Navigating Employee Benefits: Should We Choose Workmen's Compensation or Mediclaim?

In a company, there are about 1500 employees (on-roll). Out of them, 1000 are under ESI, and the rest are covered under Mediclaim and Accidental policy. Suppose there is a substantial increase in wages/salary (by virtue of an increase in DA or basic or a new agreement), and about 900 employees who were under the coverage of ESI are now exceeding the limit of Rs. 10,000. Would it be advisable to opt for Workmen's compensation or go for a Mediclaim policy? Please advise.

Regards,
NKT.

Dear Tiwari Ji,

The limit for ESI has been enhanced from Rs. 10,000 to Rs. 15,000 effective from 01/04/2010.

With regards,
KSCC

Dear friends,

Can anybody give me a brief of exempted and non-exempted PF, pension, DLI, and the system of contribution along with the forms so that I can update myself? I will remain ever grateful.

Ghosh

Hi,

Could you please tell me if there is any limit for ESI members to be counted, like PF? For example, if members are below 20, there is no PF to be deducted mandatorily.

Regards,
Sreedar.S

Dear NKT,

For employees exempted from ESI, you will have to think of firstly safeguarding your company from claims for Workmen's Compensation. So that policy is a must. As a welfare scheme, if not matching equally the ESI scheme, at least offering solace to employees injured during work, a policy safeguarding them from medical expenses would also be ideal as, finally, you will be liable for both - being the employer. So please consider both for non-ESI employees.

Regards

Dear Tiwari Ji,

Your thread is quite interesting, and the solution given by Murali Dutt is also good. I want to ask a question relating to it: Is it a statutory requirement to cover the excluded employee (excluded from ESI) under workmen compensation?

Please provide your responses as I am very curious about it.

Thank you.

Dear all,

It is not mandatory to cover your exempted employees under any insurance or workers' compensation policy. However, if an excluded employee meets with an accident, the liability will be significant.

Regarding the limit for ESIC exemption, ESIC has agreed to increase it, but the bill still needs to be presented in front of parliament to become law. Therefore, the current exemption limit remains at 10,000.

Please correct me if I am mistaken or not up to date.

Regards,

Vijay Vyas
Manager-HR
Noble Group

The ESI wage ceiling will be increased to Rs.15K w.e.f. 1.4.10. You may like to review the situation accordingly.

A combination of Mediclaim and Personal Accident Insurance Policy would be a good choice. You may also like to add a Term Plan with suitable Insurance Cover for employees outside the purview of the ESI Scheme.

Best Wishes,
Vasant Nair

Workmen Compensation and Mediclaim are two different things, and do not treat them as one.

Where provisions of ESI Scheme are not applicable, provisions of Workmen Compensation Act become applicable. In case you want to cover the likely financial risk due to the applicability of provisions of the Workmen Compensation Act, you have a choice of covering those employees under Group Workmen Compensation Policy. Though coverage under the policy is not mandatory.

Coverage under Mediclaim Insurance is not mandatory, and the employer can extend this benefit to employees as a non-statutory benefit. But please note that a Mediclaim Policy is not a substitute for Workmen's Compensation.

Thanks & Regards

In a company, there are about 1500 employees (on-roll). Out of them, 1000 are under ESI, and the rest are covered under Mediclaim and Accidental policy. Suppose there is a substantial increase in wages/salary (by virtue of an increase in DA or basic or new agreement), and about 900 employees who were under the coverage of ESI are now exceeding the limit of Rs. 10,000/-. Will it be advisable to go for Workmen compensation or go for a mediclaim policy? Please advise.

Regards,
NKT.

As far as my knowledge runs, Workers' Compensation is applicable in non-implemented areas of ESI. When the coverage exceeds the limit prescribed under ESI, one can go either for WC or for any other schemes which extend benefits to the employees. In the case of WC, the scope and benefits are very limited. So, it is better to go for Mediclaim and accidental policy (financial implication being more or less the same as under ESI). Any further comments or advice are welcome.

To have a mediclaim and personal accident for the exempted employees is good, but it should only be considered as a welfare measure offered by the employer. This will not, however, protect the employer from legal liability under the Workers' Compensation (WC) Act. In other words, you cannot escape liability under WC if the injured party seeks compensation.

Dear Sirs,

Let us explore what the law states regarding WC applicability. I believe that salary is not the sole criterion for determining WC coverage. It is the type of industry and the nature of the work an individual performs that either qualifies or disqualifies them for compensation. The definition of "workmen" is outlined in Schedule II of the WC Act, where the categories of work eligible for WC are listed.

In reality, it can be challenging to strictly adhere to the law when demonstrating concern and sympathy. Therefore, rather than distinguishing between employees and seeking exemptions, it is advisable to have coverage in place, considering the broader interests of the company and ensuring smooth business operations. Acquiring a policy reduces your risk as you are protected from claims.

Injuries are not always fatal; they can be temporary, partial, or permanent. Thus, there will be treatment costs that can be offset through a medical insurance policy. These welfare measures are beneficial costs to the company as they contribute to long-term savings. Please reflect on this.

Regards

Dear Sridar,

Having 20 or more employees will require an ESI code, and both employers and employees will need to start contributing.

With regards,

Dear Sreedar,

As per my knowledge, any organization with 20 or more employees must adhere to PF regulations. Therefore, if the workforce is below 20, PF does not apply.

Regards,
Jyothi

QUOTE=Sreedar Srinivasan;1066702

Hi, could you please clarify if there is a limit for ESI members to be counted similarly to PF? For instance, if the member count is below 20, PF deductions are not mandatory.

Regards,
Sreedar S

In the manufacturing industry for fire safety, there are different policies that we have implemented, such as workmen's compensation policy, group personal accident policy, and mediclaim, among others. The purpose of these policies is to provide coverage to employees in case of unforeseen situations. I personally feel that there is some overlap in the benefits provided to employees, leading to increased expenditure for the organization. Can you please guide me through this?

Regards,
Jyothi

Recommendation for Employee Insurance Coverage

As per my knowledge, it makes sense to go for a workmen's compensation policy.

Regards,
Jyothi