainly established to take over the various Labour welfare Centres all over the State under governmental control. It seeks to promote the welfare of labour and their dependents by providing for the constitution of a Fund for financing and conducting activities to promote welfare of labour in the State.

Constitution of Welfare Fund

The State government will constitute a welfare fund  in which all the unpaid accumulations by the employers all over the State must be paid to the Welfare Board. This fund will consist of all the fines realized from the employees, all the unpaid accumulations transferred to the board under Section 7 of the Act, the contributions made to the board, any penal interest, voluntary donations and any amount of sum borrowed. There are rules under the Act to collect all these amounts via various agencies and the manner of auditing is also prescribed therein. The Board is a corporate body by the name of Karnataka Labour Welfare Board and is thus, a legal entity. The Chairman of the board will be an independent member elected by all the other members of the Board. Conditions for disqualification of members are also prescribed under the statute itself.


The claims are settled in the manner as provided by Section 7. As per this section, all the unpaid accumulations are deemed as abandoned property. It will discharge the liability of the employer to make payment to the employee to the extent he has paid to the Board. As soon as the Board receives any unpaid accumulation from any employer, it has the statutory duty to exhibit a notice on the notice board of the establishment (in which the accumulation is paid), publish the same in official gazette and in the two newspapers circulating in the area where establishment is located inviting claims from the employees if any payment is due to them. This notice is exhibited every year in the month of June and December for continuous three years from the date of the payment of the unpaid accumulation. If any claim is received within the first four years from the date of the first notice published in respect of such claim, the Board is obligated to transfer the claim to the authority appointed under Section 15 of the Payment of Wages Act, 1936[1] having the jurisdiction in the area of location of establishment and then, the authority will handle and adjudicate the claim and order the Welfare Board accordingly. However, the Board cannot be asked to pay more than the unpaid accumulation paid to it initially.

Once the claim to the claimant is refused, he has the right to appeal to the District Court having jurisdiction over that particular area and board must comply with the order made by appellate authority. An appeal will lie only till a period of sixty days. The decision of the authority or the district Court will be final. If no claim is made in the specified period or if the claim is refused by the said authority as well as in appeal (if made) then, the unpaid accumulations in respect of such claim would accrue and vest in the State as ownerless goods and are deemed to be transferred to form the part of the welfare fund. The fund will vest in the board and be held by the board as trustees and may use it for any purpose specified in Section 8(2).


As per Section 7A of the Act, an employer and an employee are required to make labour welfare contributions to the Karnataka Labour Welfare Fund at specified rates that is, the calculation of KLWB is done through the contribution of company as well as the labourer.
he Employers are required to pay contribution by 15th January every year at the rate of 6:12 ie., employee:employer by deducting Rs.6/- from the employee and employers contribution of Rs.12/-. Also the employer is required to deposit the unpaid accumulations, like unpaid bonus, wages after three years of their becoming due. Further the penalty and fines are to be paid to the fund immediately. Under the Act, the employee, employer and the State Government have to contribute at the rate of 3:6:3 respectively, per employee per annum. The payments to the fund may be made through S.B.I. account No.30428019173 and the same bank slip (ie., Challan) along with Form-D[2] of the Board.

Dues and penalty

Any person who is convicted of contravening any of the provision under this act or rules made under it or who obstructs the inspector deliberately in discharging his duties under the act or rules or fails to produce any material necessary for inspection like register of records and documents can be imposed a fine which may extend up to five hundred rupees for committing the offence for the very first time. In case of subsequent or second time offence, with fine which may extend to one thousand rupees or with imprisonment for a term which may extend to one year or with both.

The offence under this Act cannot be tried by any court inferior than that of a 1st class Judicial Magistrate and cognizance can be taken only by the complaint of an inspector.

Form D under the Act can be accessed here:

Rules under the Act can be accessed here:

[1] 15. Claims arising out of deductions from wages or delay in payment of wages and penalty for malicious or vexatious claims.


Please enter your comment!
Please enter your name here