Compensation for Work-related Injury and Occupational Disease in China

Before employees can make a claim for work-related injury or occupational disease compensation at their local Labour Dispute Arbitration Committee (LDAC), their degree of disability has been assessed and officially certified by the Labour Appraisal Committee. There are ten grades of disability, determined by the Standard Assessment of the Seriousness of Work-related Injuries and Occupational Diseases (zhigong gongshang yu zhigong bingzhican chengdu jianding biaozhun) issued by the Ministry of Labour and Social Security in 1996. Grades one to four are the most serious and indicate that the employee no longer has any ability to work; grades 5 and 6 signify that an employee has lost most of their ability to work, while workers with grade 7 to 10 injuries are classified as partially disabled. By law, employers are required to pay the medical expenses of employees suffering from work-related injuries as well as a disability allowance based on the seriousness of the injuries.
 
The Work Disability Scale
 
Grade 1: Loss of an organ or complete or irreplaceable loss of organ function; requiring special medical care and support; complete loss or serious loss of the ability to care for oneself, e.g. severe damage to cognitive functions and intelligence, loss of sight in both eyes.
 
Grade 2: Severe damage to or deformity of an organ; serious functional deficiencies or complications; requiring special medical care and support; complete loss or serious loss of ability to care for oneself, e.g. serious damage to cognitive intelligence; loss of sight in one eye and less than or equal to eight percent of normal vision in the other.
 
Grade 3: Severe damage to or deformity of an organ; serious functional deficiencies or complications; requiring special medical care and support; partial loss of ability to care for oneself, e.g. loss of a hand, dangerous and impulsive behaviour caused by psychotic disorders; serious disfiguration on the face.
 
Grade 4: Severe damage to or deformity of an organ; serious functional deficiencies or complications; requiring special medical care and support but capable of self-care, e.g. psychotic diseases leading to social skills deficiencies; medium level of facial disfiguration and scars over 70 percent or more of the body.
 
Grade 5: Major damage to or deformity of an organ; major functional deficiencies or complications; requiring general medical care but capable of self care, e.g. complete loss of speech due to motor speech disorders; complete loss of ability to read and write (agraphia); moderate facial disfiguration, loss of thumb.
 
Grade 6: Major damage to or deformity of an organ; moderate level of functional deficiencies or complications; requiring general medical care but capable of self care, e.g. incomplete loss of speech, serious colourization or dis-colourization on the face.
 
Grade 7: Major damage to or deformity of an organ; moderate functional deficiencies or complications; requiring general medical care but capable of self care, e.g. partial damage to thumb; loss of toes, except the big toe; removal of half the small intestine.
 
Grade 8: Partial damage to or deformity of an organ; moderate functional deficiencies; requiring moderate medical care but capable of self care, e.g. change of personality due to psychotic disorders; speech difficulties.
 
Grade 9: Partial damage to or deformity of an organ; moderate functional deficiencies that do not require medical care, e.g. damage of skull with an area of less than 25 square centimetres, no loss of function; able to eat after an esophagectomy.
 
Grade 10: Partial damage to or deformity of an organ; no functional deficiencies; not requiring medical care, and capable of self care, e.g damage to skull with an area of  less than 9.24 square centimetres; moderate colorization or discolourization on the face.
 
The amount of compensation employees receive for work related injuries is closely related to their disability grade. The State Council’s 2003 Work-Related Injury Insurance Regulations specify the rights and the amount of compensation that a worker is entitled to. The key points are summarized below:
 
Disability Grades One to Four
The employee shall retain their labour relationship with the employer, but retire from their position and receive:
1. A lump sum disability payment equivalent to:
Grade 1: 24 month’s wages;
Grade 2: 22 month’s wages;
Grade 3: 20 month’s wages;
Grade 4: 18 month’s wages;
 
2. A disability allowance paid each month and equivalent to:
Grade 1: 90 percent of their monthly wage;
Grade 2: 85 percent of their monthly wage;
Grade 3: 80 percent of their monthly wage;
Grade 4: 75 percent of their monthly wage.
 
Grades 5 and 6
The employee shall receive:
A lump-sum disability payment equivalent to:
Grade 5: 16 month’s wages;
Grade 6: 14 month’s wages;
 
The employee’s labour relationship shall be retained and the employer shall arrange for suitable employment. If a suitable post can not be arranged, the employer shall pay a disability allowance each month equivalent to:
Grade 5: 70 percent of the employee’s monthly wage;
Grade 6: 60 percent of the employee’s monthly wage.
 
If the employee wishes to terminate their labour relationship, their employer shall pay the cost of medical treatment together with the lump sum disability allowance.
 
Grades 7 to 10
The employee shall receive:
A lump-sum disability payment equivalent to:
Grade 7: 12 month’s wages;
Grade 8: 10 month’s wages;
Grade 9: 8 month’s wages;
Grade 10: 6 month’s wages.
 
If the employee’s labour contract expires or the employee wishes to terminate the contract, the employer shall pay medical expenses as well as the lump sum disability allowance.
 
Fatal Accidents
In the case of a fatal accident, the employee’s relatives will be entitled to:
1. A lump sum compensation payment equivalent to between 48 and 60 month’s average salary in the region in which the fatality occurred.
2. A lump sum funeral subsidy equivalent to six month’s average salary in the region in which the fatality occurred;
3. A monthly pension for relatives who have no ability to or who were dependent on the employee who died:
40 percent of the deceased employee’s monthly wage for the spouse
30 percent of the deceased employee’s monthly wage for other relatives
An additional 10 percent of the deceased employee’s monthly wage for the aged or orphaned.
The total sum of the pensions paid shall not exceed the wage of the deceased worker.
 
Although it has never been explicitly stated by the government, the State Council’s Work-Related Injury Insurance Regulations seem to be the basis for the 200,000 yuan compensation package paid across China to the bereaved families of coal mine accident victims.
 
The 200,000 compensation standard was first introduced on 30 November 2004 by the Shanxi government in its Regulations on enforcing responsibility for mine safety to prevent exceptional loss of life in accidents. This provincial legislation stipulated that the operator of a mine that had been the scene of a fatal accident must pay out at least 200,000 yuan in compensation for each mineworker killed. After their promulgation, these provisions were approved by the central government’s State Administration of Work Safety and reproduced by regional governments in other areas. Liaoning, Guizhou, Hebei, Jiangxi, Yunnan and Shaanxi provinces all drafted similar legislation, and 200,000 yuan very quickly became the “national benchmark” for compensation payments.
 
During an interview with the widow of a victim of the Dongfeng Coal Mine disaster in November 2005, CLB Director Han Dongfang recorded details of the compensation agreement the bereaved family had signed with the mine operators. It stipulated that the total value of compensation for the family should be set at 205,356.56 yuan, consisting of three elements: a funeral subsidy of 5,139 yuan (856.5 yuan x six months), a lump-sum industrial fatality benefit of 41,112 yuan (856.5 yuan x 48 months), and a bereavement consideration of 159,105.56 yuan.
 
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