Employee benefits are an important part of comprehensive compensation package. It is a key factor in attracting and retaining talented employees. These employees’ benefits are available to meet the unique cultural, social, and economic needs of the employees.
Employees benefits includes insurance, medical, profit sharing, stock options, paid time off, dental, life, retirement benefits etc. These are in addition to basic salary. These benefits also includes pension schemes, provident funds, and many groups or individual insurance packages, including perks like mobile phone charges, transport allowance, internet packages, and many more.
Laws under which employees are entitled for benefit
There are various laws under which employees are entitled for employees benefits. These are: Employees’ State Insurance Act, 1948 which extends to those establishments where 10 or more than 10 employees are working and to all employees who are earning less than INR 21,000. Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 applies to that establishment where 20 or more employees are working. The employees who are earning less than INR 15,000 per month are entitled under this scheme. Payment of Gratuity Act, 1972 applies where 10 or more employees are working and to employees who are in continuous service for not less than 5 years.
Employee benefit under labor law
There are two types of employee benefits: Mandatory employee benefits and Supplementary Benefits. Let’s discuss these:
- Mandatory employee benefits: There are 6 mandatory employee benefit:
- Under the Employees’ Provident Funds and Miscellaneous Provisions Acts, there are several benefits fall. These are Employees’ Provident Fund, Employees’ Pension Scheme, and Employees’ Deposit Linked Insurance. The matching employer and employee contributions fund these schemes.
- Employee State Insurance Scheme applies to those employees who are earning upto Rs 21,000 per month. It covers medical expenses for family, STD and LTD benefits, widow’s and children’s pension, and other benefits.
- State’s Shops & Establishments Acts or the Factories Act regulate the statutory leaves. It covers sick leave, casual leave, earned leave, national holidays, State Founding Day etc
- The employees are also entitled to Gratuity which is a payment which becomes due after continuous service of 4 years 8 months, or on termination, resignation, retirement etc.
- The employees are also entitled to paid maternity leaves of 26 weeks. Under Maternity Benefits (Amendment) Act, the establishment with more than 50 employees are required to provide the facility of paid creche for children up to the age of 6 years.
- The employees should be provided compensatory days off for working on holidays and overtime pay of at least two times wages.
- Supplementary Benefits:
- The employees are entitled to group medical insurance which covers hospital expenditure with a waiver or waiting periods and pre-existing disease exclusions, maternity benefits, new born baby cover, and other add-on hospitalization benefits.
- Short-term disability was introduced in India in 2021. If the employee face any defined medical contingencies which leads to hospitalization then employee will be entitled to an aggregate limit of 3 months’ pay per employee. If the leaves are taken due to spouse illness then an employee will be entitled to 50% of the eligible amount.
- The employees are also entitled to group business travel accident policies in which accidental medical, death, personal liability, and travel inconvenience benefits are provided to employees who are travelling in course of their work. In this, the establishment will issue certificate of insurance for each trip. It duration should not exceed 180 days.
- The group term life insurance covers accidental death, permanent total disability, permanent partial disability, double dismemberment, temporary total disability: weekly partial income replacement up to 100/104 weeks, accident-related medicalexpenses, housing and car modifications, child schooling, funeral costs, and other benefits.
These are the employees benefits to which each employees are entitled to. Although these benefits may vary depending upon the establishment but employees are provided some to the benefits.
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