Does Having an ESI Number Mean We Can Skip the Workmen Compensation Policy?

Dear Sir, I am currently employed at a Construction Company that has already been assigned an ESI number. We have secured contracts with various companies, such as Power Project, where the HR representatives of the principal employer are requesting our Workmen Compensation Policy for our staff and laborers working on their premises.

Could you please clarify whether having the ESI number and our staff being covered under the ESI Scheme exempts us from the necessity of obtaining a Workmen Compensation Policy?

Regards,
SANDEEP KUMAR SRIVASTAVA

Normally, ESI will be covered area-wise and not nationwide. Whereas the WC Policy can be obtained for the entire nation or even for worldwide workers/staff. As your company's registered office is covered under the Shops and Commercial Establishment Act, the company HR might have obtained ESI Registration for those employees working with less than Rs. 15,000/- per month. In some places, ESI Exempted areas are also available. For employees working with more than Rs. 15,000/- per month and workers working in construction sites, WC Policy coverage is necessary.

In view of the above, you must obtain the WC Policy for all employees who are earning more than Rs. 15,000/- per month and for workers engaged in construction sites.

Thank you.

Yes, Mr. Bhasker rightly said, if your employees are covered under ESIC, there is no need for a Workers' Compensation policy because the Workers' Compensation Act does not apply to you.

Regards

As per the WC Act, WC will not exist where ESI is applicable. According to the above-mentioned information, consider WC for over 15,000 gross employees.

Regards,
Hari

Above two pieces of advice are correct.

If an employee is drawing wages less than Rs. 15,000 per month, they shall be covered under the ESI Scheme. The ESI Scheme is a nationwide program, but there are some difficulties that need to be addressed for its implementation.

Coverage for Employees Earning More Than Rs. 15,000

However, what about employees drawing more than Rs. 15,000 per month? For those employees not covered under the ESI Scheme, they must be covered under the Employee's Compensation Act (formerly known as the Workmen's Compensation Act).

Regards,
Tirupathi Raju/Advocate
Advisor - Labour Laws

In addition to the above, I have two pieces of advice:

Please note that where the ESI is applicable, the Workmen's Compensation (WC) doesn't apply. At a time, the implementation of multiple special legislations is not possible as per the law.

Employees drawing wages more than Rs. 15,000/- are out of ESI coverage. Hence, you have to make your own arrangements for compensation (it may be equal to the WC Act or above/below as per your company's policy/rules).

In my opinion, a group personal accident policy (GPA) is preferable for employees/workers' benefits, and mediclaim for their medical treatment.

Regards,
Kaleswara Rao
HR Professional

ESI vs W.C. Act

Both are two separate acts. If the ESI Act is applicable, it takes care of employees covered under the Act regarding their health, sickness benefits, employment injury treatment, etc., and in case of any untoward incident (death/loss of limb), compensation payments.

Regarding uncovered employees (temporary employees/employed in outstation works where ESI is not applicable, who are not covered), it is the bounden duty of the employer to cover them by taking a W.C. Policy. Otherwise, management is held responsible for all consequences/compensation. To avoid all unnecessary complications/unrest and in the interest of cordial employee relations, it is better to have a W.C. Policy.

Regards,
D. GURUMURTHY HR/IR CONSULTANT

Please check your contract agreement clause and take action accordingly.

1. If the clause states that you must have an EC Policy, you need to comply with the client's demand, and no option is left for you.

2. If there is no such clause, you may address the matter with the right person at the client's end.

3. It is advisable to have an Umbrella Policy to cover risks. This is in the interest of your company as well as your client.

Best regards,
SV
[Phone Number Removed For Privacy Reasons]

How to Apply for Workmen Compensation Policy

I am seeking information on how to apply for a workmen's compensation policy. Could someone kindly explain what it entails? Seniors, could you please provide a brief overview?

Regards,
Smitha

If a company gives a subcontract to its contractor for a 1- or 2-month work period, and the total number of workers under the subcontractor is 4 to 5, can we opt for a workmen's compensation policy instead of ESIC?