State Response to Migrant Workers: Legal Frameworks and Challenges

When a worker boards a train from Bihar or Odisha to find a job at a Delhi construction site, they cross more than just state borders. They step into a legal grey zone where their wages, safety, and welfare depend on laws that most of them have never heard of. India has built an elaborate framework to protect these workers on paper, yet the gap between what the statute promises and what reaches the worker remains one of the most persistent challenges in labour governance. Understanding this framework, and why it so often fails, is essential to understanding the politics of migration.

Why migrant workers needed a dedicated law
The Inter-State Migrant Workmen Act, 1979
What the Act promised workers
The Building and Other Construction Workers Act, 1996
How the cess funds welfare
The shift to the labour codes
The portability problem and digital solutions
The persistent implementation gap
State responses: where progress is visible
Kerala’s pioneering model
Delhi’s digital push
The road ahead

Why migrant workers needed a dedicated law

Internal migration has always powered the economy, but the workers who move are among the most vulnerable in the labour force. They are recruited far from home, often through middlemen, and have little bargaining power once they arrive. The exploitation was systematic. In Odisha, for instance, migrant labourers known locally as dadan workers were sent through contractors called Sardars to large construction projects in other states, where promised piece-rate wages were frequently never settled as agreed.

This pattern of abuse led directly to dedicated legislation. The state recognised that ordinary labour laws, designed for stable factory employment, simply did not fit a workforce that was mobile, informal, and dependent on recruiting agents. The legal response unfolded over several decades and continues to evolve today.

The Inter-State Migrant Workmen Act, 1979

The cornerstone of this framework was the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, which received presidential assent in June 1979. Its purpose was straightforward: to regulate the employment of workers whose labour is requisitioned outside their home state and to guarantee them decent conditions of service.

The Act worked through a system of registration and licensing. A principal employer could not engage inter-state migrant workmen unless the establishment held a valid certificate of registration. The law applied to every establishment and contractor employing five or more inter-state migrant workmen on any day of the preceding twelve months. Contractors who recruited such workers were required to obtain licences, which created an official paper trail linking the worker to a responsible employer.

What the Act promised workers

Beyond registration, the law set out concrete entitlements. Workers were promised regular payment of wages, equal treatment compared to local workers doing similar jobs, and certain benefits tied to their displacement from home.

Displacement and journey allowances: Because workers were moved far from home, contractors had to pay allowances to cover the cost of relocation and travel.
Suitable working and living conditions: The Act required provision of basic amenities and protective measures at the workplace.
Wage protection: Wages could not fall below the rates payable to local workers, reducing the incentive to undercut by importing cheaper labour.

The legislation also carried penal provisions. A general contravention of the Act or its rules could attract imprisonment of up to two years, a fine, or both, signalling that violations were meant to be treated seriously.

The Building and Other Construction Workers Act, 1996

Construction is where migration and exploitation meet most visibly, since the sector absorbs a huge share of mobile labour. To address this, Parliament passed the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act in 1996, recognising that construction work was hazardous, irregular, and mostly performed by migrants.

The central mechanism of this law is the welfare board. The Act requires state governments to set up welfare boards funded by a cess on construction activity, with the money meant to provide medical assistance, accident insurance, children’s education support, maternity benefits, pensions, and housing assistance.

How the cess funds welfare

The financial backbone comes from a companion law, the Building and Other Construction Workers’ Welfare Cess Act, 1996. This statute provides for a cess levied at a rate of not less than one per cent and not more than two per cent of the cost of construction incurred by an employer.

This design is significant. Construction workers are among the few groups in the informal economy covered by a dedicated central welfare law, giving them stronger social security protections on paper than most informal workers enjoy. The cess creates a ring-fenced pool of money that, in theory, cannot be diverted to other purposes.

The shift to the labour codes

The legal framework changed substantially in recent years. As part of a major consolidation of labour laws, the Occupational Safety, Health and Working Conditions (OSHWC) Code, 2020 merged thirteen separate laws, including both the 1979 Inter-State Migrant Workmen Act and the 1996 construction workers law, into a single statute.

The new Code attempts to fix some old weaknesses. It widens the definition of an inter-state migrant worker to include a person who moves on their own from one state to another for work, not just someone recruited through a contractor. Earlier, a worker who travelled independently and found a job fell outside the law’s protection entirely. The Code also requires employers to pay a lump sum journey allowance for the worker’s annual to-and-fro travel to their native place and extends benefits under the Employees’ State Insurance and Provident Fund schemes.

The portability problem and digital solutions

A core difficulty has always been that benefits were tied to a specific state, so a worker lost access when they moved. Two major reforms try to solve this. The first is the One Nation One Ration Card scheme, launched in 2019, which lets migrant workers and their families buy subsidised food grains from any fair price shop in the country under the National Food Security Act.

The second is the e-Shram portal, launched in 2021 to create a national database of unorganised workers. This came about largely because the Supreme Court directed the Centre to set up a portal for registering migrant workers during the Covid-19 lockdown, after the migrant crisis exposed how invisible these workers were to the state. The portal issues each worker a Universal Account Number intended to function as a national identity, allowing benefits to follow the worker across state lines.

The persistent implementation gap

For all this legal architecture, the reality on the ground tells a harder story. The most fundamental failure is registration. Decades after the construction workers law was passed, only around 5.65 crore workers are registered against an estimated 7.1 crore in the sector. A worker who is not registered is invisible to the welfare system, no matter how much money sits in the cess fund.

Several structural factors explain why these laws struggle.

Mobility defeats the system: The informal and circular nature of migration makes registration extremely difficult. Workers move between sites, districts, and states constantly, so a registration anchored to one location quickly goes stale.
Weak enforcement: Labour inspection is thinly staffed, and contractors have strong incentives to avoid registering workers to escape obligations and cut costs.
Low awareness: Studies of welfare schemes repeatedly find that many migrants either never learned the schemes exist or do not know how to apply for them.
Funds lying unused: The cess model collects money effectively but disburses it poorly. Welfare boards have repeatedly accumulated large unspent balances while eligible workers receive nothing.

The Covid-19 lockdown made these failures impossible to ignore. The Supreme Court bluntly observed that claims of welfare schemes remain only on paper unless registration is completed first, directing the government to act with urgency.

State responses: where progress is visible

Because labour is on the Concurrent List, states have considerable room to design their own responses, and some have moved well ahead of others.

Kerala’s pioneering model

Kerala, which now hosts a very large migrant population from states like West Bengal, Assam, Bihar, and Odisha, became the first state to create a dedicated social security scheme for migrant workers, in 2010. It refers to them respectfully as “guest workers” and has built several targeted programmes. The Aawaz scheme provides health insurance and accident cover, while the Apna Ghar initiative offers clean, affordable hostel accommodation, with the first such facility opening in Palakkad. Yet even Kerala’s experience underlines the limits of state action: of the lakhs of migrants in the state, only a fraction have actually registered for these schemes, and tracking the floating population remains a serious challenge.

Delhi’s digital push

Delhi, a major destination for migrant construction labour from across north India, channels its efforts through the Delhi Building and Other Construction Workers Welfare Board. The Board offers pensions, maternity benefits, education and medical assistance to registered workers. More recently, it has begun developing chip-based smart cards and an integrated digital platform aimed at giving migrant workers uninterrupted access to welfare without repeated registration. This directly targets the portability problem that has long undermined the system.

The pattern across states is instructive. The most effective interventions combine three things: simple registration, portable benefits that travel with the worker, and active outreach rather than passive enrolment. Where states rely on workers to find and navigate the system themselves, uptake stays low regardless of how generous the scheme looks on paper.

The road ahead

The legal framework for protecting migrant workers has grown steadily more sophisticated, moving from the contractor-focused 1979 Act to the consolidated labour codes and digital tools like e-Shram. The intent has never been the problem. The challenge has always been translating statutory promises into benefits that actually reach a workforce that is, by its very nature, hard to find and harder to keep track of. Until registration becomes genuinely simple and benefits become fully portable, the protective umbrella will keep leaving its most vulnerable users out in the rain.

What do you think? Should the responsibility for registering migrant workers rest primarily with employers and contractors, or should the state take on the active task of finding and enrolling workers itself? And can a purely digital solution like e-Shram succeed where physical registration has struggled, given how many migrant workers lack stable phone numbers and documentation?

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Table of Contents

Why migrant workers needed a dedicated law 🔗

The Inter-State Migrant Workmen Act, 1979 🔗

What the Act promised workers 🔗

The Building and Other Construction Workers Act, 1996 🔗

How the cess funds welfare 🔗

The shift to the labour codes 🔗

The portability problem and digital solutions 🔗

The persistent implementation gap 🔗

State responses: where progress is visible 🔗

Kerala’s pioneering model 🔗

Delhi’s digital push 🔗

The road ahead 🔗