Casual Laborer Passed Away Without ESI or EPFO – How Should We Handle Compensation?

Respected Senior,

One of our casual laborers died on the factory premises. They do not have ESI or EPFO. What can we do now? The labor inspector mentioned that according to workers' compensation policy calculation, we need to pay 6 lakh to his family. His payment is 12000/-.

Please suggest, as this is very urgent.

Compensation for Casual Labor Under the EC Act of 1923

Even casual laborers or their dependents are entitled to compensation under the EC Act of 1923 if they sustain an injury or die in an employment accident while engaged in any work connected with the trade or business of the employer. Since this is a case of death, you must calculate the compensation based on their monthly wages and the relevant factor for their age as set out in Schedule IV of the Act. You should deposit the amount forthwith with the Commissioner for Employees' Compensation in your area. Be aware that any payment made without the involvement of the Commissioner would not be treated as a valid payment.

Thank you, sir.

His age is 32 years. What factor should we use for calculation since we have not purchased any EC policy?

Dear Kumar,

The amount of calculation is as follows:

1) Completed age of the employee = 32 years
2) Relevant factor = 203.85 [As per Schedule IV]
3) Monthly wages = Rs. 12,000-00 but limited to Rs. 8,000-00
4) Amount of compensation = 50% of monthly wages X Relevant Factor [Sec. 4(1)(a)], i.e., 4000 X 203.85 = Rs. 8,15,400-0

In addition to the above sum, you have to pay a sum of Rs. 5,000-00 towards Funeral Expenses and reimburse the medical expenses [Sec. 4(2A)], if any incurred by the employee.

You may check the above calculation.