ESI vs. WC: Why Wouldn't Both Apply in the Same Region? Seeking Guidance from Seniors

Dear Seniors, If a region is covered under ESI, why wouldn't WC/EC be applicable? Is there any specific rule for this? Kindly guide me.

Thanks & Regards,
B. Saravanan

Understanding ESIC and Employee Compensation Act

The Employees' State Insurance Corporation (ESIC) Act states that employees covered under ESIC are not covered under the Employee Compensation Act. This is because ESIC already has provisions for compensation. The law will not allow you to claim compensation twice for the same accident.

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Regards,

However, for those with a gross salary above 15,000 per month, there is no ESIC coverage. Naturally, those employees are covered by the Employees' Compensation Act.

Can you please tell me exactly where it is mentioned in ESIC or WC laws?

Dear professionals, I want to learn about handling statutory reports. I need all the information about the ESI Act. Could someone help me?

In an IT organization where the gross salary is above Rs. 15,000, ESIC is not applicable, and even WC is also not opted for. In that case, the company has opted for GPA and GMC through an insurance company. Is that valid?

Regards,
Pranab Chakraborty

There is no law that provides for compulsory insurance cover for WCA (now called ECA). However, given that compensation can be as high as ₹16 lakhs, and insurance cover costs only about ₹1000 per year per person, it makes sense to take that cover. If not, the company runs the risk of having to pay it on its own and therefore exposing itself to a huge impact on profit and cash flow.

Difference Between Group Accident Policy and WC Policy

Group accident policy is not the same as WC policy. The amount of the group accident policy goes directly to the employee. It belongs and accrues to the employee even if the money is paid through the company. The employee or their kin can sue the insurance company for the money if they don't receive it.

WC Compensation, on the other hand, is independent. The company is liable to pay it to the employee or their kin. This will always be in addition to any insurance the employee has either directly or through the company. The WC policy is the amount given by the insurance company to the employer to cover any compensation order the court gives.

Risks for IT Companies

IT companies are also complacent, thinking they are in non-hazardous jobs. However, the employee can get compensation for an accident in the course of work, including, for example, a road accident on the way to a client's office, or to the bank, anywhere that can be connected to their work. So, they are running huge risks.

Dear Saswata, In an IT organization where the gross salary is above Rs. 15000/-, ESIC is not applicable, and even WC is also not opted for. In that case, the company has opted for GPA and GMC through an insurance company. Is that valid?

Regards,
Pranab Chakraborty