Sections 106 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 106 says which building workers must be registered as beneficiaries. Section 107 says when a worker stops being a beneficiary and protects long-standing beneficiaries. Section 108 sets up the Building and Other Construction Workers' Welfare Fund and limits administrative spending.
A building worker aged 18 or more but under 60 who has worked in building or construction not less than ninety days in the preceding twelve months shall be registered as a beneficiary (s.106). Registration ceases at sixty or if the worker is not engaged for at least ninety days in a year, excluding days lost to an accident injury (s.107(1)). A beneficiary of three continuous years before sixty keeps eligibility for prescribed benefits (s.107(2)). The Welfare Fund takes the cess, grants and other sums, and administrative expenses are capped at five per cent of total yearly expenses (s.108).
Why it matters
For contractors and principal employers, these provisions decide whose names must be on the register and who can claim welfare benefits. For workers, continuity of registration can decide whether old-age benefits are available. Employers who engage construction labour can get help with documentation from our labour law compliance team. The cess that feeds the Fund is covered in sections 100 to 102.
Section 106: registration as beneficiary
Every building worker who:
- has completed eighteen years but not sixty years of age; and
- has been engaged in building or other construction work for not less than ninety days during the preceding twelve months,
shall be registered by the officer authorised by the Building Workers' Welfare Board as a beneficiary, in the manner the Central Government prescribes.
What Central Rule 45 adds
Under rule 45 of the Code on Social Security (Central) Rules, 2026 (where the Central Government is the appropriate Government; State rules apply otherwise):
- the employer or contractor must register eligible workers on the muster roll on the State, Board or designated Central portal within 30 days of eligibility, seeded with Aadhaar and the Universal Account Number or other unique number;
- the State Board must provide the portal and may register other eligible workers;
- a registered worker gets a downloadable digital identity card, and cash benefits are paid by direct benefit transfer; and
- if a worker moves to another State, the employer or contractor updates the destination State portal within thirty days of the worker joining the muster roll, and the worker cannot be denied benefits only because the employer failed to update registration.
Section 107: cessation and the three-year rule
| Sub-section | Rule |
|---|---|
| (1) | A registered beneficiary ceases to be one on attaining sixty or when not engaged in building or construction work for at least ninety days in a year |
| Proviso | In counting ninety days, absence due to personal injury by accident arising out of and in the course of employment is excluded |
| (2) | Despite (1), a person who was a beneficiary for at least three years continuously immediately before sixty is eligible for benefits the Central Government prescribes |
| Explanation | For the three years, add any period as a beneficiary registered with any other such Board immediately before registration with the present Board |
Rule 46 of the Central Rules says the Central Government may formulate and notify schemes for these long-standing beneficiaries. The Code and Rules do not state the benefit amounts; they depend on notified schemes.
Section 108: the Welfare Fund
Credits to the Fund (s.108(1))
- (a) the cess levied under s.100(1);
- (b) grants and loans by the Central Government to the Board; and
- (c) all sums from other sources decided by the Central Government.
Applications of the Fund (s.108(2))
- (a) the Board's expenses in discharging its functions under s.7(6);
- (b) salaries, allowances and remuneration of members, officers and employees; and
- (c) expenses on objects and purposes authorised by the Code.
The five per cent cap (s.108(3))
A Board cannot, in any financial year, spend on salaries, allowances and other remuneration and other administrative expenses more than five per cent of its total expenses for that year. This keeps most of the money for welfare.
For the Boards themselves see sections 6 and 7.
A worked example
Ravi, 34, works for a contractor on two sites over the year and is on site for about 120 days. He qualifies for registration, and the contractor registers him on the State portal within thirty days, with Aadhaar seeding. Later in the year he is off site for six weeks after a site accident; those days are not counted against his ninety-day requirement. If he keeps his registration until sixty, having been a beneficiary for at least three continuous years, he is eligible for prescribed benefits. (Illustrative.)
Need help registering construction workers?
Registration on the right portal, updating on migration and keeping the ninety-day evidence are practical tasks for contractors. Our labour law compliance team can help set up the registers and filing routine.
Key takeaways
- Register building workers aged 18 to under 60 with 90+ days of work in the preceding twelve months.
- Registration ceases at 60 or on falling below 90 days in a year; accident-injury absence is excluded.
- Three continuous years as a beneficiary before 60 secures prescribed benefits.
- Central Rules: employer or contractor registers within 30 days; digital ID card; DBT.
- Fund admin spending is capped at 5% of a Board's total yearly expenses.
Read next
- Sections 100 to 102: Cess, interest and power to exempt
- Sections 109 to 112: Schemes for unorganised workers
- Sections 6 and 7: National Social Security Board and State Unorganised Workers Board
- ESI for construction workers: Special provisions
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.