Differentiation between Workers Compensation & Employee State Insurance

In India, various insurance policies provide different kinds of cover to the employees of an organization. Being an employer comes with some responsibilities towards their employees. That’s where Workers Compensation Insurance policy (WC) and Employee State Insurance come up. These are the two insurance policies offered to employees in India. Although both of them offer similar benefits to the employees, they are different in some ways. Let us tell you the difference between WC and ESI.

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Workers Compensation Act 1923 & Employee State Insurance Act 1948

Workers Compensation Act, 1923 is an employee compensation act. Some specific classes of employers must compensate for the medical expenses their employees or workmen faced 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 that resulted in death or disability. The Act covers the workmen in factories, mines, construction and hazardous activities.

Employee State Insurance Act, 1948 is 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 is applicable to Indian companies. Companies employing workers in India as well as foreign countries. The Workers Compensation policy provides cover for any kind of bodily injury caused by an accident while performing duty, any bodily injury caused by disease, death or temporary disablement, permanent or partial disablement, legal costs and expenses incurred with the company’s consent.

Employee State Insurance is applicable in India and provides cover to all the places of business. Usually, it is applicable for restaurants, hotels, newspaper establishments, transport undertakings and cinemas etc. It is mandatory for the employee who has a monthly wage below or equal to Rs. 21,000 per month. Then only the employer will be responsible to get the employee covered under ESI. For employees with a disability, the monthly salary limit extends to Rs. 25,000. It provides cover for medical expenses, maternity benefits, hospitalization, surgery, unemployment benefits, disablement, injuries caused while performing the duty. In the case of the death of the employee, the kin of the deceased gets an amount of Rs. 15,000.

Workers Compensation and Employee State Insurance: Claiming Process

The steps to file the claim for Workers Compensation Insurance are as follows:

  • The employer must be informed about the death or disablement of the employee immediately.
  • In case of an accident takes place in the workplace, the factory inspector should be informed immediately.
  • As per the requirement of the insurance provider, the employer must gather all the information and documents.
  • After that, the employer must deposit all the documents to the insurer.
  • Then it will depend on the insurer if he approves or denies the claim.

There is not a specific claiming procedure for Employee State Insurance. The insured can claim for two types of benefits and they are as follows:

  • Medical Benefits: To avail of the medical benefits, you or your dependents will have to visit the ESIC- specified impaneled hospitals with your ESI card.
  • Cash Benefits: Employees and workers can also avail cash benefits in case of sickness, disablement, maternity, unemployment, dependent, funeral costs etc.

You can check the status of your claim on UMANG app provided by ESIC. Follow the steps below:

  • Download UMANG app
  • Enter 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 to see the details you can use the advanced search option.

Certain Other Distinctions between WC & ESI

 

Workmen Compensation

Employees State Insurance

Wage Limit

Rs. 21,000

No Limit

Nature of Scheme offered

Contributory (4.75% by employer & 1.75% by employee)

Non-contributory

Responsible for payment

ESIC

Employer

Compensation Paid

Periodically

Paid one-time lump sum in cash

Rehabilitation or Re-employment

For Disabled

No such provisions

Nature of claim process

Easy & Convenient

Complex & Time consuming

Act administered through

ESIC, Standing Committee, Medical Benefit Council, Court

Commissioners

Conclusion

Both Worker compensation and Employees State insurance serve almost the same purpose but are different. But the sole purpose of both of the insurance policies is to take care of the well-being of the employee. Both of them come with different eligibility criteria. You can always check it online if you are eligible enough to get yourself insured under any of these plans. So better be insured under an insurance plan that can provide coverage to you and your dependents at the time of any mishappening or medical emergency.

Written By: PolicyBazaar - Updated: 06 March 2024

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Policybazaar for Business - Workmen Compensation Insurance - Customer Reviews
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