Understanding Workers' Compensation: How Do I Calculate It for My Employee's Accident?

Can anyone help me understand the Workers' Compensation Act or the calculations for the same? One of my employees met with an accident on the shop floor, and we are considering giving him some compensation. I need to calculate the same for my company. Kindly revert.

Regards,
Ravi

Dear Ravi,

You have to be more specific. There are four types of disablements that result in a loss of earning capacity:

1. Temporary Partial Disablement
2. Temporary Total Disablement
3. Permanent Partial Disablement
4. Permanent Total Disablement

Please describe the place, nature, and the injury suffered by the person. Was the person injured while he was in the course of employment? Only if you provide details can we respond to you more appropriately.

Regards,
M.V. Kannan

Dear Kannan,

The employee was in employment, and his left arm was injured. The physician suggested being absent from work for one month due to temporary partial disability of the employee. Could you suggest...?

Regards,
Ravi

Please check the Workmen Compensation Act, in which Schedule I outlines the percentage of injury for each part of the body, and in Schedule IV, the Age Factor is available. If the injury level is not available, the authorized Medical Practitioner will provide the percentage of injury and period of disability. You can also inquire about this information from the Labor Commissioner's Office in your area, where they handle WC matters.

Thank you.

If you could provide full details of the injury, including the contents of the medical certificate, perhaps I will be able to give my views.

With regards,

In case of injury (Temporary Disablement) resulting in only being absent from duty since the physician has suggested rest only, then as per Section 4(d): a half-monthly payment of the sum equivalent to twenty-five percent of the monthly wages of the workman, to be paid in accordance with the provisions of sub-section (2).

Sub-section (2)

The half-monthly payment shall be payable on the sixteenth day:

- (i) from the date of disablement where such disablement lasts for a period of twenty-eight days or more, or
- (ii) after the expiry of a waiting period of three days from the date of disablement where such disablement lasts for a period of less than twenty-eight days; and thereafter, half-monthly during the disablement or during a period of five years, whichever period is shorter.

So, in short, we can say that half-monthly salary (payment) for this type of injury up to five years will be paid as compensation.

However, if your company wants to pay any amount beyond WC compensation, it can pay, but that will not come under the WC Act.

A WC calculator is attached herewith for further calculation on this subject.

Regards,
Jawed Alam.

Understanding Workers' Compensation Calculations

What is the maximum basic to consider for calculating Workers' Compensation (WC)? What is the definition of wages according to the Workers' Compensation Act? What is the maximum WC amount to be given? Please help me search for answers.

Regards,
Vijay

If the employee is not covered by ESI, then the Employees' Compensation Act will apply. However, if ESI is applicable, then he will receive benefits under ESI.

Thank you.

If the ESI Act is applicable to the organization, employees or workers earning above Rs. 15,000 per month will not be covered by the ESI Act. They may be covered by the EC Act if they fall under the definition of "employee" as defined under the EC Act. The WC Act is now called the Employees Compensation Act.

With regards,

There is a maximum salary fixed under the WC Act. As such, the maximum salary is Rs 8000, and 50% or 60% of Rs 8000 is to be multiplied by the factor in order to get the compensation amount. The table forgets to take this provision into account. Therefore, if you input a salary of Rs 100000, it will calculate compensation based on that salary, but it should be limited to Rs 8000. Please make necessary changes in the Excel to incorporate this adjustment.

Regards,
Madhu.T.K