Building Workers as Beneficiaries and the Welfare Fund

The upper limit is sixty, which is also the age at which the Board pays a pension under section 7(6)(b).

The ninety days need not be with one employer. The section asks whether he was engaged in any building or other construction work, which is what makes the scheme work for a mobile workforce.

Section 107: when the status ends, and what survives it

Section 107(1), cessation. A registered building worker ceases to be a beneficiary:

• when he attains the age of sixty years; or
• when he is not engaged in building or other construction work for not less than ninety days in a year.

The proviso, and it matters. In computing that period of ninety days, there shall be excluded any period of absence from building or other construction work due to any personal injury caused to the building worker by accident arising out of and in the course of his employment.

That proviso is the humane provision in this Chapter and it answers an obvious injustice. A worker injured on a site would otherwise lose his beneficiary status precisely because the injury kept him off work, at the very moment he needs the Board most. The time lost to an employment injury simply does not count.

Section 107(2), benefits after sixty. Notwithstanding sub-section (1), if a person had been a beneficiary for at least three years continuously immediately before attaining sixty, he is eligible to get such benefits as the Central Government prescribes.

The Explanation, portability. In computing that three year period as a beneficiary registered with one Building Workers' Welfare Board, there shall be added any period for which the person had been a beneficiary registered with any other such Board immediately before his registration with the present one.

The Explanation is the migration provision. A worker who spent two years registered in Bihar and one in Maharashtra has three continuous years, not one. Without it, the workers who move most, who are the poorest, would qualify least.

Section 108: the Welfare Fund

Section 108(1), what goes in. A Building Workers' Welfare Board shall constitute a fund called the Building and Other Construction Workers' Welfare Fund, to which shall be credited:

• (a) the amount of any cess levied under section 100(1);
• (b) any grants and loans made to the Board by the Central Government; and
• (c) all sums received by the Board from such other sources as the Central Government may decide.

Section 108(2), what comes out. The Fund is applied to meet:

• (a) the expenses of the Board in discharging its functions under section 7(6), that is the ten welfare functions including death and disability benefits, pension at sixty, group insurance premium, educational schemes, medical expenses for major ailments, maternity benefit, skill development, transit accommodation and hostels;
• (b) the salaries, allowances and other remuneration of the members, officers and other employees of the Board; and
• (c) expenses on objects and for purposes authorised by the Code.

Section 108(3), the cap on overheads. Learn this figure. No Building Workers' Welfare Board shall, in any financial year, incur expenses towards salaries, allowances and other remuneration to its members, officers and other employees, and for meeting other administrative expenses, exceeding five per cent of its total expenses during that financial year.

Section 108(3) is the most quotable provision in the Chapter and it is a direct answer to a real problem: welfare boards that collect cess and spend it on themselves. Ninety-five per cent of what a Board spends must go on something other than running the Board.

A worked example

Sadiq is a mason. He turned eighteen in January 2026 and has worked on construction sites in and around Nagpur for about eight months of the past year, for four different contractors.

Can he be registered? Yes, and he is entitled to be. He has completed eighteen and not sixty, and has been engaged in building or other construction work for not less than ninety days during the preceding twelve months. Section 106 says he shall be registered by the officer authorised by the Board.

Does it matter that he worked for four contractors? No. Section 106 asks only whether he was engaged in any building or other construction work.

What does registration give him? Access to the Board's benefits under section 7(6), paid out of the Welfare Fund under section 108(2)(a): death and disability benefits, pension at sixty, group insurance, educational schemes for his children, medical expenses for major ailments, maternity benefit for a woman beneficiary, skill development, and transit accommodation.

Two years later he is injured on a site and cannot work for seven months. In that year he works only sixty days.

Does he lose his status? No. Section 107(1) would end it if he were not engaged in building work for not less than ninety days in a year, but the proviso excludes any period of absence due to a personal injury caused by accident arising out of and in the course of his employment. The seven months do not count against him.

Suppose instead he simply left the trade for a year to drive a taxi. He then ceases to be a beneficiary under section 107(1), because there is no exclusion for absence unconnected with an employment injury.

Sadiq moves to Gujarat after twenty years and registers with that State's Board. Two years later he turns sixty. Has he been a beneficiary for three continuous years immediately before attaining sixty, as section 107(2) requires? By the Explanation, the period he was registered with the Maharashtra Board immediately before registering in Gujarat is added, so yes, and he is eligible for such benefits as the Central Government prescribes even after ceasing to be a beneficiary at sixty.

Where does the money come from? The Welfare Fund under section 108(1): the cess under section 100(1), grants and loans from the Central Government, and sums from other sources the Central Government decides.

The Board wants to spend a quarter of its budget on staff and offices. It cannot. Section 108(3) caps salaries, allowances, other remuneration and other administrative expenses at five per cent of the Board's total expenses in that financial year.

What this does NOT mean

Registration is not a favour. Section 106 says a qualifying worker shall be registered.

Registration does not depend on an employer. The ninety days may be spread across any number of employers, and the entitlement runs against the Board.

Cessation at sixty is not the end of everything. Section 107(2) preserves prescribed benefits for a person who was a beneficiary for three continuous years immediately before sixty.

The three year period is not lost by moving States. The Explanation to section 107(2) adds time registered with any other Board immediately before.

The Fund is not the Board's general revenue. Section 108(2) states the three heads it may be applied to, and section 108(3) caps administrative spending at five per cent.

Limits and criticism

Everything turns on registration, and registration is a bureaucratic act. A worker who does not know the Board exists, or cannot document ninety days of casual work, is outside the scheme entirely, no matter how much cess his sites generated. This is the standard criticism of the construction welfare scheme and it is the point to make in an essay.

Ninety days a year is a real hurdle for a seasonal worker, and the only excluded absence is one caused by an employment injury. Illness, unemployment and family emergency all count against him.

Section 107(2) leaves the post-sixty benefits entirely to be prescribed. The section confers eligibility for benefits it does not name.

The five per cent cap in section 108(3) is measured against total expenses, so a Board which spends little on benefits may lawfully spend little on administration and still leave a large unspent fund. The cap limits the ratio, not the hoarding.

Quick revision

• Section 106: every building worker who has completed eighteen but not sixty, and has been engaged in any building or other construction work for not less than ninety days in the preceding twelve months, shall be registered by the officer authorised by the Building Workers' Welfare Board.
• Section 107(1): cessation at sixty, or on not being engaged in building work for not less than ninety days in a year. Proviso: absence caused by an employment injury is excluded from that computation.
• Section 107(2): a person who was a beneficiary for three continuous years immediately before sixty remains eligible for prescribed benefits. Explanation: time as a beneficiary with any other Board immediately before is added.
• Section 108(1): the Building and Other Construction Workers' Welfare Fund receives the cess, Central Government grants and loans, and sums from other sources the Central Government decides.
• Section 108(2): applied to the Board's section 7(6) functions, the pay of its members, officers and employees, and objects and purposes authorised by the Code.
• Section 108(3): salaries, allowances, other remuneration and administrative expenses must not exceed five per cent of the Board's total expenses in a financial year.

Test yourself

1. State the three conditions for registration as a beneficiary. The building worker must have completed eighteen years of age, must not have completed sixty, and must have been engaged in any building or other construction work for not less than ninety days during the preceding twelve months: section 106.

2. A registered worker is off site for six months after an accident at work and does only seventy days that year. Does he cease to be a beneficiary? No. The proviso to section 107(1) excludes from the computation of the ninety days any period of absence from building or other construction work due to a personal injury caused to him by accident arising out of and in the course of his employment.

3. What happens to a beneficiary when he turns sixty? He ceases to be a beneficiary under section 107(1). But under section 107(2), if he had been a beneficiary for at least three years continuously immediately before attaining sixty, he remains eligible for such benefits as the Central Government prescribes.

4. A worker was registered in one State for two years and then in another for one year before turning sixty. Does he satisfy the three year test? Yes. The Explanation to section 107(2) requires the period for which he was a beneficiary registered with any other such Board immediately before his present registration to be added.

5. Name the three sources of the Welfare Fund. The cess levied under section 100(1); grants and loans made to the Board by the Central Government; and all sums received by the Board from such other sources as the Central Government may decide: section 108(1).

6. How much of a Board's expenditure may go on itself? Not more than five per cent of its total expenses in that financial year, counting salaries, allowances and other remuneration of members, officers and employees together with other administrative expenses: section 108(3).