Maharashtra Kamgar Kalyan Nidhi Adhiniyam, 1953: Applicability and Contribution Rates

The Maharashtra Kamgar Kalyan Nidhi Adhiniyam, 1953 (Maharashtra Labour Welfare Fund Act) is a state-specific welfare law that applies to certain establishments in Maharashtra. Employers often confuse it with central welfare laws, leading to compliance gaps and potential penalties.

Which Industries Does the Act Apply To?

The Act applies to three categories of establishments in Maharashtra :

Category	Legal Basis	Threshold
Factories	Factories Act, 1948	Any factory registered under the Act
Shops and Establishments	Bombay Shops and Establishments Act, 1948	Minimum 5 employees
Motor Transport Undertakings	Motor Transport Workers Act, 1961	Registered establishments

The definition of “establishment” under Section 2(4) of the Act expressly includes “a tramway or motor omnibus service or a motor transport undertaking to which the Motor Transport Workers Act, 1961 applies”. This is a direct statutory provision, not a judicial interpretation.

The Act applies only if the establishment is located in the State of Maharashtra. It does not apply to establishments in other states, even if they have the same parent company.

Important: The threshold for shops and establishments was reduced from 10 to 5 employees by the Maharashtra 4 of 1984 amendment, and this lower threshold has been confirmed by subsequent judicial decisions . The proviso to Section 2(4) clarifies that once the threshold is met, the establishment continues to be covered even if employee numbers subsequently fall below 5, unless the numbers remain below 5 for a continuous period of three months .

Who Is Excluded?

Not all workers are covered. Section 2(2) of the Act excludes :

Persons employed mainly in a managerial capacity
Persons employed in a supervisory capacity drawing wages exceeding ₹3,500 per month, or exercising functions mainly of a managerial nature
Persons employed as apprentices under the Apprentices Act, 1961

The Contribution Rates: What Changed in 2024?

The contribution rates were revised through the Maharashtra Labour Welfare Fund (Amendment) Act, 2024, which was introduced in the Maharashtra Legislative Assembly on March 1, 2024 .

The contribution structure is tripartite :

Contributor	Old Rate (per half-year)	New Rate (per half-year)
Employee	₹6 (if wage < ₹3,000/month); ₹12 (if wage > ₹3,000/month)	₹25 (flat rate for all employees)
Employer	3x employee contribution (₹36 for higher slab)	₹75 (3x employee contribution)
State Government	2x employee contribution (₹24 for higher slab)	₹50 (2x employee contribution)

The key changes are:

Flat Employee Contribution: The wage-linked contribution slabs were eliminated. All employees, regardless of wage, now contribute ₹25 per half-year .
Employer Contribution: The employer’s contribution increased from ₹36 to ₹75 per half-year per employee .
Government Contribution: The state government’s contribution is twice the employee’s contribution, i.e., ₹50 per half-year per employee .

Payment Schedule: Employers must pay both the employer’s and employee’s contributions to the Board before the 15th day of July and the 15th day of January for the preceding six-month periods ending June 30 and December 31, respectively .

Employer Obligations

Employers must :

Register with the Maharashtra Labour Welfare Board
Deduct the employee’s contribution from wages (permitted by law, and deemed a deduction authorised under the Payment of Wages Act, 1936)
Deposit the employer’s contribution along with the employee’s contribution to the Board by the prescribed due dates
Submit returns on prescribed forms
Maintain records as required

Important: The employer cannot deduct their share of the contribution from the employee’s wages under any circumstances. The employer’s contribution must be borne by the employer alone . The employee’s contribution is deducted from the wages for the months of June and December only. If deducted in error for other months, the deduction is not permitted .

Penalties for Non-Compliance

Failure to comply with the Act attracts:

Recovery of arrears: Arrears are recoverable with interest
Prosecution: Under Section 11 of the Act
Penalties: As prescribed under the Act

The Welfare Commissioner, appointed under Section 11, is responsible for ensuring compliance with the Act and rules .

The Bottom Line

The Maharashtra Kamgar Kalyan Nidhi Adhiniyam, 1953 applies to factories, shops/establishments with 5+ employees, and motor transport undertakings in Maharashtra. The contribution rates are ₹25 (employee), ₹75 (employer), and ₹50 (state government) per half-year. The Act covers all workers except those in managerial roles, supervisory staff drawing wages exceeding ₹3,500 per month, and apprentices. Non-compliance results in statutory recovery proceedings and penalties under the Act.

DISCLAIMER: This content is for educational and informational purposes only, based on available Central and State notifications as of August 2026. It is not formal legal counsel. Please consult a qualified lawyer for advice tailored to your establishment’s specific operations.