fringe benefit

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fringe benefit

  1. 1. METAS ADVENTIST COLLEGE SECOND SEMESTER MBA HUMAN RESOURCE MANAGEMENT PROJECT “FRINGE BENEFIT” PREPARED BY: KAREENA BHATIA : GB054 SUBMITTED TO: DR. S. ELIAH DATE: 28th APRIL 2014
  2. 2. Definition of 'Fringe Benefits' A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are met. Any employee who receives taxable fringe benefits will have to include the fair market value of the benefit in their taxable income for the year, which will be subject to tax withholdings, and social security benefits payments. Fringe benefits commonly include health insurance, group term life coverage, education reimbursement, childcare and assistance reimbursement, cafeteria plans, employee discounts, personal use of a company owned vehicle and other similar benefits. The fringe benefits tax (FBT) was the tax applied to most, although not all, fringe benefits in India. A new tax was imposed on employers by India's Finance Act 2005 was introduced for the financial year commencing April 1, 2005. The fringe benefit tax was temporarily suspended in the 2009 Union budget of India by Finance Minister Pranab Mukherjee. The following items were covered:  Employer's expenses on entertainment, travel, employee welfare and accommodation. The definition of fringe benefits that have become taxable has been significantly extended. The law provides an exact list of taxable items.  Employer's provision of employee transportation to work or a cash allowances for this purpose.  Employer's contributions to an approved retirement plan (called a superannuation fund).  Employee stock option plans (ESOPs) have also been brought under fringe benefits tax from the fiscal year 2007–08.
  3. 3. 1. Salary packaging Fringe benefits are usually substituted for cash salary and wages because the fringe benefits are either free from tax, or attract less tax that the equivalent cash salary and wages. If salary is sacrificed into superannuation (see Salary sacrifice), the employer superannuation contribution is not a fringe benefit as long as it is made for the employee (and not, for example, for the employee’s spouse) and to a complying superannuation fund. 2. Fringe benefits — general A fringe benefit is a benefit provided to an employee (or an associate of an employee, such as a spouse) by the employee's employer, an associate of the employer (eg a related company) or by a third party under an arrangement with the employer. To be a fringe benefit, the benefit:  must be 'provided' to the employee (or to someone related to the employee) — the employer must do something, or allow something to be done, that results in the employee receiving the benefit, and  must be 'in respect of employment' — a benefit provided for another reason, eg for family reasons (the employee being related to the employer), would not satisfy this. A fringe benefit is a form of pay for the performance of services. For example, you provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work. Although generally voluntary, some of the most important “fringe” benefits have actually come to be expected from employees. These major types of fringe benefits include health insurance, retirement plans and paid time off. Information regarding these benefits is covered in the Health Insurance, Retirement Plans and Leave and Time Off sections. Fringe benefits covered in this section include:
  4. 4.  Flexible Hours  Transportation Benefits  Bonuses  Severance  Adoption Assistance  Childcare Assistance  Educational Assistance  Employee Assistance Programs (EAPs)  Life Insurance  Long-Term Care Insurance  Company Vehicles  Chart of Tax Treatment of Various Types of Fringe Benefits Flexible Hours To stay competitive and thrive in today’s marketplace, small businesses need to use every tool available at their disposal. Fortunately, modern technology provides many such tools. One of the most important is the ability of your workforce to work a non-traditional schedule. Flexible hours, also called “flextime” or “telecommuting,” are schedules in which employees spend a portion of their workday onsite, and the rest from home or another location. For example, a flextime schedule might require an employee to work onsite from 9:30 am- 2:30 pm, and complete his or her work for the day from somewhere else. Transportation Benefits Transportation (Commuting) Benefits This section discusses exclusion rules that apply to benefits you provide to your employees for their personal transportation, such as commuting to and from work. These rules apply to the following transportation benefits:
  5. 5.  De minimis transportation benefits.  Qualified transportation benefits. Special rules that apply to demonstrator cars and qualified nonpersonal-use vehicles are discussed under Working Condition Benefits. Bonuses In addition to a base salary, some employers pay an annual bonus to employees, often at the end of the calendar year. Bonuses can be tied to employee performance, such as a formal employee performance review. In this sense, the bonus is used as a reward of employees’ quality of work, rather than hours or other quantities of work that employers use to pay base wages.  Employers are generally not obligated to provide employees bonuses, so long as they meet the minimum wage and overtime requirements of the federal Fair Labor Standards Act (FLSA) and any applicable State wage and hour laws.  As far as non-exempt employees are concerned, the FLSA, with some exceptions, requires bonus payments to be included as part of an employee's regular rate of pay in computing overtime. Severance Employee reductions and terminations are an unfortunate result of economic downturns. Even in good economic times, however, businesses of every size carefully assess their operational structures and may sometimes decide to reduce their workforce. When employers are forced to issue layoffs, they sometimes provide these laid-off employees severance pay and related benefits. What is Severance? Severance is typically a cash payment- similar to temporarily continued wages- made to employees who lose their jobs. Severance pay eases the employee’s transition to being unemployed and, in the ideal world, briefly replaces lost wages until an individual finds new employment.
  6. 6. Adoption Assistance Employers may choose to provide financial benefits to employees for the purpose of covering all or part of the cost of adopting a child. Some of the advantages to providing an adoption assistance program include improving employee productivity, Educational Assistance An educational assistance program is a benefit that pays for the job-related education of one or more of your employees. These policies allow employees to improve their knowledge and skills in a field that they can apply to your business. Thus, educational assistance can be mutually beneficial to both employers and employees. Generally, the longer the relationship between the employee and employer, the more educational investment in the employee will pay off. Employee Assistance Program (EAP) An Employee Assistance Program (EAP) can provide support services both on a company-wide basis as well as to individual employees and family members experiencing personal issues and challenges. The structure and operation of an employee assistance program will vary with the needs of each individual company. EAP Objectives  Improve productivity and functioning of the employee population  Help employees to identify and resolve personal issues which may affect job performance including: o Health o Marital o Family o Financial o Alcohol and drug abuse o Stress
  7. 7. EAP Basic Components The following is a summary of basic service components that may be included in an Employee Assistance Program:  Identifying and assessing employee problems and concerns that may affect job performance.  Establish procedures to determine when to provide short-term problem resolution services and when to make a referral to professional and/or community resources.  Provide crisis intervention services to employees and eligible family members.  Develop programs and services that support a drug-free workplace.  Monitor each employee’s case as well as follow-up services.  Consult to companies regarding the availability of health benefits covering medical and behavioral problems, including alcoholism, drug abuse, and mental and emotional disorders. EAP Policy When developing an Employee Assistance Program, it is prudent to develop a written policy that defines the program's relationship to the company as well as reinforces stringent confidentiality standards. The policy should also define the scope of services provided. It is also important to establish basic guidelines to evaluate the effectiveness of your program. Choosing an EAP Counselor If you are considering developing an EAP for your company, it would be prudent to consider an outside consulting service with specific experience in serving organizations of your size. Be sure to evaluate the expertise and background of the EAP counselors who will be supporting your firm. Also, identify if there are any conflicts of interest which could include a counselor who has worked for your company in some capacity or may have family who are or have been employed by your company. Other Types of Employer-Provided Insurance In addition to health insurance, employers may offer employees, their spouses and dependents a number of other types of insurance benefits. These include:
  8. 8.  Life Insurance  Long-Term Care Insurance  Disability Insurance  Accident Insurance Other Types of Employer-Provided Insurance In addition to health insurance, employers may offer employees, their spouses and dependents a number of other types of insurance benefits. These include:  Life Insurance  Long-Term Care Insurance  Disability Insurance  Accident Insurance Company Vehicles To ensure adequate transportation to and from work and other business destinations, some employers provide their employees company-owned or leased vehicles. Generally, if a business owner believes that providing an employee with a car or truck will add productivity or security to business operations, the owner may decide that purchasing or leasing a vehicle is worth the costs. Tax Treatment of Various Types of Fringe Benefits for 2010 The following chart comes from the IRS publication, 15-B. It provides a helpful summary of various types of fringe benefits and related tax treatments.
  9. 9. Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare Federal Unemployment (FUTA) Accident and health benefits Exempt1,2, except for long-term care benefits provided through a flexible spending or similar arrangement. Exempt, except for certain payments to S corporation employees who are 2% shareholders. Exempt Achievement awards Exempt1 up to $1,600 for qualified plan awards ($400 for nonqualified awards). Adoption assistance Exempt1,3 Taxable Taxable Athletic facilities Exempt if substantially all use during the calendar year is by employees, their spouses, and their dependent children and the facility is operated by the employer on premises owned or leased by the employer. De minimis (minimal) benefits Exempt Exempt Exempt Dependent care assistance Exempt3 up to certain limits, $5,000 ($2,500 for married employee filing separate return). Educational assistance Exempt up to $5,250 of benefits each year. See Educational Assistance
  10. 10. Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare Federal Unemployment (FUTA) Employee discounts Exempt3 up to certain limits. See Employee Discounts Employee stock options See Employee Stock Options Group-term life insurance coverage Exempt Exempt1,4 up to cost of $50,000 of coverage. (Special rules apply to former employees.) Exempt Health savings accounts (HSAs) Exempt for qualified individuals up to the HSA contribution limits. See Health Savings Accounts Lodging on your business premises Exempt1 if furnished for your convenience as a condition of employment. Meals Exempt if furnished on your business premises for your convenience. Exempt if de minimis. Moving expense reimbursements Exempt1 if expenses would be deductible if the employee had paid them.
  11. 11. Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare Federal Unemployment (FUTA) No-additional-cost services Exempt3 Exempt3 Exempt3 Retirement planning services Exempt5 Exempt5 Exempt5 Transportation (commuting) benefits Exempt1 up to certain limits if for rides in a commuter highway vehicle and/or transit passes ($230), qualified parking ($230), or qualified bicycle commuting reimbursement6 ($20). Transportation (Commuting) Benefits Exempt if de minimis. Tuition reduction Exempt3 if for undergraduate education (or graduate education if the employee performs teaching or research activities). Volunteer firefighter and emergency medical responder benefits Exempt Exempt Exempt Working condition benefits Exempt Exempt Exempt
  12. 12. Treatment Under Employment Taxes Type of Fringe Benefit Income Tax Withholding Social Security and Medicare Federal Unemployment (FUTA) 1 Exemption does not apply to S corporation employees who are 2% shareholders. 2 Exemption does not apply to certain highly compensated employees under a self- insured plan that favors those employees. 3 Exemption does not apply to certain highly compensated employees under a program that favors those employees. 4 Exemption does not apply to certain key employees under a plan that favors those employees. 5 Exemption does not apply to services for tax preparation, accounting, legal, or brokerage services. 6 If the employee receives a qualified bicycle commuting reimbursement in a qualified bicycle commuting month, the employee cannot receive commuter highway vehicle, transit pass, or qualified parking benefits in that same month. Are Fringe Benefits Taxable? Any fringe benefit you provide is taxable and must be included in the recipient's pay, unless the law specifically excludes it. The Fringe Benefits Guide of the Internal Revenue Code sets forth a number of tax exclusions identified by the IRS as applied to fringe benefits. These rules exclude all or part of the value of certain benefits from the recipient's pay. For example, an employee’s gross income does not include the following types of qualified fringe benefits:  Accident and health benefits.
  13. 13.  Adoption assistance.  De minimis (minimal) benefits.  Dependent care assistance.  Educational assistance.  Group-term life insurance coverage.  Health savings accounts (HSAs).  Meals.  Moving expense reimbursements.  No-additional-cost services.  Retirement planning services.  Transportation (commuting) benefits.  Tuition reduction. Policy: General Policies 1. The University of Tennessee provides several fringe benefits to employees. While some of the fringe benefits are provided university wide, others are provided to specific employees by their departments or colleges. Fringe benefits are a form of pay (including property, services, cash or cash equivalent) in addition to salary for the performance of services. These benefits include items such as meals and lodging (other than travel reimbursements), tickets, tuition waivers, etc. 2. Unless expressly excluded or deferred until a later year under the Internal Revenue Code (IRC), all taxable fringe benefits should be included in the employee’s gross income in the year in which they are received. Non-Taxable Fringe Benefits 3. No-additional cost services are defined as any service provided for use by an employee if the service is offered primarily for sale to students and third parties and the university incurs no substantial additional
  14. 14. cost in providing the service to the employee. Examples are recreational facility use and tickets to events that have not sold out. IRC §132(b) 4. Working condition fringes are any property or service provided to an employee that if the employee had paid for, the payment would be deductible as a business expense. Examples are business use of the following: wireless communication devices (see FI0730), university provided automobiles (see FI0725), airplanes and chartered flights, club memberships, professional dues, publications and meetings. With the exception of university provided wireless communication devices, any personal use of these items is considered taxable income. Effective January 1, 2011, the IRS ruled the value of any personal use of an employer-provided cell phone primarily for noncompensatory business purposes is excludable from the employee’s income as a de minimis fringe benefit. IRC §132(d), Notice 2011-72 5. De minimis fringes include any property or service provided to an employee infrequently and that has a value so small that accounting for it is unreasonable and administratively impractical. Examples include occasional theater or sporting event tickets, group meals or picnics, awards and gifts – (see FI0720 for more information on gifts and awards). IRC §132(e); Reg. §1.132-6(b) 6. A qualified employee discount allows an employee to obtain property or services from the university at a price below that charged to the general public. Generally, a qualified employee discount cannot exceed 20%. Otherwise, it may be taxable. IRC §132(c)(1)(B) 7. Qualified transportation fringes are pre-tax alternatives designed to help meet an employee's personal transportation needs, such as commuting to and from work. Examples include qualified parking and qualified transportation (see Flexible Benefits on The System Payroll Office website). IRC §132(f)(5)(C) 8. Meals and lodging provided to an employee may be non-taxable under certain circumstances. To qualify as non-taxable, the benefits must be in-kind (cash allowances do not qualify), provided for the university’s convenience and on the university’s business premises. An additional requirement for university-provided housing is that it must be required as a condition of employment for the employee to properly fulfill the duties of his/her employment. IRC §119
  15. 15. 9. Uniform allowances may be considered ordinary and necessary business expenses and therefore non-taxable to the employee when the uniforms are (1) specifically required as a condition of employment and (2) not adaptable for general use (that is, cannot be worn as ordinary clothing or a replacement for ordinary clothing). An example is a police uniform. IRC §162 10. Educational tuition assistance (both undergraduate and graduate level) provided to employees is often non-taxable, subject to certain parameters. IRC 117(d); IRC 127; IRC 132(d) 11. Employer reimbursements to employees for the cost of their professional licenses/certificates and professional organization dues may be excludable if they are directly related to the employee's job. Once an employee has completed the education or experience required for a professional license, the expenses necessary to maintain a license or status are considered ordinary and necessary business expenses and therefore are not taxable to the employee, when paid directly or reimbursed by the university subject to substantiation requirements (i.e. receipts). When paid or reimbursed by the university for an employee, the fees are a working condition fringe benefit. The expense, however, cannot qualify the employee for a new trade or business or assist them in meeting the minimum qualifications for their current job. For example, the university pays the annual CPA license fee for the facilities director each year. The facility director does not use his CPA expertise on the job for the university. Because the facility director does not use his CPA expertise in his university capacity, it is not a working condition fringe benefit and is subject to Federal income, social security and Medicare taxes. Furthermore, if the CPA license is a minimum requirement for the position, the payment for review courses or other expenses associated with obtaining this license would also be consider taxable. Taxable Fringe Benefits 12. Cash fringe benefits, such as gift cards and gift certificates, are generally always taxable. While not an exhaustive list, some taxable non-cash fringe benefits identified by the university as being subject to employment tax and reporting are:
  16. 16. o Apparel allowance – Value of a merchandise credit provided to certain employees that allows them to acquire apparel and goods directly from an outside vendor. o University provided vehicle – Value of personal use of a university-provided vehicle (including courtesy cars). o Club membership – Value of university-paid club memberships and related expenditures to the extent that such activities are not documented to serve a bona-fide university business purpose. o Gift certificates – Value of any cash-equivalent gift certificate awarded to an employee (see FI0720 for additional information). o University-provided housing – Market value of lodging provided by the university that does not meet the tests for exclusion as identified above. o Tickets – Value of season tickets/passes to events for which there is no bona-fide business purpose or the no-additional cost service exclusion does not apply. o Spousal travel/meals – Value of university-paid travel and meals for the spouse of a university official or athletic department employee when the spouse’s attendance serves no documented official University business purpose (if spouse’s attendance is primarily social in nature, this does not qualify as a bona-fide business purpose). When the aircraft is a university-provided plane (university owned or chartered), and 50% or more of the regular passenger seating capacity of the plane is filled with employees flying for substantiated business reasons, the value of the flight will not be included in the income of those employees who are flying for personal reasons. This also applies to spouses and dependent children, surviving spouses, and retired employees. Reg. 1.61-21(g)(12) o Graduate tuition – Value of university-paid tuition credits taken by an employee enrolled in a graduate degree program, where the total tuition benefit exceeds $5,250 in a calendar year and does not qualify as job-related education. Exception – Graduate education benefit provided to graduate students who are performing research or teaching for the university is not subject to tax. If the courses being taken are required by the University
  17. 17. to maintain or improve skills for your current job or are required to keep your present salary, status or job, the graduate tuition waiver would not be taxable. To document this, the employee is required to complete the Employee Request for Job Related Tuition Exemption Form. o Third party provided benefits – Generally, if a third party pays or provides a fringe benefit to a university employee in connection with the employee’s performance of services for the university, the payment is considered taxable income to the employee. University imposed withholding and reporting requirement occurs when the benefit is part of the employee’s employment contract, contemplated during the employment process, or provided by a third party via agreement with the University. Where a third party provides a benefit to a university employee on its own and without the approval of the university, the taxable value of this fringe is not considered taxable wages reportable by the university on the employee’s W-2. The employee should be aware that there still may be income tax consequences from such an arrangement; however, in this case, the university has no withholding or reporting obligations with regard to the benefit. Reporting Taxable Fringe Benefits 13. Departments/colleges that provide fringe benefits to employees must consult the System Payroll Office to ascertain whether the benefit is taxable and if not taxable, to ensure that the appropriate documentation is being maintained to support exclusion from taxable income. 14. Generally, taxable fringe benefits are valued at their fair market value (FMV). According to the IRS, FMV is the amount a willing buyer would pay an unrelated willing seller, neither one forced to conduct the transaction and both having reasonable knowledge of the facts. In many cases, the cost and FMV are the same; however, there are many situations in which FMV and cost differ, such as when the employer incurs a cost less than the value to provide the benefit. Reg. §1.61- 21(b) 15. Taxable fringe benefits may be reported to the System Payroll Office using the Taxable Fringe Benefit Form (unless otherwise
  18. 18. instructed by another policy or upon mutual agreement with the System Payroll Office, a different reporting mechanism may be used). Appropriate documentation that supports the taxable value to be included in the employee’s income must accompany the Taxable Fringe Benefit Form. Posting of taxable income and the applicable withholding is dependent upon the timing of receipt of documentation by the System Payroll Office. The System Payroll Office is responsible for ultimately determining the taxable amount. This ensures a consistent valuation of the benefits and compliance with IRS regulations. Departments should contact the System Payroll Office for additional reporting procedures. 16. It is intended that this policy conform to the applicable provisions of Internal Revenue Code Section. Nothing in this policy shall be construed to confer eligibility for benefits for which an employee is not otherwise eligible under federal/state law, policy or practice. The university reserves the right to amend this policy at any time without notice to conform with applicable laws and regulations. BENEFITS: Employees today are not willing to work only for the cash alone, they expect 'extra'. This extra is known as employee benefits. Also known as fringe benefits, Employee benefits are non-financial form of compensation offered in addition to cash salary to enrich workers’ lives. What benefits would you offer to your employees at myWear? Off course, you would offer different benefits to the salespersons and the receptionist. Problem will arise when you begin to decide what benefit to give to whom and on which basis? Employee benefits are not performance-based, they are membership-based. Workers receive benefits regardless of their performances. Employee benefits as a whole have no direct affect on employee performance, however, inadequate benefits do contribute to low satisfaction level and increase absenteeism and turnover in employees (DeCenzo and Robbins; 2007). So you would have to carefully design your benefit package. Your package may include a cell phone to each worker, taking them to a training workshop or seminar, giving them a day or two off
  19. 19. every month and so on. While deciding on the benefits package, do consider the associated costs. Fringe Benefits Summary All eligible full-time employees receive the following fringe benefits: [Note: The narrative following each benefit is intended to provide you with basic information. For complete terms and conditions of each benefit see the Employee Benefits Booklet, published annually by the Office of Human Resources.] Coverage for eligible employees begins the first day of the month coinciding with or following the date of employment. Coverage may terminate on the last day of the month that employment ends. Contact Human Resources for more information. Comprehensive medical insurance – College pays 80% of employee premium. This plan is administered through Blue Cross Blue Shield of Minnesota. If you are an eligible employee and elect medical coverage for yourself, you may also cover your eligible dependents. Eligible dependents include your spouse, domestic partner as defined in the Gustavus Adolphus College domestic partner policy, and children under 26 years of age. Medical plan costs vary with coverage selected (options are Employee, Employee plus Spouse/Partner, Employee plus Dependent Child(ren), and Family). There are two plans from which to choose: a $2,000 deductible Health Reimbursement Account (HRA) plan, and a $5,000 deductible HRA plan. See the Summary Plan Description booklet for a complete description of the benefits, provisions, limitations and exclusions applicable. Dental insurance – College pays 80% of employee premium. This plan is administered through EBSO, Inc. If you are an eligible employee and elect dental coverage for yourself, you may also cover your eligible dependents. Eligible dependents include your spouse, domestic partner as defined in the Gustavus Adolphus College domestic partner policy, and children under 26 years of age. Dental plan costs vary with coverage selected (options are Employee, Employee plus One, and Family). See the Summary Plan Description booklet for a complete description of the benefits, provisions, limitations and exclusions applicable. Term life insurance – policy equal to 1.5 times salary. Provided under a policy purchased by the College through Reliance Standard Life is a benefit we provide all eligible employees at no cost to you. Benefit is 1½ times your annual pay rounded to the next higher multiple of $1,000,
  20. 20. and minimum of $10,000 to a maximum of $550,000 combined Basic Life and Optional Life Benefits (Guarantee issue up to $425,000). In the event that you terminate your employment, you may have the option to convert your basic life insurance to a whole life policy. Eligible employees may also purchase additional life insurance through the plan. If you are an eligible employee and elect Voluntary Life insurance on yourself, you may elect to purchase Voluntary Life insurance for your eligible dependents. This benefit option gives you the ability to purchase additional life insurance coverage at special reduced rates. See the Summary Plan Description booklet for a complete description of the benefits, provisions, limitations and exclusions applicable. Short-term salary continuation (for salaried employees). In the event you are absent from work due to an accident or illness, Gustavus Adolphus College will continue to pay 100% of your regular pre- disability earnings until you are no longer disabled or for a period of up to six months, whichever occurs first (after six months, long-term disability income insurance is in effect – see number 5 below). Employees may be required to furnish a medical certificate indicating that the employee is unable to perform their job duties. Short-term disability (for hourly employees). In the event you are absent from work due to an accident or illness, Gustavus Adolphus College will continue to pay 100% of your regular pre- disability earnings until you are no longer disabled or for a period of up to six months, whichever occurs first (after six months, long-term disability income insurance is in effect – see number 5 below). Benefits are payable after 45 days of continuous disability. Employees may be required to furnish a medical certificate indicating that the employee is sufficiently disabled to prevent the employee from performing their job duties. Long-term disability income insurance. Under a policy purchased by the College through Madison National Life Insurance Company, Inc., covered employees are protected against long- term income loss due to an accident or illness, defined as being 1) unable to perform at least one of the material duties of your job during the first 36 months of benefits (excluding the qualifying period) and, thereafter, unable to perform material duties of any job for which qualified by education, training, or experience or 2) unable to earn more than 80% of pre-disability earnings. Benefits are payable after 180 days of continuous disability. Benefits payable include 66 2/3% of monthly salary to a maximum of
  21. 21. $17,000 per month, offset by full Social Security, Workers’ Compensation and any other Government or Employer Sponsored plans. Benefits may not be payable if disability is due to a Pre-Existing Condition. A tax shelter retirement plan – 7% College The Retirement Plan is a Defined Contribution, Tax-deferred Annuity Plan as allowed under section 403(b) of the Internal Revenue Code. Under this arrangement, the College can enter into salary reduction agreements with its employees in which a portion of the employee’s compensation (selected by the employee and within the limits imposed by the Internal Revenue Code) is applied on a before-tax basis to an annuity contract owned by the employee, rather than being paid directly to the employee. These amounts, together with any investment earnings, are not subject to federal income tax until they are paid to the employee (or beneficiary) in the form of benefits. Participation in this tax-deferred annuity plan is voluntary. When you begin participation in the Plan, the College will automatically make contributions to the fund sponsor. [The fund sponsor is TIAA-CREF, the principal retirement system for the nation’s education community.] Tuition Scholarship Plan for Dependent Children. Dependent children of employees hired after June 1, 2009 will be eligible for the full tuition benefit after four years of the parent’s full-time employment. Benefits begin at the start of the next semester after the anniversary date. The parent’s service qualifying for a tuition benefit at a higher education institution immediately preceding employment at Gustavus will be considered toward meeting this requirement. The tuition scholarship does not cover room and board or any special fees. Employee and Spouse/Domestic Partner Tuition Benefit Plan. The employee and spouse/domestic partner (as defined in the Gustavus Adolphus College domestic partner policy) enrolled in a course(s) on a part- time; space available basis at Gustavus will not be charged for tuition but are subject to pay any and all special fees.
  22. 22. ADVANTAGES OF COMPENSATION & BENEFITS Advantages to Your Boutique: A well designed compensation and benefits plan helps to attract, motivate and retain talent in your firm (which is myWear). A well designed compensation & benefits plan will benefit your boutique in the following ways. 1. Job satisfaction: Your employees would be happy with their jobs and would love to work for you if they get fair rewards in exchange of their services. 2. Motivation: We all have different kinds of needs. Some of us want money so they work for the company which gives them higher pay. Some value achievement more than money, they would associate themselves with firms which offer greater chances of promotion, learning and development. A compensation plan that hits workers’ needs is more likely to motivate them to act in the desired way. 3. Low Absenteeism: Why would anyone want to skip the day and watch not-so-favorite TV program at home, if they enjoy the office environment and are happy with their salaries and get what they need and want? 4. Low Turnover: Would your employees want to work for any other boutique if you offer them fair rewards. Rewards which they thought they deserved? Advantage to Your Employees: 1. Peace of Mind: your offering of several types of insurances to your workers relieves them from certain fears. Your workers as a result now work with relaxed mind. 2. Increases self-confidence: Every human being wants his/her efforts to get acknowledgment. Employees gain more and more confidence in them and in their abilities if they receive just rewards. As a result, their performance level shoot up. Employers have several reasons why they provide fringe benefits even if this means additional expenses. • With extensive health coverage plans, companies can keep their key employees and workers who provide satisfying service. • Usually, most employers enjoy tax breaks especially if they provide group health plans. • Workers will usually prefer better fringe benefits than higher salary,
  23. 23. allowing employers to reduce their expenses. • Several studies suggested that employees who are covered by a good health insurance are less likely to be absent from their work. • When receiving benefits, workers will think that their companies are good employers, boosting their morale and improving their work ethics. • Employers may get personal benefits for less money if they will purchase a group health coverage for their workers. Disadvantages of Giving Fringe Benefits While giving fringe benefits will have significant advantages to employers and workers, these are some of the drawbacks according to an employment attorney: • For small employers, fringe benefits will cost more. Also, they have less choice in drafting their worker’s retirement or health plan because of administrative costs. • The cost of health insurance coverage is steadily rising in the US, making it less affordable to most employers especially in tough economic times. • The more benefits a company will provide, the higher the administrative fees will cost. • Employers may face lawsuit (usually on the basis of discrimination) if they fail to provide fringe benefits to all workers or exclude someone from receiving this. At Wipro, we believe you are entitled to the best of benefits. Flexible Benefits  You will be at liberty to choose your flexible benefits plan, to help you plan your taxes through your salary stack
  24. 24.  Quarterly Performance Linked Compensation is a variable component in your salary stack which would be paid out on a quarterly basis  You are also eligible for interest-free loans and contingency loans under specific case Health The Medical Assistance Program and the Medical Benefit Scheme cover you, your spouse and your children and is a reimbursable amount. You will also be eligible for the Catastrophic Medical Assistance Plan and Mediclaim benefits. Under the Life and Accident cover, you are entitled to the Group Personal Accident Insurance Program, Group Life Insurance Program and Employee Deposit Linked Insurance (EDLI) Program. Work-Life Balance  To give you a perfect balance of work and life, Wipro has initiated elements like paid holidays, maternity benefit with extended leave of absence and sabbaticals  You are also encouraged to be a part of our various Corporate Social Responsibility campaigns under the banner 'Wipro Cares'  'Mitr', Wipro's counseling initiative, helps you cope with crises faced in your personal and professional life  Kids@Wipro provides your children a fun way of learning new things  The 'Fit for Life' initiative gives insights into the right diet, best exercises for the body and soul, and a wide variety of useful tips to keep you fit  Wipro is driving a self–transformation initiative to create an ecologically sustainable organization and the 'Eco Eye' campaign continuously tries to influence all its stakeholders and communities to move towards ecological sustainability. We encourage you to be a part of this green initiative as well The policies mentioned here are policies of the company as of today; this is subject to change in future as policies of the company evolve
  25. 25. from time to time. Disclaimer The policies and benefits mentioned here are policies of the Company as on date; this is subject to change and as per policies of the Company from time to time and geography. Bangalore: Employees are regarded as one of the key factors on which the success of a company lies. And when it comes to India, Indian employees are regarded as most efficient and brainy. To lure and sustain the workforce, many companies offer a wide range of benefits so that they stick to the company. Here are 10 best companies of India in no particular order which provides their employees the best benefits. 10 Companies in India with Best Employee Benefits 10. Make My Trip Make My Trip is one of India’s leading online travel companies. While the company provides various facilities to its customers it also provides its employees with different activities and amenities which create a fun environment for the employees. Fun activities like theme day, rock band, sports activities are held. Corporate social activities are also arranged so that the employees get a chance to engage themselves in social activities
  26. 26. etc. With regular employee medical incentives other facilities like eye check up, general doctor checkup are also provided. 9. Kotak Mahindra Along with the basic employee and medical facilities Kotak Mahindra also provides its employees with some fun activities where they can engage themselves and relax. The activities include mass screenings of latest Bollywood and Hollywood movies, contests and quizzes through the year, Family Days to encourage bonding of office colleagues with immediate family. There are also well stocked in-house library programs on wellness and Health Initiatives including Yoga & Naturopathy by experts and in- house teams of several indoor and outdoor sports and opportunities to participate in all external & internal Corporate Sports Activities. 8. HCL Infosystems Employees at HCL Infosystems are regarded very much important as they consider that key to customer satisfaction lies with employee satisfaction. They have an employee focused program called ‘Employees First’ that gives employees whatever they need to succeed - be it space to grow, time to think or tools to use. It’s about maximizing personal potential rather than scrutinizing professional performance. The 'Employees First' is a five fold path to individual enlightenment. This ensures that people are given Support, Knowledge, Recognition, Empowerment, and Transformation.
  27. 27. 7. Standard Chartered Bank Standard Chartered Banks holds the title of being the first international bank in India to move to the internationally accepted norm of five working days for all employees across the Bank to provide for greater employee work-life balance. SBC also has ‘Colors of Joy’ i.e. a day care centre that was started specially to facilitate women employees. The bank also has “Happy Fridays” where a fun activity between 4:00 pm-6:00 pm is planned on any one Friday in a month. 6. Bharti Airtel Employees at Airtel can opt for flexible work timings, flexibility to work from home, work from a far-off location and even work part time for specified periods of time. Day care as well as grocery shopping centers are also made available for the employees to make their personal life better. Airtel also takes care of the fitness of their employees. The company provides world-class fitness center and spa facility in office. At Airtel, all achievements and launches are celebrated with enthusiasm. Employees can opt for leave of 6 months for personal reasons and leave of up to one year may be applied for, to pursue higher education, maternity leave etc.
  28. 28. 5. Canon Canon employees and their families are encouraged to go for annual company sponsored health check up. Health camps are also organized at office premises at regular intervals. The company also facilitates health and accident insurance for employees that also cover their parents, spouses and children. In case of accident, employees are supported through the Accident Insurance Policy. The frontline sales and service employees are provided with the facility of virtual working wherein they don't need to come to office for reporting or attendance and can directly report in the field. 4. Intel Technology (India) The employee benefits programs at Intel are scheduled to keep employees healthy and productive. Most employees are eligible for two major bonus programs in a year. Intel offers a wide range of comprehensive medical, dental, and vision coverage plans that provide employees with cost-effective and flexible care. All Intel employees receive annual vacation leave. The number of vacation days granted can increase with length of service. To encourage continued education, Intel also provides financial assistance for eligible employees to do job-related degree programs, coursework, certificates. Most of the Intel campuses have on-site facilities that provide recreational opportunities such as basketball, volleyball, fitness centers, exercise classes and other activities.
  29. 29. 3. Wipro A carefree campus, friendly environment and opportunity to groom both professionally and personally are what make it a nice place to work in. To give its employees a perfect balance of work and life, Wipro has programmes like paid holidays, maternity benefit with extended leave of absence and vacation. Employees are also encouraged to be a part of different Corporate Social Responsibility campaigns under the banner 'Wipro Cares'. 'Mitr', Wipro's counseling initiative, help employees to cope with crises faced in their personal and professional life. 2. Hindustan Unilever To empower the employees and to fulfill their personal and professional dreams Hindustan Unilever offers simple, everyday conveniences that make life easier, richer and more joyful. Along with health insurance and hospitalization insurance for employees and their family the company also has recreational facilities like mediation room, yoga classes and a well - stocked library. The company has 41 Aditya Birla Public Schools affiliated to CBSE and central boards which facilitate quality education for children at a very nominal cost. Apart from schooling, Pratibha, the company’s scholarship scheme is open to employees’ children for professional education in India and abroad.
  30. 30. 1. Google India They age not referred as the employees; they are the ‘Google Guys’! The exceptional employee benefits and facilities coupled with high flexibility help employees in striking the right balance between work and life. To attract the right talent, Google has different outreach programs to persuade people from different backgrounds to apply. The Google internship program provide people the experience of working with Google; the ‘Women in Engineering Award’; and the ‘Ambassador Program’ to generate the right brand pull at campuses. Along with the abundant exclusive initiatives that are added from time-to-time to furnish to the employees’ needs at Google, what makes Google a great workplace is their eminence in communication and transparency and nonstop employee development and the culture of innovation.

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