The Labour and E.S.I Department was originally known as Labour, Employment and Housing Department. During the year 1980, the Housing wing was separated from this Department and consequent upon restructuring of Departments vide G.A Department Notification No.24622 Dt.19.12.2011 read with their Corrigendum No. 3175/Gen dt. 10.02.2012, the Employment wing has been separated from this Department. This Department has been renamed as Labour & Employees' State Insurance Department vide Office Order No.1574/LESI Dt.27.02.2012.

It is the Nodal Department for formulating Plans, Policies and programmes for development of Labourers including child labourers (engaged under both organized and unorganized sectors) for security measures in Factories and Boilers and the social security of Industrial workers.