Construction Workers Covered Under ESIC? - Esic Act

Narayana Swamy R Started The Discussion:

Dear Sir,

Kindly for ward your opinion whether ESIC Act is applicable to the construction workers ( contract labours) who performed the work only limited period i.e. 5 to 10 days in a month or not more than 3 months in a year( 30 days).since the establishment is covered under the aforesaid act and concerned authorities are insisting for coverage.


Dear Narayanswamy,

In general the ESI ACT is not applicable to Construction workers or industry. However, now a days on case to case basis the ESIC authorities are covering the construction industry also into ESI Act.


To this effect ESIC instruction 4/99 casts:
References have been received from Regional Directors seeking clarification regarding coverage of construction agencies/offices of builders particularly on the point as to whether the construction workers working in the construction sites are to be taken into consideration for the purpose of the coverage of the construction agencies/offices of builders under Section 1(5) of the ESI Act as a ‘shop’.

The matter was examined at Hqrs. Office and it is informed that it has been the policy of the ESI Corporation not to cover the workers engaged by the construction agency who belong to the unorganized sector due to the peculiar characteristics of the construction industry and the peculiar nature of employment of workers engaged in it. In construction industry the work is carried out through the construction workers at the construction sites where the projects are situated. The workers engaged in it are mobile and migratory in nature. The criteria and duration of employment also vary from the work to work. Due to the nature of employment and the nature of work place involving the construction workers, enforcement of the ESI Act in respect of such workers and organizing Medical and other facilities for them which are normally available under the ESI scheme will be difficult. Therefore the existing scheme under the ESI Act is neither applicable nor workers engaged in construction sites. Hence, the following actions may please be taken for coverage of construction agency/offices of the Builders:-
  • Such construction agencies which are employing 20 or more persons in their offices and the offices are situated in implemented areas are coverable under the Scheme. However, it may be ensured that the criterion of 20 or more persons is applicable to such employees only who are coverable under Section 2(9) of the ESI Act.
  • Such workers who are engaged by construction agencies and are working on the site of the project should not be considered for the purpose of coverage of an establishment dealing with construction activities.
  • Such construction workers are to be taken into consideration for coverage under Section 2(9) as ‘employee’ who are engaged directly in a covered factory by the principal employer or through an immediate employer.
  • Only employees of the construction agencies who are posted in the office are to be taken into consideration for the coverage of the unit.
  • Some of the regular employees of the construction agencies mostly technical staff such as Engineers, Supervisors etc. who are regular employees of the construction agency but are normally sent to the work-site periodically, are to be taken into account for the purpose of coverage of the establishment under Section 1(5).
In respect of those employees who are though regular employees of the construction Agency but remain on tour at the Site(s) of the construction in non-implemented areas for a period of more than 7 months in a year, contribution may not be charged subject to the employer seeking exemption under Section 88 of the ESI Act in respect of those employees.

Sunil Sethi

Dear sir

I am working in a construction Company , undertaking construction works in a Industrial projects (where factory act is applicable) . Will ESI ACT is applicable to Employees on rolls of the Construction company whoes salary is below 10000 .

Dear Viswanath,

Plz go through the explanatory note on the applicability of ESI Act on construction industry by Sh Sunil Sethi for your query.


Sr. Associate
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)


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