Understanding Workmen's Compensation: How Are Benefits Calculated for Different Scenarios?

Hi Friends,

The Workmen's Compensation Act of 1923 and subsequent amendments impose a statutory obligation upon employers to compensate their own employees and those of contractors for labor or otherwise employed by them when incapacitated as a result of an employment accident.

We give below the workings of compensation payable in the event of death or permanent total disablement. There is a fixed chart of factors based on the completed years of age on the last birthday immediately preceding the date on which the compensation fell due. A specimen of factors is given below:

Age Factor
18 226.38
25 216.91
30 207.98
35 197.06

The factor decreases as the age increases.

Now we give below the formula for working out compensation. The maximum wages are taken as Rs. 4000 for the purpose of arriving at compensation payable.

For the calculation, we will consider the age of the workmen as 33, and the corresponding factor applicable then will be 201.66.

Case 1) Death of Employee
Age 33 Factor 201.66
Wages Rs. 4000 x 50% = 2000 x 201.66 = Rs. 403320

Case 2) Permanent Total Disablement
Wages Rs. 4000 x 60% = 2400 x 201.66 = Rs. 483984 (maximum Rs. 452760)

Case 3) Temporary Total Disablement
The first 3 days are excluded. Suppose the number of days was 28. Then the calculation will be 28-3 = 25 days:
25 X 25% of wages
15
i.e., 1.66 x 1000 = Rs. 1660

Keep Smiling...
Mahesh K Prasad

Hi Ashvin,

I was going through the post, and I must admit it is very informative. I have a question though. Can you let me know what would be the compensation for a person of Age 22 with partial disability (Two phalanges have been cut in the Left Index and Middle Finger each), and his wages would be minimum wages, say 3000/-.

Thanks,
Ashvin

Hi Friends,

The Workmen Compensation Act of 1923 and subsequent amendments impose a statutory obligation upon Employers to compensate their own Employees and those of 'Contractors for labor or otherwise employed by them when incapacitated as a result of an accident of employment.

We give below the working of compensation payable in the event of death or permanent total disablement. There is a fixed chart of factors based on the completed years of age on the last birthday immediately preceding the date on which the compensation fell due. A specimen of factors is given below:

Age Factor

18 226.38

25 216.91

30 207.98

35 197.06

The factor goes down as the age increases. Now, we give below the formula for working out compensation. The maximum wages are taken as Rs. 4000/- for the purpose of arriving at the compensation payable. For the purpose of the calculation, we will take the age of the workmen as 33, and the corresponding factor applicable then will be 201.66.

Case 1) Death of Employee

Age 33 Factor 201.66

Wages Rs. 4000 x 50% = 2000 x 201.66 = 403320/-

Case 2) Permanent Total Disablement

Wages Rs. 4000 x 60% = 2400 x 201.66 = 483984/- (maximum Rs. 4,52,760/-)

Case 3) Temporary Total Disablement

First 3 days are excluded. Suppose the number of days was 28, then the calculation will be 28-3=25 days.

25 X 25% of wages

15 i.e., 1.66 x 1000 = 1660/-

Keep Smiling.... Mahesh K Prasad

Dear all,

Can anyone update me on whether an employer covered under the ESIC Act would be liable to pay workers' compensation in the case of a road accident (resulting in death) after duty hours with their own vehicle?

Dear Mr. Prasad,

I have gone through your compensation calculation, and an apparent irregularity comes to my mind, i.e., compensation so arrived at for Case-1 (Death of employee) cannot be less than that for Case-2 (permanent disablement).

Please check and rectify.

Dear Sir,

What is 25 and 15?

"Temporary Total Disablement"
First 3 days are excluded. Suppose the number of days was 28. Then the calculation will be 28 - 3 = 25 days.
25 x 25% of wages = 15.

E-Id: [Login to view]

Dear Mr. Prasad,

For case no. 2, the amount is not mentioned by you, but it is 60% of Rs. 483,984, i.e., Rs. 290,390.

The name of the act is the Employees' Compensation Act of 1923. The bill was passed in the month of January itself.

Dear All,

Sub: How to settle Accident case (Permanent disablement) settlement.

Note: He is a contract employee and not covered by ESIC.

An employee met with accident inside our factory in the month of Nov' 09. The employee lost his index figure. He had re joined in the month of Jan'10. (From 18 & 18B are submitted as per factories act).

He has joined company with temporary fitness certificate, which has given by doctor who has given medical treatment. As doctor advised he has to under go 2nd operation latter stage. Which is going to happened this month. Once it completed how to take it forward.

Please guide me:-

1. How to get permanent loss % from where have to get the same.

2. How to close this issue and what step we have to take further from Principle employer.

3. From contractor side what necessary stops have to take?

4. What are the documents need to be get from contractor.

I request you to guide me to close the same without any problem, otherwise can you give me your contact no I will call you.

Thanks & Regards,

Kannan N

o9962021188.