What are the types of Fringe benefits ?
Compensation benefits : An employer is liable to pay compensation
- if personal injury is caused to a workman by accident arising out of and in the course of his employment.
- if a workman employed in any employment contracts any disease, specified in the Act as an occupational disease peculiar to that employment.
Insurance benefits : Employee working in industrial establishment and drawing wages upto and including Rs.10,000.00 per month shall be provided insurance benefits under the provisions of Employee’s State Insurance Act,1948. It is a contributory insurance plan under which the employee contributes @ 1.75% of the wages and employer contribute @4.75% of the wages. The act provides for payments various by ESI.
The Employees State Insurance Act (ESI Act) was enacted with the object of introducing a scheme of health insurance for industrial workers. The scheme envisaged by it is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories. The ESI Act, which has replaced the Workmen's Compensation.
PF benefits : A provident fund is created with a purpose of providing financial security and stability to employees. A person starts his contribution in the PF fund once he joins a company as an employee. The contributions are made on a regular basis. The primary purpose of PF fund is to help employees save a fraction of their salary every month so that he can use the same in an event that the employee is temporarily or no longer fit to work or at retirement.
Employers and employees both contribute @12% of wages in contribution accounts. Further, the employers also contribute towards administration of the benefits under the EPF & MP Act.
Maternity benefits : An Act to regulate the employment of women in certain establishments for certain periods before and after child-birth and to provide for maternity benefit and certain other benefits. Woman employee whether employed directly or through any agency ,who has worked for minimum of 84 days in entitled to maternity benefit for a maximum of 12 weeks, including prenatal and post natal periods. If medical care has not been provided to such woman, then the employer shall pay a one time medical bonus of Rs.250. in case of miscarriage, further provision for paid leaves for 6 weeks exists.
Gratuity benefits : Employees working in industrial establishment shall be provided gratuity benefits under the provisions of the Payments of Gratuity Act, 1972. An employee who has worked for not less than 5 years shall be entitled for payment of gratuity on superannuation, retirement, resignations, death and disablement due to accident or diseases as per the following calculation”
Gratuity = (wage last drawn x 15 x service period) / 26
Welfare benefits : Employees working in factories shall be provide welfare benefits under the provisions of the Factories Act 1948.
- Washing facilities
- First aid appliances
- Shelter ,rest rooms and lunch room
- Welfare officer
- Holiday and leave benefits
Voluntary benefits and services are gaining importance for companies' employee value propositions (EVPs). Employers are turning to voluntary benefits and services to personalize their benefit offerings and support their employee rewards strategy. Voluntary benefits and services offerings today tend to be geared toward baby boomers, who are a large segment of today’s workforce. However, as baby boomers begin to retire in increasing numbers across the next decade, expect to see voluntary benefits and services redesigned for younger generations, who are generally attracted to customized benefit packages. Types of Voluntary benefits are :
- Medical Assistance
- Accident Insurance
- Retirement Benefits
- Consumer societies
- Loans and advances
- Education assistance