Workmen Compensation

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Amount of Compensation Workers are Entitled to Under Workmen Compensation Act

The Workmen’s Compensation Act 1923, aims to protect Indian workers when they suffer an injury due to an accident in the workplace. It helps in estimating the compensation amount payable to the workers in case of injury or death due to the task they perform.   Workmen compensation also serves to protect the interests of employers by laying down strict laws which define the events affecting the liability of the company. It helps protect the business from arbitrary lawsuits and absurd claims of compensation by an injured employee.

Instances eligible for compensation

The Workmen Compensation Act,1923 gives compensation to the employees or their dependents in case of disability or death due to the nature of work during employment. This also includes any occupational disease or industrial accident that the employee may encounter arising out or during the course of employment which leads to disability or death.

Specifically, a worker is entitled to compensation in case of

  • Death
  • Permanent Total Disablement
  • Permanent Partial Disablement
  • Temporary disablement – both total and partial
  • It has contracted an occupational disease

Instances excluded from compensation benefits

Some cases where workers are excluded from compensation under the Workers Compensation Act are:

  • In case of injury or accident occurring due to certain perils or wars
  • When employee   ignored or refused to follow the laid down safety guidelines and mechanisms
  • The employee had suffered the injury under the influence of intoxicants
  • If the accident and the resulting injury does not result in a partial or total disablement lasting more than 3 days

Read About: What is the Workmen Compensation Insurance Policy

Factors that determine workmen compensation

The benefit depends upon the monthly wages earned by the worker, the nature of the injury and a relevant factor defined in the Act. These factors help to calculate the amount for workmen compensation. The compensation also depends on the age of the injured employee. Compensation amount is higher when the worker is of a lower age  and vice versa.

Types of compensations and the respective amounts

Death

The Workmen Compensation Act mandates the employer to pay a compensation amount equal to 50% of monthly wages of the deceased employee. It can be a maximum monthly wage ceiling of Rs. 8000  multiplied by the relevant factor, or a sum of Rs. 140,000, whichever is higher.

Permanent Total Disablement

In case the workman has contracted permanent total disablement due to the injury, the compensation amount applicable will be a sum of Rs. 120,000. It can also be 60% of the monthly wages multiplied by the relevant factor, whichever is higher.

Permanent Partial Disablement

The compensation is calculated pro-rata based on the loss of earning capacity of the workman due to the injury. Some of these are defined in the Workmen Compensation Act 1923, and other specific cases depend upon assessment by qualified medical practitioners.

Temporary Disablement

Whether the temporary disablement is total or partial, the employer is liable to pay a half-monthly payment. The compensation is thus equivalent to 25% of monthly wages, payable on the sixteenth day from the date of disablement. If the disablement continues for 28 days or more, the workers compensation will be payable from the date of disablement. The company can also wait for a period of three days from the date of disablement to decide compensation payable.

Penalty For Default And Delay

Compensation must be paid as soon as it is due. If the employer disagrees with the total amount claimed by the employee or the dependent(s), the former must pay provisional compensation equivalent to the extent of liability that is agreeable to him.
In case of delayed payment by employer, a penalty of 6% per annum for a sum not more than 50% of the total amount is chargeable.

Insurance For Workmen Compensation Liability

The liability stands with the employer and accidents are unpredictable. Therefore, it is recommended that you buy workmen compensation insurance to take care of it. It saves a lot of unnecessary legal and other hassles in case of injury to the employee. Insurers allow you to opt for higher compensation than allowed in the act as per your need. You can use this feature to create a valuable differentiation from your competitors to attract talented contract workers.

Workmen compensation insurance policy benefits the organisation by increasing the motivation levels of the workers towards their employers. It boosts performance as well, knowing that their company covers them in the case of loss of their earning ability. Additional safety measures on your part will certainly help you to reduce the cost of workmen compensation insurance. 

How to Buy Workmen Compensation Insurance?

Buying workmen’s compensation policy is possible with just a few clicks. Visit the online portal of SecureNow and provide details like the number of workers, supervisors to get a suitable plan. Compare multiple plans offered by different insurers and buy online. Once the payment is successful, you will receive the cover letter of your policy instantly. SecureNow also assists you in managing the policy further, like adding and removing employee names from the cover and file the claim to the insurer.

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