Workmen Compensation

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How to Calculate a Settlement in a Workmen Compensation Injury?

Workers’ compensation is estimated in the following manner based on the incidence which has led to the compensation:

Before the calculation following should be noted:

  • Maximum Monthly Wage Allowed for the calculation of compensation under the Act is Rs. 8000
  • Workers from the age of 16 years and above are eligible for the compensation
  • Relevant Factor is an age-based multiplier defined in Schedule IV of the Act
  1. Compensation in Case of Death:
  • 50% of the Monthly Wage x Relevant factor as per the age of the worker
  • Funeral expenses of Rs. 5000 are also payable
  • The minimum amount payable is Rs. 120,000
  1. Compensation in case of Permanent Total Disability (PTD)
  • 60% of the Monthly Wage x Relevant factor as per the age of the worker
  • Minimum amount payable in this case is Rs. 140,000
  1. Compensation in case of Permanent Partial Disability (PPD)
  • A percentage of the compensation payable under PTD.  But this percentage needs to be estimated based on the “extent of the reduction in earning capacity” of the worker.
  1. 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

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 which is immediately preceding 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

See: (Workmen Compensation Policy?)

Case on Settlement in Workmen Compensation

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 him, and he died on the spot.

Another worker was uploading the pipes from the truck, and Prasad was sitting beside him. However, during the unloading, the pipes became unsettled, and they fell over the truck and on Prasad who died due to internal head injuries. Being the breadwinner of the family, the death of Ramashankar puts a question mark on the future of his family of four people, including his senior-citizen mother. For relatives, also, the death of a 28-year old Ramashankar came as a blow. Fondly called Rama by his friends, everyone was worried about the future of his family.

Luckily, R.J Construction Co. had a workman compensation policy which paid compensation to Ramashankar’s family, in line with the provisions of law. The worker courts decided the amount to be paid un line with their previous judgements. 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. It means, his family got Rs 8,47,160 (4,000×211.79). This entire amount was immediately paid by the insurer and there was no burden on the company.

Understand the ways to calculate settlement amount payable under the workmen compensation policy before buying it.

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