2.
The remuneration that the employees receive for
their contribution cannot be measured.
“Fringe benefits” refers to the extra benefits
provided to employees in addition to the normal
compensation paid in the form of wage or salary.
It is the compensation made to an employee
beyond the regular benefit and is different from
incentives.
INTRODUCTION
3. Are supplementary forms of compensation
They are indirect compensation because they are
usually extended as a condition of employment and
is not directly related to performance
They are paid to all employees
They help to increase the living conditions of
employees
Can be statutory (PF) or voluntary (transport)
These are provided by employers.
Features/characteristics
4.
Employee demands:
Rather than pay hike due to reduction in tax
burden and increasing cost of living.
Trade unions demand:
Compete for their members. If one union
succeeds, the other union persuades the management to
provide new. Thus the competition results in more and
varied benefits.
Need for fringe
5.
Employers preference:
To motivate employees to give their best to the
organisation.
As a social security:
Members are exposed to risks like
contingencies of life i.e. accidents and occupational
diseases. Therefore, employer has to provide benefits
like safety measures, medical facilities etc.
To improve human relations:
Employees are satisfied economically, socially
and psychologically. Includes canteen, recreational
facilities, consumer stores.
6.
To create and improve sound industrial relations
To motivate employees
To provide social security
To promote employees welfare
To create a sense of belongingness among
employees that retains them.
To protect the health of employees and provide
safety against accidents.
objectives
7. Fringe benefits by organisations in India is classified into
5:
Payment for time not worked
Employee security
Safety and health
Welfare recreational facilities
Old age and retirement benefits
Types of fringe benefits
8.
Hours of work:
The Factories Act 1948, Sec 51 specifies that no
worker shall work for more than 48 hours in a week.
Sec 54 restricts the working hours to 9hrs on any day.
Paid holidays :
An adult worker shall have weekly paid
holidays. If he is deprived, he is eligible for
compensatory holidays in the same month.
Payment for time not worked
9.
Shift premium:
Companies with shifts, pay a premium for those
who work during odd hours shift.
Holiday pay:
Offer double the normal rate of salary for the
work done on holidays.
Paid vacation:
Vacation with pay / salary.
10.
Physical and job security to employees are
provided to ensure security to the employee and his
family. A minimum and continuous wage or salary
gives a security to his life.
The Payment of Wages Act 1936, The Minimum
Wages Act 1948 etc provides income security.
Retrenchment compensation
Lay off compensation
Employee security
11. Safetymeasures
Employees safety and health needs to be given
importance
The Factories Act, 1948 focuses on provisions
related to better working conditions - cleanliness,
disposal of wastes, ventilation, drinking water,
latrine, lighting etc.
Provisions related to safety measures including
fencing of machinery, revolving machinery,
precaution against dangerous fumes, etc.
Safety and health
12.
Workmen’s compensation
The Workmen’s Compensation Act 1923 focuses
on the provision for payment of compensation.
It intends to meet the contingency of death or
disability of a worker due to an employment injury
or an occupational disease specified under the act.
Applicable only if caused during employment
Compensation on death min Rs.60000-
Rs.2.28lakhs
On permanent disability Rs.50000- Rs.2.75 lakhs
Applicable for employees in railways, mines etc.
13.
Healthbenefits
Medical services are provided by the
organisations to both employees and their families.
The Employees State Insurance Act 1948 deals
with the health benefits to be provided. It includes :
Sickness benefits
Maternity benefits (12 weeks)
Disablement benefit
Dependant’s benefit
Medical benefit
14. Canteens
Consumer stores
Credit societies- financial assistance - instead of
depending on money lenders
Housing facilities
Legal assistance/aid
Employee counselling through professional
counsellors- reduces absenteeism , turnover etc.
Transportation
Welfare and recreational facilities
15.
Welfare organisations/ departments and officers
Holiday homes at hill stations, health resorts and
other centres with low charges of accommodation
Educational facilities
Parties and picnics- inculcating sense of association,
belongingness, openness and freedom among
employees
Others – Christmas gifts, organising games, leave
travel concession annual awards, setting up of clubs.
16. Employers provide some benefits to the
employees after retirement, with a view to create a
feeling of security about their old age. These are
termed as the old age and retirement benefits. It
includes:
Provident fund – The Employee Provident Fund
Act, 1952. – 50% of salary as pension after 33 yr
service – Employees contribution 8.33% of salary +
food and maintenance allowance :: Government
10%
Old age & retirement benefits
17. Pension
Deposit linked insurance – introduced in 1976
under the P.F. Act, 1952. – under the scheme, if a
member of EPF dies while in service, his
dependents will be paid an additional amount equal
to the average balance during the last three years in
his account.
Gratuity
Medical benefit
18.
Fringe benefits are thus a means to ensure,
maintain and increase the welfare of employees.
Employees who get fringe benefits are stimulated to
give their best and to develop a sense of
belongingness to the organisation.
Thus the extra benefits provided to employees in
addition to the normal compensation paid in the form
of wage or salary is termed as fringe benefits.
conclusion
