This is particularly the case for companies with large labor forces, such as information technology and business process outsourcing (IT-BPO) or industrial companies, but small businesses are also impacted by labor laws that mandate compensation for employees injured on the job.
What laws govern compensation for workplace injuries?
Compensation for workers in India varies depending on the size of the company.
If the business employees more than 20 employees, the Employees’ State Insurance Act, 1948 applies. Under this act, employees and the company pay toward an insurance benefit in case of injury. When a workplace injury occurs, the injured employee is able to avail of both medical and financial support.
If the business employs less than 20 people, the company must refer to the Employee’s Compensation Act, 1923 (Previously, Workmen’s Compensation Act, 1923). This act outlines methods for providing compensation to employees injured on the job. The Act is particularly pertinent to small office places and small-scale manufacturing operations.
The 2017 amendment in the Employee’s Compensation Act, 1923, makes it mandatory for employers/companies to inform its employees of their rights to compensation under the Act, either in writing or electronically, in a language understood by the employee. Failing to do this, the employer is liable to a penalty of INR 50,000 (US$715), which may be extended to INR 100,000 (US$1,431).
When do employers need to compensate an injured employee?
The Act requires employers to compensate an employee who has suffered an accident while performing his/her duties during work hours, resulting into
Permanent total disability,
Permanent partial disability,