The Act applies to all non-seasonal factories, employing 10 or more persons on any day of the preceeding 12(twelve) months, in implemented areas. There is an enabling provision in the Act under Section 1(5) to extend to other classes of establishment – industrial, commercial, agricultural or otherwise. Most of the State Govts. have extended the provision of the Act to the following class of establishments, i.e., shops, hotels, restaurants, cinemas including preview theatres, road-motor transport agencies, newspaper establishments, Private Medical and Educational Institutions employing 20 or more persons.

A factory once covered remains covered even if the number of employees at any later stage falls short of the stipulated number of 10 or 20 or the manufacturing process therein ceases to be carried on. The Act does not apply to workers engaged in mining operations, railway running sheds, certain seasonal factories operating for less than 7 months in a year. Factories or establishments run by the State Govts./ Central Govt. whose employees are in receipt of social security benefits substantially similar or superior to those provided under the Act can be exempted from coverage.