Workmen's Compensation vs. ESIC: Do We Need Both for Construction Workers?

I am the IR in-charge of a reputed construction company. I want to know if we have a workmen's compensation policy at the site that covers all construction workmen under it. Additionally, we also have ESIC applicability at the site for all workmen who draw gross wages below 15,000/-. Could you please advise if both are necessary? Is having a WC policy alone sufficient?

Kindly advice.

I am an IR in charge at a reputed construction company. I want to know if we have a workmen's compensation policy at the site that covers all construction workmen, and if we also have ESIC applicability at the site for all workmen who draw gross wages below 15000/-. Kindly advise if both are necessary. Is a WC policy alone sufficient?

ESIC Coverage and Workmen's Compensation

ESIC is compulsory where the coverage is applicable. Check with the ESIC office to see if your sites are covered. There is no option of not covering them.

For all those not covered, both for locations outside ESIC coverage and those with wages above ₹15,000, you are open to the risk of compensation for any accident. For those employees, you need to take the workman insurance cover. Remember that any other insurance like group cover, accident cover, etc., is not going to cover compensation under the Employee Compensation Act. Courts have already given judgments clarifying that any other cover like accident insurance is an additional benefit to the employees, and the compensation under WC is still applicable. Only workman compensation act insurance cover, which specifically reimburses the compensation under the act, will be adequate.

Incidentally, ensure you are paying cess under the BWOC Act also.

ESIC Coverage vs. Workmen's Compensation Policy

If your workplace falls under ESIC coverage, you must opt for ESIC; then it's not required to take a Workmen's Compensation (WC) policy. If your organization is not under ESIC coverage, you should take a WC policy for all employees. You can easily determine if your organization is covered under ESIC through the ESIC website, i.e., www.esic.nic.in. Alternatively, if you find any ESIC office within 30 KM of your workplace, it is compulsory to enroll your employees under ESIC; otherwise, opt for a WC policy.

ESIC solely focuses on the social security of all employees and serves as a replacement for a WC policy.

Thanks,
Hariom Mishra

Please seek details before posting comments.

1. Whether the site is in an ESI-implemented area? If yes, employees drawing gross up to Rs. 15,000 per month need to be covered under ESI. If there are site employees drawing more than Rs. 15,000 per month, they need to be covered under the Employee Compensation Act policy.
2. If the site is in a non-implemented area, all site employees should be covered under the policy. Either the employees should be covered under ESI or under the policy.

In case the employees are covered under the ESI Act, there is no need to opt for a W.C. Policy.

For individuals earning more than Rs. 15,000/-, you can consider an Accident Insurance Policy to provide coverage in the event of an accident.