In the 28th December 1987, the Kerala Coir Workers' Welfare Fund Act was passed by the Kerala State Legislative Assembly for the welfare of the 2 lakh coir workers and their dependent family members in the coir industry, which ranks first among the traditional industries in Kerala and employs the largest number of workers. Subsequently in 1989, Welfare Fund Rules and Welfare Fund Schemes came into force.

After making necessary amendment in the above Act, the Kerala Coir Workers Welfare Fund (Amendment) Act was enacted by the legislature in 1998. The amendment has provided vast scope for the activities of Coir Workers Welfare Fund, and led to tremendous benefit to workers which in turn stimulated the functioning of the board.