The Labour Welfare Fund (LWF) is a statutory mechanism implemented by several Indian states to promote the economic and social well-being of workers. In Kerala, the LWF for employees in the commercial sector is governed by the Kerala Shops and Commercial Establishments Workers Welfare Fund Act, 2006, along with the Scheme of 2007.
This article outlines key compliance requirements for employers in Kerala, including eligibility, contribution details, and filing procedures to help businesses stay compliant and support employee welfare.
One Partner for All HR Solutions across PAN India
From HRMS & Payroll to Compliance & Labour Law,
From Contract Staffing to All Corporate Insurance,
we’ve got you covered.
📞 Need support? Let’s talk.
Tap to connect with India’s trusted HR & Compliance experts.
Click Here
What Is the Labour Welfare Fund?
The LWF is a statutory contribution-based fund designed to finance welfare initiatives for employees. The fund is administered by the Kerala Shops and Commercial Establishments Workers Welfare Fund Board and is used to deliver:
- Financial aid during illness or emergencies
- Educational assistance for workers’ children
- Retirement and pension benefits
- Housing and medical aid
- Skill development and training support
The scheme is particularly focused on improving the quality of life for employees in Kerala’s vibrant service, trade, and retail sectors.
Applicability of the Kerala LWF
As per the current scheme, LWF compliance in Kerala is mandatory for:
- Every employer or establishment employing one or more employees, as covered under the Kerala Shops and Commercial Establishments Act, 1960.
This includes retail shops, commercial offices, service centers, and other business entities functioning within the state.
Contribution Details – Monthly Structure
Kerala follows a monthly contribution model, where both employer and employee are required to make equal contributions.
| Category | Employee Contribution | Employer Contribution | Total Contribution | Deduction Date | Submission Deadline |
| All employees under the Kerala Shops and Commercial Establishments Act | ₹50.00 | ₹50.00 | ₹100.00 | Monthly | 5th of Every Month |
Employers are responsible for deducting ₹50 from each employee’s salary and contributing an additional ₹50 on behalf of the establishment. The total contribution of ₹100 per employee must be submitted by the 5th of each month.
Forms & Filing Process
Mandatory Forms:
- Form 6 (.docx) – Employee-wise details for contribution
- Form 5 (.xlsx) – Consolidated contribution summary
These forms must be submitted to the Kerala Shops and Commercial Establishments Workers Welfare Fund Board along with the monthly contribution.
Official Website:
Employers should maintain detailed payroll records, contribution registers, and proof of payments for compliance audits and inspections.
- Group Personal Accident Insurance in India – A Complete HR Guide
- Abhijit Bhaduri: The Story of an HR Who Became a Unicorn
- EPFO Mandates Employers to Public Display of Form 5A: (by Oct 22, 2025)
- EPFO Revamped ECR Rollout (Effective Sept 2025 Payroll)
- Prabir Jha: The Maverick CHRO Across Fortune 500 Giants
Benefits to Employees
The Kerala Labour Welfare Fund offers an extensive set of benefits to eligible workers, including:
- Pension and retirement assistance
- Financial help for treatment of critical illness
- Maternity support and education grants
- Marriage assistance
- Assistance during natural calamities or family hardship
These schemes help ensure economic security and improve the living standards of workers across the state.
Non-Compliance Consequences
Non-compliance with Kerala’s LWF regulations may lead to:
- Penalties or fines under the Act
- Legal proceedings
- Suspension or denial of business renewals and licenses
- Reputational risk in dealing with labour authorities
Employers are encouraged to automate monthly deductions and ensure timely filing to stay on the right side of the law.
Simplify Kerala LWF Compliance with Expert Support
Struggling to manage monthly filings and documentation? We can help you:
- Automate payroll-based deductions
- Prepare and file Forms 5 and 6
- Track submissions and maintain compliance
- Manage LWF across multiple states and formats
Reach out today for end-to-end support on Kerala LWF compliance.
One Partner for All HR Solutions across PAN India
From HRMS & Payroll to Compliance & Labour Law,
From Contract Staffing to All Corporate Insurance,
we’ve got you covered.
📞 Need support? Let’s talk.
Tap to connect with India’s trusted HR & Compliance experts.
Click Here
