Workmen Compensation

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Workman Compensation Injury and Settlement Calculation

Calculating a Settlement in a Workman Compensation Injury relies on the incidence. This is the incident which has led to the compensation.

To calculate a settlement for a Workman Compensation Injury, note the following guidelines:

Under the workmen compensation act, 1923, the maximum Monthly Wage allowed for the calculation of compensation is Rs. 8000.

      Workers from the age of 16 years and above are eligible for the compensation

      A relevant Factor is an age-based multiplier defined in Schedule IV of the Act

Compensation in Case of Death:

      50% of the Monthly Wage x Relevant factor as per the age of the worker

      Funeral costs associated with Rs. 5000 are also payable

      The minimum amount payable is Rs. 120,000

Compensation in case of Permanent Total Disability (PTD)

      60% of the Monthly Wage x Relevant factor as per the age of the worker

      The minimum amount payable in this case is Rs. 140,000

Compensation in case of Permanent Partial Disability (PPD)

A percentage of the compensation payable under PTD. To figure out this percentage, we have to estimate how much the worker’s ability to earn has gone down. Also, if there is any permanent disability or death. 

Compensation in case of Temporary Disability (Total or Partial)

      25% of the Monthly Wage of the Worker payable every half month

      The compensation is payable only if the worker is disabled for more than three consecutive days. 

      The maximum tenure for the compensation is five years

Additional Read: Does Workmen Compensation cover employee negligence?

Relevant Factor Schedule IV of Workmen (now Employee) Compensation Act

Age is the completed years of age, of the workman or employee on the last birthday. The last birthday is the latest birthday of the workman. It immediately precedes the due date of compensation liability.

AgeFactorAgeFactorAgeFactorAgeFactor
16228.5429209.9242178.4955135.56
17227.4930207.9843175.5456131.95
18226.3831205.9544172.5257128.33
19225.2232203.8545169.4458124.7
2022433201.6646166.2959121.05
21222.7134199.447163.0760117.41
22221.3735197.0648159.861113.77
23219.9536194.6449156.4762110.14
24218.4737192.1450153.0963106.52
25216.9138189.5651149.6764102.93
26215.2839186.952146.265 or more99.37
27213.5740184.1753142.68
28211.7941181.3754139.13

In conclusion, both employers and employees must understand the process of calculating a settlement in a Workmen Compensation injury. We can make sure the injured worker gets fair compensation under Workmen Compensation insurance. This can be done by considering different factors. We also need to meet legal requirements.

Case on Settlement in Workmen Compensation Injury

Ramashankar Prasad was a part-time dump truck driver at R.J Construction Co. Last week, a lot of large water pipes that he was delivering fell on his vehicle, and he died on the spot.

Another worker was uploading the pipes from the truck, and Prasad was sitting beside him. However, while unloading, the pipes shifted and fell off the truck. This caused Prasad to suffer fatal internal head injuries.

Ramashankar supported his family. His passing brings uncertainties about the future for his family of four. His family includes his elderly mother also.

The passing of 28-year-old Ramashankar also had a significant impact on his relatives. Fondly called Rama by his friends, everyone worried about his family’s future.

Luckily, R.J Construction Co. had a workers’ compensation policy. Accordingly, they gave compensation to Ramashankar’s family, as the law requires. The worker courts determined the payment amount in accordance with their previous judgments.

At the time of the accident, Ramashankar was earning only Rs 8,000. So as per the act, he was liable to get 50% of the Monthly Wage x Relevant factor as per the age. This implies that his family received Rs 8,47,160 (4,000 multiplied by 211.79). The insurer promptly paid the entire amount, and the company incurred no burden.

Before buying a workmen compensation insurance policy, understand how to calculate the settlement amount payable. This will avoid any future problems.