Employee Benefits

 

Companies provide their employees and workers with a variety of benefits. These benefits are basically forms of value or services that are provided by an employer to his employees for their contribution in the performance of the organisation. Such benefits are an important component of a company's remuneration package for attracting and retaining its employees. The benefits serve as incentives to the employees and encourage them to work harder for the organisation.

The employee benefits of a company generally includes:-

1. Wages as a compensation for contribution of services by employees

2. Bonus to the employees either on festive occasions or as a reward for their contribution in the high performance of the firm

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3. Social security benefits for employee welfare in the form of provident fund, gratuity, medical facilities, compensation and insurance policies

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  • Provident Fund: Provident fund is a fund that provides benefits to the employees of a company (who are members of the fund), upon termination of their employment. Both the employees and the employer are required to make contributions to the fund in accordance with the predetermined rates.

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  • Gratuity: Gratuity is a lump sum payment made to the employees based on the duration of their total service. The gratuity benefit is payable on cessation of employment (either by resignation, death, retirement or termination, etc) by taking the last drawn salary as the basis for the calculation.

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  • Medical Facilities: This includes health care facilities provided by a business enterprise to its employees in case of their sickness, accident or diseases. The health care facilities may include a proper arrangement for the treatment of the employees and their dependents, on free or concessional rates. The organisations may provide for regular medical check-ups of its employees, at least once a year.

The employees may also be provided with

  • medical allowances;
  • reimbursement of medical expenses:
  • medical leave, etc.

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  • Compensation: This is the amount payable by the employer to the employees for injuries sustained by them in the course of their employment. It covers the medical expenses or any other expenses incurred by the employees in the course of doing the work-related activities.

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  • Insurance Policies: Insurance cover for the employees of a company is an important aspect of social security benefits package. It includes insurance policies relating to medical benefits, compensation to worker's as well as provident funds.

 

4. Different types and number of leaves so that the employees may revitalize themselves and contribute their best effort to the organization.

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Various Government Acts, Policies and Schemes Governing Employee Compensation and Benefits are: