How the 2017 Amendments to the Employees Compensation Act Impact Employers and Employees

Main amendments introduced by the Act

The employer needs to inform an employee of his rights to compensation under the Act in writing as well as through electronic means. Failure to do so will make the employer liable to a penalty.

Penalties have been increased from a maximum of Rs. 5000 to a definite penalty of Rs. 50,000, which may extend to Rs. 1 lakh.

The minimum amount involved in a dispute for which an appeal may be filed with the High Court has been increased from Rs. 300 to Rs. 10,000, or such higher amount as the Central Government may, by notification, specify.

Appeals can be made against orders related to compensation, distribution of compensation, award of penalty or interest, etc., only if the amount in dispute is at least three hundred rupees.

Under the original Act, if an employer has appealed against a Commissioner's order, any payments towards the employee can be temporarily withheld. The Commissioner may do so only by an order of the High Court, until the matter is disposed of by the Court. The Amendment Act deletes this provision.

Employee Compensation Act and Its Applicability

I have read your posts and various threads on the subject; however, there is one point that has not been mentioned anywhere. Could you please help me with the same?

1. Is the Employee Compensation Act mandatory under the Factories Act?
2. If yes, can the Finance, HR, and Quality teams be covered under the insurance?
3. A total of 7 permanent employees and one Japanese employee are working in our organization. Do we need to cover them all under the Employee Compensation Act?

Please help me in getting the answers to the above questions.

Regards, Yamini