Is ESI Coverage Necessary for Contractors with Workmen's Compensation at Our Site?

Dear All,

I have a query relating to ESI. Ours is a Power Project. We have many contractors working at our construction site. All the contractors have covered their workers under the Workmen's Compensation Act. Is it mandatory to cover them under ESI as well if they have a WC policy? We have an ESI hospital in our area. Please advise whether both are mandatory.

Regards,
Sunitha

Applicability of ESI and Employee Compensation Act

If the employees are covered under ESI, then the Employee Compensation Act will not be applicable. If the area is not covered, then the Employee Compensation Act would be applicable. Both acts cannot be applicable at the same time.

Regards

Yes, both acts will have to be covered. Both acts cannot be clubbed together even though both are for the welfare of the employee. Under the Workmen's Compensation Act, compensation is provided to employees for any losses incurred during their employment.

For example, if an employee has both hands amputated due to a work-related accident, they would be considered 100% disabled under the Workmen's Compensation Act and would receive compensation according to the provisions of the Act. In contrast, under the ESIC Act, the employee would only receive reimbursement for the treatment expenses.

Please let me know if you have any questions or need further clarification.

Thank you.

If the employees are receiving a gross salary of ₹15,000 or below, they all fall under the ESI Act. The rest of the employees are covered under the EC (Employee Compensation) Act. If ESI coverage is available in your area, you can proceed as mentioned above.

Best Regards,
M. Suresh

Clarification on ESI and EC Benefits

Ms. Basina is not correct. An insured person (IP) will receive medical benefits and disablement benefits at 150% of the Standard Benefit Rate (SBR) from the Employees' State Insurance Corporation (ESIC) if he/she suffers an employment injury. An employee covered under the Employees' Compensation (EC) Act, instead of the Employees' State Insurance (ESI) Act, will receive full medical expenses and disablement benefits from the employer for an employment injury. If the accident is not considered an employment injury, the IP will only receive medical benefits.

Regards,
VARGHESE MATHEW TVPM

As per the ESIC Act, the zones covered are mentioned. If your workplace falls within that ESIC zone, it is mandatory. Regarding the WC Policy, it is mandatory for areas where the ESIC Facility doesn't exist. Alternatively, both acts are for Employee Welfare. However, it is not mandatory from the statutory compliance point of view to have both. Also, if the need arises, you can opt for any other medical cum insurance policies instead of ESIC or WC and avail exemptions against the same.

Please refer to the ESIC Act for more details.

Thanks,
Bijay

I just want to add one thing: ESIC has a cap of ₹15,000/-. So, if a person's Gross Salary/Wages are greater than ₹15,000.00, he can be covered under the WC policy. This is because his medical insurance or any accident needs to be covered.

Mostly, in construction sites, construction workers are covered under the EC (WC) policy.

Regards