Understanding Employee Compensation Act
I want to be aware of a few points regarding the Employee Compensation Act. If an employee receives a salary less than or equal to ₹15,000/-, ESIC is applicable. Individuals earning more than ₹15,000/- fall under EC.
1. Please let me know how to handle and calculate the EC part when an employee has an accident during employment.
2. Similarly, how should we treat accidents that occur outside working hours, such as on the way to or from the office? How much time falls under the EC part?
3. Is the EC calculation solely the employer's responsibility, or should labor officials be involved as well?
I am awaiting a prompt and informative response.
Thanks & Regards,
Satya
From India, Bangalore
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2I want to be aware of a few points regarding the Employee Compensation Act. If an employee receives a salary less than or equal to ₹15,000/-, ESIC is applicable. Individuals earning more than ₹15,000/- fall under EC.
1. Please let me know how to handle and calculate the EC part when an employee has an accident during employment.
2. Similarly, how should we treat accidents that occur outside working hours, such as on the way to or from the office? How much time falls under the EC part?
3. Is the EC calculation solely the employer's responsibility, or should labor officials be involved as well?
I am awaiting a prompt and informative response.
Thanks & Regards,
Satya
From India, Bangalore
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Dear Satyanarayana,
The employee receiving a salary of Rupees 15,000/- or less is covered under the provisions of the Employees' State Insurance Act, 1948, and the liability of compensation and/or benefits will be provided by the Employees' State Insurance Corporation. Employees earning more than Rs. 15,000/- will be covered under the provisions of the Employee Compensation Act, and the liability of compensation lies with the employer.
Compensation Calculation for Accidents
In the event of an employee meeting with an accident, the employer will calculate the compensation as per the formula below:
(age x factory x salary/wages as per Act) / _____% (in case of permanent disablement)
Handling Accidents Outside Working Hours
To address accidents occurring outside working hours, have the employee fill out a form at the time of appointment stating their residence distance in kilometers and the time taken to reach home. Maintain a register at the workplace to track out-timings after the completion of their work to determine if the accident occurred during work hours.
During payment, the management cannot directly compensate the employee or the legal heir of the deceased employee. The management is required to pay the compensation to the Commissioner under the Employees Compensation Act, via Demand Draft and/or Cheque.
I trust the above information addresses your query; for any further clarification, please feel free to ask.
Thank you.
From India, Gurgaon
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The employee receiving a salary of Rupees 15,000/- or less is covered under the provisions of the Employees' State Insurance Act, 1948, and the liability of compensation and/or benefits will be provided by the Employees' State Insurance Corporation. Employees earning more than Rs. 15,000/- will be covered under the provisions of the Employee Compensation Act, and the liability of compensation lies with the employer.
Compensation Calculation for Accidents
In the event of an employee meeting with an accident, the employer will calculate the compensation as per the formula below:
(age x factory x salary/wages as per Act) / _____% (in case of permanent disablement)
Handling Accidents Outside Working Hours
To address accidents occurring outside working hours, have the employee fill out a form at the time of appointment stating their residence distance in kilometers and the time taken to reach home. Maintain a register at the workplace to track out-timings after the completion of their work to determine if the accident occurred during work hours.
During payment, the management cannot directly compensate the employee or the legal heir of the deceased employee. The management is required to pay the compensation to the Commissioner under the Employees Compensation Act, via Demand Draft and/or Cheque.
I trust the above information addresses your query; for any further clarification, please feel free to ask.
Thank you.
From India, Gurgaon
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My husband met with a bike accident on 1st Nov. 2009 (Sunday). He resumed his services on 1st Feb. 2010. For 3 months, he was not paid. He is working in a private organization. In such a case, can any private organization help the employee who met an accident outside office timing?
From India, Mumbai
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From India, Mumbai
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Dear Sir, Thank you for your immediate response. I have some confusion regarding the points mentioned below. Please provide further clarification.
1. The difference between Death, PTD, and PPD lies in the calculation method. For the first one, it is calculated as wages x percentage (50/60) x Age factor. Do we need to consider the loss of earning capacity here? When referring to wages, does it mean MW, basic, or total present drawing wage? (I believe that in the case of death or PTD, there is no need to consider the loss of earning capacity).
2. Regarding PPD, the calculation involves wages x percentage (50/60) x Age factor x Loss of earning capacity. Am I correct in understanding this?
Please provide more information on the above points.
Regards, Satya
From India, Bangalore
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1. The difference between Death, PTD, and PPD lies in the calculation method. For the first one, it is calculated as wages x percentage (50/60) x Age factor. Do we need to consider the loss of earning capacity here? When referring to wages, does it mean MW, basic, or total present drawing wage? (I believe that in the case of death or PTD, there is no need to consider the loss of earning capacity).
2. Regarding PPD, the calculation involves wages x percentage (50/60) x Age factor x Loss of earning capacity. Am I correct in understanding this?
Please provide more information on the above points.
Regards, Satya
From India, Bangalore
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Employee's Compensation Act-2009.pdf
THE EMPLOYEE COMPENSATION ACT.docx