Workers Compensation Act 1923 & Employee State Insurance Act 1948
Workers Compensation Act, 1923:Â An employee compensation act. Some specific classes of employers must compensate for the medical expenses their employees or workmen face after an accident or injury during work. It enables the workers and their dependents to get compensation from their employer if they get injured while performing their duties resulting in death or disability. The Act covers the workmen in factories, mines, construction and hazardous activities.
Employee State Insurance Act, 1948:Â A Self-financing social security and health insurance scheme for workers in India. It protects against sickness, maternity, disablement and death due to employment injury and provides medical care to the insured employees and their families. The workers registered under the ESI Act will be provided with full medical care during the period of incapacity, restoration of health and working capacity. Also, financial assistance is provided to compensate for the loss of wage during the period of absence due to sickness, maternity and injury. It also provides medical care to the employee's family members.
Workers Compensation and Employee State Insurance: Applicability and Coverage
Workers Compensation Insurance enables employers to fulfil their legal and financial obligations under the Workmen's Compensation Act, 1923, and other labour laws in India by covering compensation claims for workplace injuries, illnesses, or disabilities. The policy ensures that workers receive medical benefits, lost wages, and compensation for temporary or permanent disabilities caused by workplace accidents.
On the other hand, ESIC provides financial and medical support to employees in case of sickness, maternity, work-related injuries, disabilities, and death. It helps workers and their families by covering medical expenses, lost wages, and other benefits, ensuring financial stability and dignity during difficult times.
 It is mandatory for employees earning ₹21,000 or less per month, with an extended salary cap of ₹25,000 for employees with disabilities. ESI coverage includes:
- Medical expenses and hospitalization
- Maternity benefits
- Unemployment benefits
- Compensation for work-related injuries and disabilities
Workers Compensation and Employee State Insurance: Claim Process
The steps to file the claim under Workers Compensation Insurance are as follows:
- The employer should be notified immediately in the event of an employee's death or disablement.
- If an accident occurs in the workplace, the factory inspector must be informed without delay.
- The employer is responsible for collecting all necessary information and documents as required by the insurance provider.
- Once gathered, these documents must be submitted to the insurer for claim processing.
- The insurer will then review the claim and determine its approval or rejection based on policy terms.
There is no specific claiming procedure for Employee State Insurance. However, the insured can claim for the following benefits:
- Medical Benefits: To avail of the medical benefits, the worker or their dependents will have to visit the ESIC-specified empanelled hospitals with their ESI card.
- Cash Benefits: Employees and workers can also avail of cash benefits in case of sickness, disablement, maternity, unemployment, funeral costs etc.
You can check the status of your claim on the UMANG app provided by ESIC. Follow the steps below:
- Download the UMANG app.
- Enter the IP number or the ESIC insurance number and tap on ‘Get OTP'.
- Enter OTP and tap on submit.
- Then tap on 'Claim status' under the service menu.
- Then you will get to see the status of your claim and for more details, you can use the advanced search option.
Certain Other Distinctions between WC & ESI
|
Employees State Insurance |
Workmen Compensation |
| Wage Limit |
Rs. 21,000 |
No Limit |
| Nature of the Offered Scheme |
Contributory (3.25% by employer & 0.75% by employee) |
Non-contributory |
| Coverage Scope |
ESI offers a wider range of benefits, including medical care, maternity support, sickness benefits, and temporary disability coverage. |
Workmen compensation insurance provides financial support for work-related injuries, covering temporary or permanent disabilities and death benefits. |
| Required Number of Employees |
The minimum employee requirement for Employers' State Insurance (ESI) registration is 10 in certain states, while in others, it is set at 20. |
Workers compensation policy does not have a fixed minimum employee requirement. |
| Act Administered Through |
ESIC, Standing Committee, Medical Benefit Council, Court |
Commissioners |
| Claim Process Filing |
Filed & paid by ESIC |
Filed & paid by employers |
Conclusion
While both Workers' Compensation Insurance and Employee State Insurance Corporation (ESIC) aim to protect employees' well-being, they differ in scope, coverage, and eligibility. WC primarily compensates for work-related injuries and disabilities, whereas ESI offers a broader range of medical and financial benefits to eligible employees.
Understanding the differences between the two is crucial in ensuring the right coverage for your employees. Whether mandated by law or chosen for additional protection, having the right insurance can provide financial security for both workers and their dependents during unforeseen accidents or medical emergencies.
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