Accident at work in India — employee compensation for injury or death under the Code on Social Security, 2020 (old Employees’ Compensation Act, 1923): who is covered, commuting accidents, how much compensation, 2-year claim limit, interest and penalty for delay, ESI-covered workers and road accidents on duty (2026)
Plain guide for workers and families after a workplace accident — a factory, construction site, shop, transport or office job — or an occupational disease: the employer’s liability under Chapter VII of the Code on Social Security, 2020 (in force from 21 November 2025, replacing the Employees’ Compensation Act, 1923), how compensation is calculated for death and disability, medical and funeral costs, notice and the 2-year claim period, the competent authority, delay interest and penalty, and when ESIC or a motor accident claim applies instead. Educational only — not legal advice. Adhiwakta does not file claims or contact employers.
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First steps after the accident
Get medical treatment and make sure the hospital records how the injury happened (an MLC is usually made for serious injuries). Tell the employer in writing as soon as possible — name, address, cause and date of the injury (s.82(3)); the notice can be given by registered post, electronically or in the employer’s notice-book. Keep the ID card, salary slips, attendance and bank credits that show employment and wages. Note the names of co-workers who saw the accident. For deaths, keep the FIR, post-mortem report and death certificate.
Which law applies now
From 21 November 2025, Chapter VII (ss.73–99) of the Code on Social Security, 2020 governs employee compensation; the Employees’ Compensation Act, 1923 (old Workmen’s Compensation Act) stands repealed, but older search terms still use its section numbers — s.3 liability (now s.74), s.4 amount (s.76), s.4A interest and penalty (s.77), s.10 claim (s.82), s.30 appeal (s.99). Pending matters and earlier orders continue under the savings clause. If the worker is covered under ESI, employment-injury benefits are paid by ESIC instead (temporary and permanent disablement benefit, dependants’ benefit), so check the ESI card first.
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When the employer is liable
The employer must pay compensation for personal injury caused by an accident or a listed occupational disease ‘arising out of and in the course of employment’ (s.74(1)). An accident while commuting between home and the workplace for duty is also covered if its link with the employment is shown (s.74(4)). There is no liability for injury that disables for 3 days or less; and for injuries that do not cause death or permanent total disablement, the employer can avoid liability if the accident was directly caused by the worker being drunk / drugged, wilfully disobeying a safety order or removing a safety guard. Workers of a contractor can claim from the principal employer, who can recover from the contractor (s.85).
How much compensation
Under s.76: on death — 50% of monthly wages × the ‘relevant factor’ for the worker’s age (Sixth Schedule), or the amount notified by the Central Government, whichever is more; on permanent total disablement — 60% of monthly wages × relevant factor, or the notified amount, whichever is more; on permanent partial disablement — the percentage of loss of earning capacity (Fourth Schedule or medical assessment) of the PTD amount; on temporary disablement — half-monthly payments of 25% of monthly wages (up to 5 years). In addition, actual medical expenses are reimbursed by the employer, and on death the employer must deposit at least ₹15,000 towards funeral expenses. Younger workers get a higher factor, so the age on the last birthday matters.
Payment, delay interest and penalty
Compensation must be paid as soon as it falls due. If the employer disputes part of it, it must still make a provisional payment of the amount it accepts (s.77(2)). If it defaults beyond one month, the competent authority shall order interest and may also order a further penalty of up to 50% of the arrears if there was no justification for the delay (s.77(3)), after hearing the employer. In death cases, compensation must be deposited with the competent authority, which hears the dependants and distributes it (s.81); a direct payment by the employer is not treated as compensation, apart from an advance of up to three months’ wages — so do not accept small cash ‘settlements’ in place of the deposit.
Where and when to claim
If the employer does not pay, file a claim before the competent authority for employee compensation (earlier called the Commissioner for Employees’ Compensation — usually an officer of the State Labour Department) for the area where the accident happened or where the worker / dependant lives. The claim must normally be filed within 2 years of the accident or of death (s.82(1)); delay can be excused for sufficient cause, so a late claim is still worth raising with reasons. Attach proof of employment, wages, age, medical / disability certificates and, for death, the relationship of dependants. Either side can appeal to the High Court within 60 days on a substantial question of law (s.99).
Road accidents on duty, civil suits and criminal cases
If a driver, helper or delivery worker is hurt in a road accident on duty, a claim can be made either before the Motor Accident Claims Tribunal or under employee compensation law, but not both (Motor Vehicles Act s.167) — compare which is better before filing. Similarly, filing an employee-compensation claim bars a separate civil suit for damages for the same accident (s.74(7)). Where gross negligence such as no safety equipment caused death, a police case under BNS s.106(1) (old IPC 304A) and complaints to the factory / labour inspector are separate routes.
Papers usually needed
Claim application in the prescribed form; employment proof (ID card, appointment letter, PF / ESI number, salary slips, attendance, bank credits, co-worker statements); age proof; medical records, MLC, disability certificate from a medical board; FIR and post-mortem report and death certificate in death cases; list of dependants with relationship proof; bank details; and copies of letters sent to the employer.
How Adhiwakta can help
We do not file compensation, ESI or MACT claims, or contact any employer, insurer or labour office. Adhiwakta is a facilitation platform, not a law firm. We do not file cases, appear before any authority, or promise any result. Use Ask Adhiwakta to describe your situation for general guidance from an independent advocate, or start with the AI helper to organise your facts and papers. Educational only — not formal legal advice.
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Frequently asked questions
- Which law gives compensation for an accident at work in India?
- Chapter VII of the Code on Social Security, 2020, in force from 21 November 2025, which replaced the Employees’ Compensation Act, 1923. ESI-covered workers get employment-injury benefits from ESIC instead.
- How much compensation is paid on death of a worker?
- 50% of monthly wages multiplied by the relevant factor for the worker’s age, or the amount notified by the Central Government, whichever is more (s.76), plus a funeral deposit of at least ₹15,000. It is deposited with the competent authority and distributed among dependants.
- Is an accident on the way to work covered?
- Yes, an accident while commuting between home and the workplace for duty is treated as arising out of employment if its link with the employment is established (s.74(4)).
- What is the time limit to file a compensation claim?
- Normally 2 years from the accident or from death (s.82). The competent authority can accept a late claim if there was sufficient cause for the delay.
- What if the employer delays payment?
- If compensation is not paid within one month of falling due, the competent authority shall order interest and may add a penalty of up to 50% of the arrears where the delay is unjustified (s.77).
- Can I claim both under employee compensation and in MACT for a road accident on duty?
- No. Motor Vehicles Act s.167 gives a choice of one forum — the Motor Accident Claims Tribunal or the employee compensation authority — not both.
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