Will you get compensated for injury at work in India?

An accident that causes serious injuries at workplace (factory floor, construction site, but also office space), can trigger liability for the employer. When do employees have right to claim compensation for their injury?

What is workplace injury in India?

Workplace injury can be caused due to action or inaction to act to avoid unsafe work conditions from injuring employees, such as inadequate workspace lighting, noise pollution, slippery flooring, extreme temperature exposure, lack of protection while working with machinery or hazardous materials, structures that are unstable and therefore collapse, electrical issues, machine failure, absorption, indigestion or inhalation of dangerous substances, and so on.

Compensation laws for injured employees in India

Sometimes, the injury can be due to the employee’s negligence. In that case, the employee cannot be held liable for compensation. However, India’s compensation for injury laws protect employers from legal proceedings by injured employees. If the employer had prior knowledge about the unsafe work conditions and deliberately failed to take action in order to prevent injury, liability will arise. Apart from the employer, injured employees also have the right to seek compensation for their injuries from the makers of faulty or dangerous industrial products.

Businesses employing more than 20 people (in some states, more than 10) should register themselves under the Employees’ State Insurance Act, 1948. Under this act, injured employees can avail both financial (for themselves and their family) as well as medical support. The employer and employee both pay monthly remuneration for the insurance.

For smaller businesses employing less than 20 people have to compensate injured employees under the Employee’s Compensation Act, 1923. According to this Act, it is obligatory for employers/companies to inform employees about their rights to compensation under the Act. This has to be done in writing as well as through electronic means, in English or Hindi or in the official language the employees understand. This can also be mentioned in the company handbooks or policies. If the employer hasn’t made its employees aware about their right to compensation in case of injury, it can risk a penalty, ranging from INR 50 000 (EUR 6 45) to INR 100 000 (EUR 1 285).

It is important to note that an injury to fall within the definition of ‘injury at workplace’ or ‘in the course of employment’, it must either be commissioned or be so connected with an act authorised by the employer.

Compensation for injured employees in India

Employers are obligated by law to compensate employees who – due to the injury suffered – have:

  • become permanently totally   disable; in this case, the employee will not be able to a perform any of their previous duties. This injury must be assessed to permanently affect the employee’s ability to perform their duties. The employee is allowed a minimum compensation of INR 140 000 (EUR 1 801) or 60 % of the monthly salary, increased based on what the employee’s potentially could earn in the future, were he/she not have suffered an injury.
  • become permanently partially disable: in this case, there are no set rules for compensation. Compensation however is dependent upon the nature of the injury and the employee’s loss of earning capacity. Someone who has lost a long would have lost their earning capacity to a larger extent than someone who has just lost a finger.
  • become temporarily disable, the injured employee is paid 25 % of the salary every two weeks, making monthly compensation 50 % of total earned salary. In the case of a death, compensation would amount to INR 120 000 (EUR 1 543), or half of monthly salary increased by a factor based on the employee’s potential future earnings.

Employers cannot be held liable to pay compensation, if the injury does not lead to a disability of the employee in order to do his normal works. It is also possible that the injury is self-inflicted by the employee, for instance in order to be free from the employer. The employee does not have the right to claim compensation in this case. Also, when the injury is a result of intake of disproportionate amounts of alcohol or drugs by the employee while performing his work duties, or when the employee wilfully disregarding safety guards put in place by the company, the employer cannot be held liable for compensation.

Miss Legal India

Are you an employer or an employee and need advice about compensation due to injury at workplace, contact Miss Legal India.


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