Understanding the Workmen's Compensation Act: What Do I Need to Know to Comply?

Dear Members,

Please provide me with a general idea about the subject mentioned above, as I need to comply with the Act in my company.

Regards,
Vikas Kumar
09968008206

Dear Vikas,

The Workmen's Compensation Act is the legislation that addresses the compensation to be provided to employees who are on the company's payroll and sustain an injury during the course of their employment.

Employees covered under the Employee State Insurance (ESI) Act are exempt from coverage under this law as the ESI scheme caters to all compensation-related risks and payments.

In cases where the individual or organization is not protected by the ESI Act, the employer bears the responsibility of compensating the employee injured during employment. The compensation amount is determined based on the nature and severity of the injury, with the Labour Commissioner or Deputy Commissioner being the competent authorities for finalizing the compensation sum. For severe injuries such as loss of a finger or eyesight, the compensation can be substantial, posing challenges for the management to pay. Consequently, many employers opt to secure a Workmen's Compensation policy from an insurance provider to handle such payments, although this necessitates the payment of an annual premium and regular renewal.

I trust this information resolves any queries you may have.

Thanks and regards,
Kameswarao

Is it mandatory to mention the work location in the WC policy? Some of the policies received by us just mention 'all over India,' and the name of the site location doesn't appear. Kindly clarify.

Vinay

There may be multiple locations, and a general policy may also make sense, but it covers the accidents/injuries arising out of employment. There is one more policy called Group Personal Accident Policy, which covers 24 hours extended to outside the premises.

Thanks and regards,
Kameswarao

Thank you very much; it's really helpful to me. I think there is no requirement in our company as all employees are covered under ESIC - PF act.

Thanks once again,

Vikas Kumar

Dear Vikas,

Some areas are not covered under ESI due to the unavailability of an ESI Dispensary. For those places where ESI is not covered, the WC policy is beneficial from the employer's side to protect against significant expenses in the event of a major accident during employment. Insurance companies like The National Assurance Co. and Oriental Insurance Co. offer the WC policy in two ways: one with medical benefits where the premium is higher, and the other without medical benefits where only compensation is paid with a lower premium.

Sanjeev Rai

The Act is not only applicable to the permanent employees of the company, but it is also applicable to contractor employees, and the principal employer is liable to pay compensation in case of any accident to contractor employees.

Regards,
Madhukar

Dear Mr. Madhukar,

I opine that WC is applicable to employees. It is also applicable to regular, contract, casual, and all.

Thanks and regards,
Kameswarao