Dear Seniors,
I am a bit confused about whether the WC policy taken by the employer is a part of the CTC of the Employee or not. If not, are there any legal complications if we show it in the CTC breakup of the employee?
From India, Mumbai
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18I am a bit confused about whether the WC policy taken by the employer is a part of the CTC of the Employee or not. If not, are there any legal complications if we show it in the CTC breakup of the employee?
From India, Mumbai
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Dear Consultant Brother,
If you understand the concept and meaning of CTC, you will never be confused. CTC stands for Cost to Company and is not a payment to the employee. For example, if you are an employer or a company, and you hire my services, you will be spending on my employment in terms of salary, benefits, perks, etc. Additionally, you will be contributing to PF, Medical Insurance, other insurance, gratuity premiums, etc., for me and other employees. All these expenses incurred by you on me and others are considered as your cost, i.e., CTC.
It is at the discretion of the employer to decide which expenses are included in the CTC calculation and which are not. My advice to employers is not to include expenses such as premiums paid for gratuity, medical insurance, and other types of insurance in the CTC calculation. Some employers even consider the cost of leave as part of CTC, a practice I personally do not favor. However, I will not say that they are wrong.
From India, Mumbai
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If you understand the concept and meaning of CTC, you will never be confused. CTC stands for Cost to Company and is not a payment to the employee. For example, if you are an employer or a company, and you hire my services, you will be spending on my employment in terms of salary, benefits, perks, etc. Additionally, you will be contributing to PF, Medical Insurance, other insurance, gratuity premiums, etc., for me and other employees. All these expenses incurred by you on me and others are considered as your cost, i.e., CTC.
It is at the discretion of the employer to decide which expenses are included in the CTC calculation and which are not. My advice to employers is not to include expenses such as premiums paid for gratuity, medical insurance, and other types of insurance in the CTC calculation. Some employers even consider the cost of leave as part of CTC, a practice I personally do not favor. However, I will not say that they are wrong.
From India, Mumbai
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Is it WC or Health Insurance policy? I think you mean Health Ins. It is part of CTC. Pon
From India, Lucknow
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From India, Lucknow
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Dear Vallabh,
In further reference to my respected senior member Sh. Keshav Korgaonkar, I would like to add that the premium paid by the employer on the WC policy is not supposed to be included while fixing the CTC. However, in the company where the ESI scheme is applicable, the contribution is taken as part of the salary for the purpose of calculating CTC since the scheme covers the employment injuries caused to the workers. As a precautionary measure, the employer prefers to have a WC Policy where the ESI scheme is not in existence.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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In further reference to my respected senior member Sh. Keshav Korgaonkar, I would like to add that the premium paid by the employer on the WC policy is not supposed to be included while fixing the CTC. However, in the company where the ESI scheme is applicable, the contribution is taken as part of the salary for the purpose of calculating CTC since the scheme covers the employment injuries caused to the workers. As a precautionary measure, the employer prefers to have a WC Policy where the ESI scheme is not in existence.
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Dear friends, WC Policy is never be a part of CTC. It is the statutory obligation on the employer for providing WC Policy to its employees, where there is no applicability of ESI Scheme in their area
From India, Hyderabad
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From India, Hyderabad
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Dear Mr. Vallabh,
As mentioned by Mr. Yagniah – where there is no ESIC coverage then the Company has to cover its employees/workmens under WC (workmen compensation) policy - its nothing but It is a compressive Social Security Scheme designed to accomplish the task of protecting the ‘employees’ in the organized sector against the hazards of sickness, maternity, disablement and death due to employment injury and to provide medical care to the insured employees and their families..
Employees/workmen’s will be given an alternative options as WC policy since they don’t get ESIC benefits. . if you are company is considering ESIC contribution as part of employees CTC then you will have to considered WC also be a part of CTC only.
Dear Seniors/experts.
Pls. correct me if I’m wrong.
Thanks and Regards,
Jagadeesh R
Sr. Executive - HR
From India, Bangalore
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As mentioned by Mr. Yagniah – where there is no ESIC coverage then the Company has to cover its employees/workmens under WC (workmen compensation) policy - its nothing but It is a compressive Social Security Scheme designed to accomplish the task of protecting the ‘employees’ in the organized sector against the hazards of sickness, maternity, disablement and death due to employment injury and to provide medical care to the insured employees and their families..
Employees/workmen’s will be given an alternative options as WC policy since they don’t get ESIC benefits. . if you are company is considering ESIC contribution as part of employees CTC then you will have to considered WC also be a part of CTC only.
Dear Seniors/experts.
Pls. correct me if I’m wrong.
Thanks and Regards,
Jagadeesh R
Sr. Executive - HR
From India, Bangalore
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ESI contribution is a recurring liability of the employer every month, irrespective of the occurrence of sickness, maternity, disablement, or death to employees covered under the ESI Act. However, the EC Act (HR professionals, please do not refer to it as the WC Act) applies only when an accident occurs to an employee not covered under the ESI scheme and falls under the definition of an employee under the EC Act. It does not apply to all employed persons.
Also, please understand that in India, there is no law that makes it obligatory for employers to take out an insurance policy under the EC Act or POG Act.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
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Also, please understand that in India, there is no law that makes it obligatory for employers to take out an insurance policy under the EC Act or POG Act.
Varghese Mathew
9961266966
From India, Thiruvananthapuram
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Dear Varghese ji,
While endorsing your above response, I would like to draw your kind attention to the practice where some employers include the cost incurred by them towards the premium for EC policy in the CTC. Whether this is right or wrong is a different subject. Therefore, the views I am expressing on this subject are as follows:
"It is up to the employer to decide which expenses are to be included in the CTC and which are not. My advice to employers is not to include expenses towards premium paid for gratuity, medical insurance, and other types of insurance in the CTC. Some employers even include the costing of leave as part of the CTC, which I do not support. HOWEVER, I WILL NOT SAY THAT THEY ARE WRONG."
From India, Mumbai
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While endorsing your above response, I would like to draw your kind attention to the practice where some employers include the cost incurred by them towards the premium for EC policy in the CTC. Whether this is right or wrong is a different subject. Therefore, the views I am expressing on this subject are as follows:
"It is up to the employer to decide which expenses are to be included in the CTC and which are not. My advice to employers is not to include expenses towards premium paid for gratuity, medical insurance, and other types of insurance in the CTC. Some employers even include the costing of leave as part of the CTC, which I do not support. HOWEVER, I WILL NOT SAY THAT THEY ARE WRONG."
From India, Mumbai
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Hi,
The Employees Compensation Act (WC Policy) is used as an alternative provision of ESIC (where ESIC coverage is not available). However, both provisions are meant for the welfare of employees. Also, under statutory provisions, employers are bound to provide such social security to every employee. Hence, it is a cost to the company. HR personnel must ensure that this benefit/privilege is granted to employees because it is a statutory requirement as well as in the interest of employees' welfare.
Thanks,
Bijay
From India, Vadodara
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The Employees Compensation Act (WC Policy) is used as an alternative provision of ESIC (where ESIC coverage is not available). However, both provisions are meant for the welfare of employees. Also, under statutory provisions, employers are bound to provide such social security to every employee. Hence, it is a cost to the company. HR personnel must ensure that this benefit/privilege is granted to employees because it is a statutory requirement as well as in the interest of employees' welfare.
Thanks,
Bijay
From India, Vadodara
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Dear Friend,
Mr. Karogoankar has very vividly and lucidly explained to you the concept of CTC. Coming to the Workmen's Compensation, if your industry is covered by the ESI, the WC will not be applicable to your industry. Workmen's compensation only arises in case of any accident during the course of work, and if the concerned employee is injured and loses their earning capacity, the Workmen Compensation Act will apply, and the compensation shall be paid as per the loss of earnings as tabulated under the WC Act. If the industry is covered under the ESI Act, the industry is only required to send the Accident report in Form No.12 to the local office, and the local dispensary and ESI authority will take care of all the formalities in arriving at the compensation and the pension payable to the injured employee based on the quantum of injury and loss of earning capacity.
Hope this clarifies your doubt.
G.K. Manjunath
Sr. Manager-HR
From India, Bangalore
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Mr. Karogoankar has very vividly and lucidly explained to you the concept of CTC. Coming to the Workmen's Compensation, if your industry is covered by the ESI, the WC will not be applicable to your industry. Workmen's compensation only arises in case of any accident during the course of work, and if the concerned employee is injured and loses their earning capacity, the Workmen Compensation Act will apply, and the compensation shall be paid as per the loss of earnings as tabulated under the WC Act. If the industry is covered under the ESI Act, the industry is only required to send the Accident report in Form No.12 to the local office, and the local dispensary and ESI authority will take care of all the formalities in arriving at the compensation and the pension payable to the injured employee based on the quantum of injury and loss of earning capacity.
Hope this clarifies your doubt.
G.K. Manjunath
Sr. Manager-HR
From India, Bangalore
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Dear Manjunath ji, Small but very significant correction with due regards to you. If employee is covered by the ESI, the WC will not applicable to the employee.
From India, Mumbai
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From India, Mumbai
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Mr.Koragaonkar, Pl. read my first sentece. It is very clearly mentioned that if the Industry is covered, WC will not applicable. G.K.Manjunath Sr. Manager-HR
From India, Bangalore
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From India, Bangalore
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Dear Manjunath ji,
With due respect to you, Sir, I once again submit that when an industry (i.e., factory or establishment) is covered under ESI, it is not necessary that all the employees engaged in such factory or establishment are covered under ESIS. The WC (EC) Act is applicable to those employed persons who are not covered under ESIS. If I am wrong, then I will have to apologize to all those to whom I have given the wrong picture up till now.
From India, Mumbai
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With due respect to you, Sir, I once again submit that when an industry (i.e., factory or establishment) is covered under ESI, it is not necessary that all the employees engaged in such factory or establishment are covered under ESIS. The WC (EC) Act is applicable to those employed persons who are not covered under ESIS. If I am wrong, then I will have to apologize to all those to whom I have given the wrong picture up till now.
From India, Mumbai
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Employee reference policy.doc