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Employee compensation for injury at work

The employer’s liability for injury, death or occupational disease arising out of employment, how compensation is worked out, and where ESI takes its place.

Applies to:
All India (Central)
For:
HR, Admin
Last reviewed:

When the employer is liable

Under Chapter VII of the Code on Social Security (which replaced the Employees’ Compensation Act, 1923), an employer pays compensation when an employee is injured, dies or contracts a listed occupational disease through an accident arising out of and in the course of employment — including, under the Code, an accident on the way between home and work.

Employees covered by ESI claim through ESIC’s employment injury benefits instead, and the employer is not separately liable for those.

How compensation is worked out

  • Pay compensation within one month of it falling due; interest and a penalty apply to delay.
  • Report serious accidents to the authorities the OSH Code and state rules name, and keep the accident record.
The relevant factor falls with age and is set out in the Code’s schedule; wages for this purpose are capped at the amount the Government notifies.
OutcomeCompensation
Death50% of monthly wages × the relevant factor for the employee’s age, subject to the notified minimum
Permanent total disablement60% of monthly wages × the relevant factor, subject to the notified minimum
Permanent partial disablementA percentage of the permanent-total amount, by the loss of earning capacity
Temporary disablementHalf-monthly payments of 25% of monthly wages, after a short waiting period

References

  1. The Code on Social Security, 2020 — Chapter VII (India Code)
  2. ESIC — employment injury and disablement benefit

Related

Plain-language guidance for HR teams, not legal advice. Checked against the sources above on 29 September 2026; the notification or your authority’s portal is final. Spotted something out of date? Tell us.