Employe Benefits

Contents
Introduction Common & Uncommon Benefit Programs Fringe Benefits & its importance Leave Benefits Monetary Benefits Non Monetory Benefits ESI Act EPF Act Summary

Introduction

Compensation and benefits structures have been

changing over the last few years and the major drivers for these changes are, Changing income tax rules in India Viewing compensation on a total remuneration basis Changing employee expectations: want more cash compensation Introduction of fringe benefit tax

Common benefit programs

Uncommon benefit programs

FRINGE BENEFITS
Benefits given to employees in addition to their salary or wage are called fringe benefits.
These include the following: Rent free accommodation Free uniforms Subsided food Leave travel concession Leave with pay Company vehicles for use Medical reimbursement Free education for employees children Insurance Provident fund, gratuity and pension Consumer co-operative stores Company organized tours, etc

Importance of fringe benefits

Fringe benefits are importance as these: Satisfy certain needs of the employees. Make the employees more loyal to the enterprise Motivate employees to perform their jobs well. Help to develop employer-employee relationships. Meet the demands of trade unions. Ensure the welfare of employees. Improve the image of the concern. Help to fulfill certain legal obligations of the enterprise.

Hospitalization cover
Majority of the companies across sectors provide this benefit across all management levels excluding employees covered under mandatory requirements Companies are using the floater policy option to provide this benefit to the employees Most commonly employee, spouse and children are covered under this program. Only about 40% of companies extend this benefit to dependent parents Coverage amounts vary by management level rather than age
Management level
Senior management

Median coverage amount (INR)

300,000

Middle management
Junior management

275,000
200,000

Personal accident insurance

Majority of the companies across sectors provide this benefit across all management levels excluding employees covered under mandatory requirements. Interestingly, more companies provide it as fixed amount as compared to multiple of salary.
Management level
Senior management

Median coverage amt. (INR) Multiples of gross salary

800,000 36 months

Middle management
Junior management

600,000
500,000

36 months
24 months

Car program
Typically provided at middle management and above, in some cases provided to junior management (30 per cent) Senior management: 92 per cent Middle Management : 63 per cent Over 50% of companies have it as a company leased program Replacement period ranges from 3 to 4 years