The Government of Karnataka has published the Karnataka Labour Welfare Fund (Amendment) Act, 2025, which introduces changes to employer eligibility and payment procedures. These changes are effective immediately as of January 7, 2026.
1. Expansion of Applicability (Employee Threshold)
The amendment broadens the scope of establishments required to contribute to the fund:
- New Threshold: All establishments employing 10 or more persons are now legally mandated to contribute.
- Previous Threshold: This requirement formerly applied only to establishments with more than 50 employees.
2. Mandatory Digital Payments
Physical cheques are no longer accepted for fund contributions. All payments must be processed electronically via – UPI, NEFT, RTGS, Net Banking or Demand Drafts.
The new requirements apply to the 2026 calendar year returns, which are due in January 2027.
For establishments already registered and covered under the LWF Enactment, no registration action is required.