ESI or WC – Applicability
When it comes to ensuring the well-being and protection of employees, two important policies come into play: Employees’ State Insurance (ESI) and Workmen’s Compensation Insurance (WC). In the event of work-related injuries or illnesses, these policies provide financial support and medical benefits to employees and their families. Understanding the applicability and differences between ESI and WC is crucial for organisations to ensure compliance and adequately address the needs of their workforce.
Employee State Insurance (ESI)
ESI is a social security and health insurance scheme established under the Employees’ State Insurance Act, of 1948. It applies to establishments with 20 or more employees where employees earn a monthly wage of up to Rs. 21,000. ESI provides medical care, cash benefits, and other amenities to employees during sickness, maternity, and employment-related injury or disablement.
Under the ESI scheme, both the employer and employee contribute a percentage of the employee’s wages towards the insurance fund. Employees contribute 1.75% of their wages to ESI, while employers contribute 4.75%. The employer’s responsibility includes deducting the employee’s contribution from their wages and contributing the employer’s share. The ESI Corporation administers the fund and provides medical and cash benefits to insured employees and their dependents.
Workmen Compensation Insurance (WC)
Workers’ Compensation, also known as Workmen Compensation, is governed by the Workmen’s Compensation Act, of 1923 (now called the Employees Compensation Act 1923). WC is applicable to all establishments, irrespective of the number of employees, where workmen are employed. It provides compensation to employees in case of injuries or death arising out of or during the course of employment. Secure your employees with a workmen compensation policy online, ensuring financial protection in case of workplace injuries or accidents.
Under the WC policy, employers are legally obligated to provide compensation to employees or their dependents for work-related injuries, disabilities, or fatalities. The compensation includes payment for medical expenses, temporary or permanent disability, and death benefits. The amount of compensation varies based on factors such as the nature of the injury, the employee’s monthly wages, and the degree of disablement.
ESI or WC: Applicability and Differences
- The applicability of ESI and WC depends on the number of employees and the type of establishment. ESI applies to establishments with 20 or more employees earning up to Rs. 21,000 per month. On the other hand, WC policy is applicable to all establishments where workmen are employed, regardless of the number of employees.
- The primary objective of ESI is to provide medical care and cash benefits to employees and their dependents. It is a comprehensive social security scheme that covers various aspects of healthcare and financial support. WC, however, specifically deals with compensating employees for work-related injuries, disabilities, or fatalities. It aims to provide financial assistance to employees and their dependents in case of accidents or injuries occurring during the course of employment.
- The benefits provided under ESI and WC also differ. ESI offers medical benefits, including medical consultations, hospitalisation, medication, and maternity benefits. It also provides cash benefits during periods of sickness or temporary disability. Workmen compensation act, on the other hand, provides compensation for medical expenses, temporary or permanent disability, and death benefits to the employee’s dependents in case of a work-related injury or fatality.
Conclusion
In conclusion, understanding the differences between Employees’ State Insurance (ESI) and workers’ compensation insurance is essential for organisations to determine which policy is applicable to their specific circumstances. By complying with the relevant policy, organisations can ensure the well-being and protection of their workforce while meeting their legal obligations. Implementing ESI or WC demonstrates a commitment to employee welfare and creates a positive work environment. Moreover, it instils confidence and trust among employees, knowing that they are covered in case of any unforeseen.
About The Author
Rahul Kumar
MBA Finance
With a wealth of experience in the insurance industry, Rahul is a seasoned writer specializing in articles related to workmen compensation policies (WC policies) for SecureNow. With 12 years of experience in the field, he has acquired in-depth knowledge and expertise in workmen compensation insurance, understanding its complexities and nuances. Their insightful articles provide valuable insights into the importance of WC policies for businesses and employees alike, offering practical advice and guidance on navigating the intricacies of insurance coverage. Trust him to deliver informative and engaging content, backed by years of experience and a passion for educating readers about insurance-related topics.
