Understanding ESIC vs. Workmen's Compensation Act: What Does the Manufacturing Industry Need?

Respected Seniors and my friends, please help me or provide me with the details of the main differences between ESIC and the Workmen's Compensation Act. Does the manufacturing industry require ESIC or WCA policy? Your suggestion is more important to us.

Regards

Dear Colleague,

ESI and Employees' Compensation (WC) in Manufacturing

ESI and Employees' Compensation (WC) are equally applicable for manufacturing, as detailed below, and they operate independently of each other:

1. ESI is applicable to all NOTIFIED areas (Revenue Villages) that are pre-notified by the ESI Corporation and to those employees whose wages are up to 21,000/- per month. For employees working in an area not notified by ESIC or whose wages exceed 21,000/- Rupees per month, what happens...

2. Employees receiving a salary or wages over 21,000/- Rupees per month, as well as factories located in revenue villages not covered or notified by the ESI corporation, are to be covered under Employees' Compensation.

3. Employees covered under ESI will not fall under the provisions of Employees' Compensation; they must receive benefits or remedies exclusively under ESI and not based on their preference. For example, an employee covered under ESI must avail benefits solely under ESI and not under Employees' Compensation.

Hope this clarifies.

Now, one point I will add to what Dr. Shivakumar said.

Compensation under the Employee Compensation Act

The compensation under the Employee Compensation Act (earlier called the Workman Compensation Act) is significant, especially for young workers. The maximum compensation can go up to as much as ₹40 lakhs, and there are unlimited medical costs payable. Therefore, to avoid the risk to the business, it is better to take a Workman Compensation Insurance Policy.

Insurance Policy Considerations

It is important to note that a normal policy, accident policy, or medical reimbursement policy will not cover costs under the Employee Compensation Act. Courts have already decided that the compensation is payable even if there is insurance money paid under an individual policy, group policy, or accident policy.