Employee’s compensation

Introduction
 The Code on Social Security, 2020 (the Code) aims to provide social security benefits to all employees and
workers.
 This includes gig workers, platform workers, and unorganised workers.
 The Code also recognizes non-conventional forms of work, such as gig work, self-employment, and platform
work
 Chapter VII (Employee’s Compensation) of the Social Security Code, 2020 envisages, inter-alia, provisions
relating to employer’s liability for compensation in case of fatal accidents, serious bodily injuries or
occupational diseases.
Legal provisions under the code
Sec 73 Reports of fatal accidents and serious bodily injuries..
1. Reporting Requirement: Employers must report any accident resulting in death or serious bodily injury on
their premises to the appropriate authority within seven days. The report should detail the circumstances of
the incident.
2. Provision for State Government: The State Government can expand this reporting requirement to other
types of premises and specify who should submit the report.
3. Definition of Serious Bodily Injury: Serious bodily injury includes permanent loss or injury to limbs, sight, or
hearing, as well as fractures or enforced absence from work for more than twenty days.
4. Exception: This section doesn't apply to establishments covered under Chapter IV of the Employees' State
Insurance Corporation.
Sec 74 Employer’s liability for compensation
1. Employer's Liability for Compensation: If an employee suffers personal injury due to an accident or
occupational disease listed in the Third Schedule while working, the employer must compensate them
according to this Chapter. However, there are exceptions:
 The employer isn't liable if the injury doesn't cause total or partial disablement for more than three
days.
 The employer isn't liable if the injury, not resulting in death or permanent total disablement, is
directly caused by:
 the employee being under the influence of alcohol or drugs,
 the employee willfully disobeying safety rules,
 the employee deliberately ignoring safety devices.
2. Deeming of Accidents/Occupational Diseases: Accidents or occupational diseases are considered to have
occurred during employment even if the employee was acting against laws or employer orders, as long as
the action was related to the employer's business.
3. Occupational Diseases: If an employee contracts a disease listed in the Third Schedule while employed for at
least six months in a specified occupation, it's considered an injury by accident unless proven otherwise.
4. Commute-Related Accidents: Accidents during commuting to or from work are considered work-related if
there's a clear connection between the accident and the employment circumstances.
5. Government Modification of Schedule: The Central or State Government can modify or add employment
types or occupational diseases in the schedules. Once modified, the rules apply as if they were declared
under this Code.
6. Exception to Compensation: Compensation isn't payable if the accident or disease isn't directly related to
the employment.
7. Limitation on Lawsuits: Employees can't claim compensation in court if they've already filed a claim or
reached an agreement with the employer according to this Chapter.
Sec 75 compensation in case of death of or injury in plantation
House Collapse ResponsibilityIf a worker or their family member dies or gets injured because their house provided
by the employer collapses, and it's not due to the occupant's fault or a natural disaster, the employer has to pay
compensation as per Section 76 and the Sixth Schedule rules.
Who is Considered a Worker
In this section, a "worker" refers to someone employed in a plantation for payment, directly or through an agency, to
perform any type of work, including skilled, unskilled, manual, or clerical work. This definition includes individuals
employed on contract for more than sixty days in a year, but excludes:
 Medical officers employed in the plantation.
 Individuals whose monthly wages exceed a certain amount determined by the appropriate Government.
 Individuals primarily employed in managerial or administrative roles, regardless of their monthly wages.
 Individuals temporarily employed in construction, development, or maintenance work related to buildings,
roads, bridges, drains, or canals in the plantation.
Sec 76 Amount of compensation.
1. Compensation Amounts:
 If an employee dies due to the injury, their family gets an amount equal to fifty percent of the
employee's monthly wages, multiplied by a factor set by the government.
 If there's permanent total disablement, the employee gets an amount equal to sixty percent of their
monthly wages, multiplied by the set factor.
 If there's permanent partial disablement, the compensation is based on the injury's impact on
earning capacity, as specified in the Fourth Schedule.
 For temporary disablement, the employee gets a payment equal to twenty-five percent of their
monthly wages, payable every half-month for up to five years.
2. International Accidents: If the accident happens outside India, the compensation amount is adjusted based
on the compensation awarded in the country where the accident occurred.
3. Monthly Wage Specification: The Central Government can specify the monthly wages for compensation
purposes.
4. Payment Schedule for Temporary Disablement: Payments for temporary disablement are made every half-
month, starting either from the sixteenth day of disablement or after a three-day waiting period, depending
on the duration of disablement.
5. Medical Expenses: The employer must reimburse the employee's actual medical expenses for treating work-
related injuries.
6. Ceasing of Disablement: If the disablement ends before a scheduled payment, a proportionate amount is
paid for that period.
7. Funeral Expenses: If the employee dies, the employer must deposit a minimum amount, determined by the
State Government, for funeral expenses of the employee's eldest surviving dependent. The Central
Government can increase this amount through notification.
Sec 78 Method of calculating monthly wages for purposes of compensation.
1. Definition: "Monthly wages" refers to the amount of wages considered payable for a month's service,
irrespective of the payment frequency (monthly, other periods, or piece rates).
2. Calculation Method:
 (a) For employees with a continuous service of at least twelve months before the accident:
 Monthly wages equal one-twelfth of the total wages due in the last twelve months.
 (b) For employees with less than one month of continuous service:
 Monthly wages are the average amount earned by a similar employee in the same work and
locality over the last twelve months.
 (c) In other cases, where calculation under (b) is not possible:
 Monthly wages are thirty times the total wages earned in the last continuous period of
service, divided by the number of days in that period.
3. Continuous Service: Continuous service refers to a period uninterrupted by an absence from work exceeding
fourteen days.