1. Introduction

Workplace injuries, occupational diseases, and accidents can create sudden and severe financial stress for employees and their families. The Employees’ Compensation provisions under the Social Security Code, 2020—contained in Chapter 7 (Sections 92–111)—offer a structured and legally enforceable mechanism to ensure that workers receive timely compensation, medical support, and long-term benefits in such situations.

Earlier governed by the Employees’ Compensation Act, 1923, the law has now been modernized and aligned with the unified wage definition under the Social Security Code. This transition simplifies compliance, reduces disputes, and ensures that compensation is calculated fairly and consistently across industries.

Hindi insight:

अगर काम के दौरान दुर्घटना हो जाए, मृत्यु हो जाए या कोई occupational disease हो जाए, तो कर्मचारी या उसके परिवार को आर्थिक सहायता मिलना एक कानूनी अधिकार है — यही Employees’ Compensation की मूल भावना है।

2. Objective of Employees’ Compensation

The core purpose of the Employees’ Compensation system is to:

• Protect employees financially when accidents occur
• Ensure immediate relief to families in death cases
• Compensate for loss of earning capacity due to disability
• Encourage safe work environments
• Hold employers accountable for negligence
• Provide standardized compensation rates

Because industrial, construction, transportation, and hazardous sectors carry high risk, the Code ensures that no worker or family faces economic ruin due to workplace injury.

3. Applicability (Section 92)

Employees’ Compensation applies to:

• Every employee working in hazardous or notified occupations
• Workers outside the ESI coverage area
• Casual, daily-wage, fixed-term, or contractual workers (if employed for work of hazardous nature)
• Apprentices under certain conditions

If ESI applies, compensation for injuries is provided through ESIC.

If ESI does not apply, then Chapter 7 governs compensation.

Hindi explanation:

जहाँ ESI लागू नहीं है, वहाँ दुर्घटना और बीमारी के लिए Employees’ Compensation लागू होगा।

4. When Is Compensation Payable? (Sections 93–94)

Compensation becomes payable when an employee suffers:

1. Personal injury by accident arising out of and during the course of employment

This includes:

• Injuries at workplace
• Injuries during work-related travel
• Accidents due to machinery, tools, or equipment
• Falls, burns, chemical exposure
• Accidents caused by co-workers

2. Occupational diseases

These are diseases contracted due to the nature of employment, such as:

• Lung diseases in mining
• Hearing loss due to continuous noise
• Skin diseases due to chemical exposure
• Toxic poisoning
• Repetitive stress injuries

3. Death due to workplace accident

Compensation becomes payable to dependents.

4. Permanent total or partial disablement

Loss of earning capacity is compensated based on the percentage of disability.

The Code continues the long-established principle:

If the employment caused the injury, the employer must compensate.

5. Amount of Compensation (Section 95)

The compensation amount is determined based on:

• Employee’s monthly wages
• Age factor (from Schedule IV of earlier Act, likely to be retained)
• Nature of injury
• Percentage of disability

Compensation for Death

Minimum compensation =

50% of monthly wages × relevant age factor

or

₹1,20,000, whichever is higher

(The government may revise amounts)

Compensation for Permanent Total Disablement

Minimum compensation =

60% of monthly wages × relevant age factor

or

₹1,40,000, whichever is higher

Permanent Partial Disablement

Compensation =

% loss of earning capacity × amount payable for total disablement

Temporary Disablement

Half-monthly payments until recovery.

Hindi note:

मृत्यु या स्थायी विकलांगता की स्थिति में compensation एक निश्चित formula के आधार पर दिया जाता है ताकि परिवार को आर्थिक सुरक्षा मिल सके।

6. What Counts as “Wages” for Compensation?

The Social Security Code uses the unified wage definition, meaning:

• Basic + DA = at least 50% of total wages
• Lowering basic to manipulate compensation is no longer possible
• Compensation becomes more fair and accurate

This has a direct impact on compensation calculations, especially in industries where allowances were used to reduce statutory payouts.

7. Responsibility of the Employer (Sections 96–98)

Employers must:

• Pay compensation as soon as injury occurs (without waiting for court order)
• Provide medical treatment immediately
• Report fatal accidents to authorities
• Maintain accident registers
• Ensure workplace safety
• File compensation statements
• Facilitate settlements

Employer liability is strict:

Even if the worker was partially negligent, compensation is still payable.

Exceptions:

• If injury did not arise out of employment
• If employee was intoxicated
• If employee willfully disobeyed safety instructions

8. Medical Expenses and Treatment (Section 99)

Employers must provide:

• First-aid
• Hospitalization
• Necessary medical treatment
• Follow-up care

Medical benefits extend until the employee is cured or medically stabilized.

9. Compensation in Case of Death (Section 95 + 100)

When an employee dies due to workplace accident:

• Compensation must be paid immediately to dependents
• Funeral expenses must be reimbursed
• Employer must notify authorities within 30 days

Dependents typically include:

• Spouse
• Minor children
• Widowed mother
• Dependent parents
• Other dependents defined by law

The Code ensures financial stability for families during tragic situations.

10. Occupational Diseases (Section 94)

The Code recognizes a comprehensive list of occupational diseases based on job nature.

If a worker develops such a disease, it is presumed to be due to employment, unless proven otherwise.

This “presumption rule” protects workers in:

• Mining
• Factories
• Chemical plants
• Construction
• Metal and textile works
• Transport sectors

Hindi explanation:

यदि कोई बीमारी नौकरी की प्रकृति से जुड़ी है, तो माना जाएगा कि वह employment के कारण हुई है — यही कानून की बड़ी ताकत है।

11. Appeals, Disputes, and Authorities (Sections 101–107)

If disputes arise regarding:

• Injury
• Compensation amount
• Employer liability
• Percentage of disability

The matter goes to the Competent Authority, whose decision is binding.

Appeals can be made to higher tribunals if necessary.

The Code aims to:

• Reduce delays
• Minimize litigation
• Ensure fair assessment

12. Penalties for Non-Compliance (Chapter 12)

Penalties apply for:

• Non-payment of compensation
• False statements
• Failure to report fatal accidents
• Negligence in maintaining safety
• Obstruction of inspections

Penalties include fines, interest, and in serious cases, prosecution.

13. FAQs (With Chapter References)

FAQ 1: Does compensation apply even if the accident was due to worker’s negligence?

Yes, unless the worker was intoxicated or intentionally violated safety rules.

Relevant: Section 93

FAQ 2: What happens if the employer refuses to pay compensation?

Employee can approach the Competent Authority for an enforceable order.

Relevant: Sections 101–104

FAQ 3: Are contractors responsible for compensation?

Yes, but primary liability is on the principal employer.

Relevant: Section 92

FAQ 4: Does compensation apply during travel?

Yes, if travel is related to employment.

Relevant: Section 93

FAQ 5: What is the minimum compensation for death?

50% of monthly wages × age factor or ₹1,20,000, whichever is higher.

Relevant: Section 95

14. Conclusion

The Employees’ Compensation provisions under the Social Security Code, 2020 ensure strong financial and medical protection for workers facing accidents, injuries, disabilities, or occupational diseases. By aligning compensation with standardized wage definitions and modernizing employer obligations, the Code makes the system more consistent, fair, and transparent.

For employees, this means predictable financial security during emergencies.

For employers, this means clear liability rules and reduced ambiguities.

In an economy where millions of people work in high-risk sectors, compensation remains a vital statutory safeguard — and the Social Security Code significantly strengthens it.