Workers' Compensation Insurance & Injury Leave

As a business owner or key decision-maker of a business in today's competitive environment, you have to ensure that your workforce is adequately protected, insured, and taken care of. Injured workers and their compensation are one of the main liabilities for any growing business. This is why Workers’ Compensation Insurance has been a cornerstone for their safety and compensation needs. Workers’ compensation & injury leave is one of the major aspects of this compensation type. Read on to know more.

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Workers' Compensation

Under the Workers Compensation Act of 1923 employers are required to financially compensate their workforce if an accident at the office/ factory or any workplace premise leads to an injury or death of a worker. The injured employees and their dependents are eligible to receive financial backing in case of death or disability. Companies are also liable to compensate them for specific occupational diseases as mentioned by the law, if caused due to the working conditions.

Workers' Compensation Insurance

Derived from the need for employers to pay Workers’ Compensation, Workers' Compensation Insurance came into being. Without a workmen's compensation policy, an employer might have to pay compensation costs from his pocket. This can cause a huge setback for any business, big or small, however, small businesses are more vulnerable. To sum up, this insurance is a commercial insurance policy providing employees with coverage of injury, disablement or death at the workplace.

Workers’ Compensation & Injury Leave in the USA and India

The compensation law is widely prevalent in many parts of the world. The compensation rights in case of work-related injury or disease are taken care of by the means of this law in many nations. The framework and other aspects however differ from country to country.

As per the New York State Workers’ Compensation Law, injury leave may be taken for a specific period (e.g., 6 weeks), or as a shorter work schedule (e.g., working 25 hours per week) or intermittently (that is, taking sporadic leaves). According to the University of Nebraska Omaha, individuals who are eligible to receive this compensation are entitled to receive work-related injury leave with full pay. The leave period is up to 5 scheduled workdays.

In India, this law is more commonly known as Employee Compensation and is governed by The Employee Compensation Act of 1923. The Act doesn’t shed detailed light on Workers’ Compensation & injury leave in India. It, however, mentions the calculations of compensation for disablement or death.

Calculating Workmen Compensation for Injured Workers

Section 4 of the Act discusses the provisions of the compensation amount to be paid by the employer. The wage considered for calculating compensation under the Act is Rs 15,000 as per the government’s new regulations.

- In case of the death of a worker:

Claim Amount= Amount equal to 50% of the monthly wages of the deceased worker X the relevant factor

OR

Amount of Rs 1,20,000, whichever is more

- In case of permanent total disablement:

Claim Amount= Amount equal to 60% of the monthly wages of the injured worker X the relevant factor

OR

Amount of Rs 1,20,000, whichever is more.

Conclusion

A Workmen compensation policy protects both the parties, the employer as well as the worker, making it a win-win situation for both. As an employer, merely buying a worker’s compensation is not enough. It is also essential to learn about the various aspects such as workers' compensation & injury leave that goes with it.

Written By: PolicyBazaar - Updated: 16 November 2022