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The Act applies, in the first instance, to non-seasonal factories using power in manufacturing process and employing 10 or more coverable employees and non-power using factories employing 20 or more coverable employees for wages. The provisions of the Act are being extended area-wise by stages.The Act contains an enabling provision under which the “appropriate government” who is empowered to extend the provisions of the Act to other classes who establishments – industrial, commercial, agricultural or other-wise. Under these provisions, most of the State Govts. have extended the provisions of the Act to new classes of establishments namely : shops, hotels, restaurants, cinemas including preview theatres, road-motor transport undertakings and newspaper establishments employing 20 or more coverable employees.

The Scheme has also been extended to educational institutions and medical institutions employing 20 or more employees in Rajasthan w.e.f. 26-10-2004 and 15-12-2006 respectively. Employees of factories / establishments mentioned above in the implemented areas and drawing wages (excluding overtime) not exceeding Rs. 10000/- per month are covered under the Act.