Employee welfare

EMPLOYEE
WELFARE
TheYoungIndianEconomiTheYoungIndianEconomi
stssts

NEED FOR SOCIAL SECURITY
• Social Security protects the subscriber and his/her entire family by giving
beneficial packages in financial security and health care.
• It facilitates people to plan their future through insurance and assistance.
• Schemes are designed to guarantee at least long-term sustenance to
families when the earning member retires, dies or suffers a disability.
• Poverty in India points towards the need to adopt a wider concept of social
security that would include both promotional and protectivesocial security
• Affects labour productivity and thus has implications that extend far beyond the
workers and their families themselves
• With India's traditional means of support (the extended family), gradually
breaking down a huge, impoverished and aging segment of the population is
becoming an enormous drain on the country's resources.
TheYoungIndianEconomists.wordpress.TheYoungIndianEconomists.wordpress.
comcom

• As people grow older the expenditure on their health also increases.
• While social security systems are meant to take care of the
redundant/unemployed or the unemployable, self-accumulated retirement
savings are the only saviour for citizens of countries where formal social
security systems don’t exist
• Prevention against increases in deprivation and the promotion of better
chances of individual development.
• Provides financial relief at the time of distress.
• People all over the world are living longer, having fewer children, and
expecting higher standards of living in their retirement years.
• The most important feature shared by all these workers is the absence of any
sort of protection: whether it be employment security, pension, or coverage
for risks such as ill health, accidents, death.
TheYoungIndianEconomists.wordpresTheYoungIndianEconomists.wordpres
s.coms.com

WORKFORCE IN INDIA
 The dimensions and complexities of the problem in India can be
better appreciated by taking into consideration the extent of the
labour force in the organized and unorganized sectors.
 While as per the 1991 census, the total workforce was about
314 million and the organized sector accounted for only 27
million out of this workforce.
 The NSSO’s survey of 1999-2000 has estimated that the
workforce had increased to about 397 million out of which only
28 million were in the organized sector.
 There has been a growth of only about one million in the
organized sector in comparison the growth of about 55 million in
the unorganized sector.
TheYoungIndianEconomists.wordpressTheYoungIndianEconomists.wordpress
.com.com

Organized sector
The organized sector includes primarily those establishments
which are covered by the Factories Act, 1948, the Shops and
Commercial Establishments Acts of State Governments, the
Industrial Employment Standing Orders Act, 1946 etc. This
sector already has a structure through which social security
benefits are extended to workers covered under these
legislations.
The organized sector is characterized by:
• Fixed working hours
• Job security
• Paid leaves and various other benefits
TheYoungIndianEconomists.wordpress.comTheYoungIndianEconomists.wordpress.com

Unorganized sector
The unorganized sector is characterized by:
1.The lack of labour law coverage
2.Seasonal and temporary nature of occupations
3.High labour mobility
4.Dispersed functioning of operations
5.Lack of organizational
6.Irregular work
7.Job security
8.No benefits
Support all of which make it vulnerable to socio-economic hardships.
In rural areas- Landless agricultural laborers', farmers, persons engaged
in animal husbandry, fishing, horticulture, bee-keeping, rural artisans, etc.
In urban areas- Manual laborers' in construction, carpentry, trade,
transport, communication, street vendors, hawkers, head load workers,
garment makers, etc.

SYNOPSIS OF SOCIAL SECURITY
LAWS
The principal social security laws enacted in India:
• The Employees’ State Insurance Act, 1948 (ESI Act)
• The Employees’ Provident Funds & Miscellaneous Provisions Act,
1952 (EPF & MP Act)
• The Workmen’s Compensation Act, 1923 (WC Act),
• The Payment of Gratuity Act, 1972 (P.G. Act),
• The Maternity benefit Act,1961.

The Employees’ State Insurance
Act, 1948 (ESI Act)
• The promulgation of Employees’ State Insurance Act, 1948
envisaged an integrated need based social insurance scheme.
• It protects the interest of workers in contingencies such as
sickness, maternity, temporary or permanent physical
disablement, death due to employment injury resulting in loss
of wages or earning capacity.
• The Act also guarantees reasonably good medical care to
workers and their immediate dependants. Following the
promulgation of the ESI Act the Central Government set up
the ESI Corporation to administer the Scheme. The Scheme,
thereafter was first implemented at Kanpur and Delhi on 24th
February 1952. TheYoungIndianEconomists.wordpress.comTheYoungIndianEconomists.wordpress.com

Benefits
The section 46 of the Act envisages following social security
benefits:
• Medical benefit
• Sickness benefit (SB)
(a) Extended Sickness Benefit
(b) Enhanced Sickness Benefit
• Maternity Benefit (MB)
• Disablement Benefit
(a) Temporary disablement benefit (TDB)
(b) Permanent disablement benefit (PDB)

The Employees’ Provident Funds & Miscellaneous
Provisions Act, 1952 (EPF & MP Act)
The EPF & MP Act, 1952 was enacted by Parliament and came into force with
effect from 14th March,1952. A series of legislative interventions were made
in this direction, including the Employees' Provident Funds & Miscellaneous
Provisions Act, 1952.
Presently, the following schemes are in operation under the Act:
I. Employees' Provident Fund Scheme, 1952
II. Employees' Pension Scheme, 1995 (replacing the Employees' Family
III. Employees' Deposit Linked Insurance Scheme, 1976

Employees' Provident Fund Scheme, 1952
The Employees' Provident Fund Organization, India, is one of the largest
provident fund institutions in the world in terms of members and volume of
financial transactions that it has been carrying on. It applies to specific
scheduled factories and establishments employing 20 or more employees and
ensures terminal benefits to provident fund, superannuation pension, and
family pension in case of death during service.
Needs:
i. Retirement
ii. Medical Care
iii. Housing
iv. Family obligation
v. Education of Children
vi. Financing of Insurance Polices

Provident fund
1. A part of your salary is deducted every month and deposited on
your behalf.
2. If you work in a private firm then the company pays the same
amount as it is deducted from your account and when you leave
the firm you can apply and withdraw the amount saved.
3. It's actually your personal saving of your earnings.
4. If you are in government service then you will get the lump sum
when you retire.
5. Compulsory contributory fund for the future of an employee
after his retirement or for his dependents in case of his early
death.
6. It extends to the whole of India except the State of Jammu and
Kashmir TheYoungIndianEconomists.wordpress.comTheYoungIndianEconomists.wordpress.com

Employees' Provident Funds & Miscellaneous Provisions Act, 1952
Objectives:
• Promoting and securing the well being of the employees by way of provident
fund, family pension and insurance to them.
• Inculcating a habit of saving amongst workers.
• Providing a steady workforce to the employers and
• Assisting the government by providing funds of considerable magnitude for
utilization on various projects meant for promoting economic and social
development of the country and the well being of its people.
Applicability:
• Every establishment which is a factory
• Engaged in any industry mentioned in schedule I of the Act and
• Employing 20 or more persons or
• Any other establishment employing twenty or more persons or
• Such other establishment as the central Government may notify.

BENEFITS
A member of the provident fund can withdraw full amount at the credit in the
fund on retirement from service after attaining the age of 55 year.
Full amount in provident fund can also be withdraw by the member under the
following circumstance:
• A member who has not attained the age of 55 year at the time of termination of
service.
• A member is retired on account of permanent and total disablement due to
bodily or mental infirmity.
• On migration from India for permanent settlement abroad or for taking
employment abroad.
• A member can withdraw up to 90% of the amount of provident fund at credit
after attaining the age of 54 years or within one year before actual retirement.
Claim application in form 19 may be submitted to the concerned Provident Fund
Office.
• Amount of Provident Fund at the credit of the deceased member is payable to
nominees/ legal heirs. Claim application in form 20 may be submitted to the
concerned Provident Fund Office.

• SCHEMES
− Employees Provident Funds Scheme,1952 – sec 5
− Employees Pension Scheme,1995 – sec 6A
− Employees Deposit-Linked Insurance Scheme,1976 – sec 6C
• REGULATORY MECHANISM
− Central Board - section 5A
− Executive Committee – section 5AA
− State Board - section 5B
− Central Government
 Contribution of Employee12% of the Pay, where “Pay” includes basic wages with
dearness allowance, retaining allowance.
VOLUNTARY CONTRIBUTION: -
1. Minimum PF Contribution is12%
2. Maximum PF Contribution is100% of the Pay.
3. Tax Benefits to the contribution are applicable as per Income Tax Rules.

PENSIONPENSION
• A pension is a steady income given to a person (usually after retirement). Pensions are
typically payments made in the form of a guaranteed annuity to a retired or disabled
employee.
• Occupational pensions are a form of deferred compensation, usually advantageous to
employee and employer for tax reasons.
• Many pensions also contain an insurance aspect, since they often will pay benefits to
survivors or disabled beneficiaries, while annuity income insures against the risk of
longevity.
PENSION FUNDPENSION FUND
• A Pension fund is a pool of assets forming an independent legal entity that are bought
with the contributions to a pension plan for the exclusive purpose of financing pension
plan benefits.
EMPLOYEE PROVIDENT FUNDEMPLOYEE PROVIDENT FUND
• Employees Provident Funds Scheme, 1952.
• Employees Deposit-Linked Insurance Scheme, 1976 .
• Employees Pension Scheme 1995 (Earlier the Employees Family Pension Scheme, 1971) .

EMPLOYEES PENSION SCHEME, 1995 (EARLIER THE EMPLOYEESEMPLOYEES PENSION SCHEME, 1995 (EARLIER THE EMPLOYEES
FAMILY PENSION SCHEME 1971)FAMILY PENSION SCHEME 1971)
1. Employee is not required to contribute separately under the Employees Pension
Scheme 1995.
2. Employer share of Provident Fund Contribution at 8.33% is diverted to Pension Fund
TYPE OF PENSION:TYPE OF PENSION:
• Monthly Member’s Pension: On attaining the age of 58 years.
• Invalidity pension: Permanent and total disablement during the course of employment.
• Widow pension: Death of member whether in service or after exit from employment or
after retirement/ commencement of monthly member pension. Pension for life or until
remarriage
• Children pension: Payable to two children of deceased member up to the age of 25 years
in addition to widow.
• Orphan pension: Two orphan children up to the age of 25 years.

REASONS FOR A NEW PENSION SCHEMEREASONS FOR A NEW PENSION SCHEME
• Close to 65% of population still live in rural areas are not
covered.
• Of the salaried 20% are govt employees-have a defined,
indexed, pension entirely funded by the govt.
• About 49% of non-govt employees only covered by EPF & EPS.
• Less than 10% are eligible for the formal pension fund scheme
estimated working population.
• Serious majority of workers who are not below the poverty line
might go below it after their as they have not accumulated
enough savings for future.

EMPLOYEES DEPOSIT- LINK INSURANCE SCHEME 1976EMPLOYEES DEPOSIT- LINK INSURANCE SCHEME 1976
• Provides for payment of assurance benefit, upon death of
the member while in service
• Linked to the average balance in the provident fund
account of the deceased member
• The assurance benefit shall be payable to the person
entitled to receive provident fund accumulation of the
deceased member
• The membership extends to all members of provident
fund
• Employees not required to contribute
• Employers are required to contribute 0.50% of
pensionable salary TheYoungIndianEconomists.wordpress.comTheYoungIndianEconomists.wordpress.com

The Workmen's Compensation Act, 1923
It aims at providing financial protection to workmen and their dependants in case
of accidental injury by means of payment of compensation by the employers.
WHO IS A WORKMAN?
Workman means any person (other than a person whose employment is of a casual
nature and who is employed otherwise than for the purposes of the employer’s
trade or business) who is:
 a railway servant as defined in section 3 of the Indian Railways Act, 1890 not
permanently employed in any administrative, district or sub-divisional office of a
railway and not employed in any such capacity as is specified in Schedule II, or
 employed in any such capacity as is specified in Schedule II,
 provisions of the Act have been extended to cooks employed in hotels, restaurants
using power, liquefied petroleum gas or any other mechanical device in the process
of cooking.
Compensation
In case of death the minimum amount of compensation fixed is Rs,. 80,000 and Rs.
90,000 in case of permanent total disablement. The maximum amount of
compensation payable is Rs. 4.56 lakh in the case of death and Rs. 5.48 lakh in the
case of permanent total disablement.

EMPLOYER’S LIABILITY FOR COMPENSATION
(ACCIDENTS)
The employer of any establishment covered under this Act, is required to
compensate an employee
Employees Who has suffered an accident arising out of and in the course of his employment,
resulting into:
1. Death
2. permanent total disablement
3. permanent partial disablement
4. temporary disablement whether total or partial
5. occupational disease.
Any injury not resulting in death, caused by an accident which is attributable to :
a) the workmen having been at the time thereof under the influence or drugs, or
b) the willful removal or disregard by the workmen of any safeguards.
c) when the employee has contacted a disease which is not directly attributable to a
specific injury caused by the accident or to the occupation.

The Factories Act, 1948
The Factories Act, is a social legislation which has been enacted
for occupational safety, health and welfare of workers at
workplaces.
Factories covered under the Factories Act:
1. The industries in which 10 or more than 10 workers are
employed on any day of the preceding 12 months and are
engaged in manufacturing process being carried out with the
aid of power
2. The industries in which 20 or more than 20 workers are
employed in manufacturing process being carried out without
the aid of power.

Welfare Measures
• This act is a complete document on hours of work, holidays, special
provisions on accidents and diseases.
• Washing, disposal of wastage, ventilation, spacing between workers, urinals,
drainage, drinking water facilities
• Facilities for storing and drying clothing
• First – aid appliances
• Facilities for sitting, canteens, Shelters, rest rooms and lunch rooms
• Crèches
• Welfare officers if working more then 500 or more workers.
• Child labour should be avoided.
• Male and Female children must be housed in different sleeping quarters.
• Children may not sleep more than two per bed.

Payment of Gratuity
• This act includes all factories and establishments that employ 10 or more
employees.
• Gratuity shall be payable to an employee on the termination of his employment
after he has rendered continuous service for not less than five years –
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or
disease.
• The total gratuity payable should not me more than 20 months wages.
1. It provides 15 days wages for each year of service to employees who have
worked for five years or more in factories, establishments having a minimum of
10 workers.
2. The maximum amount of gratuity payable is Rs. 3,50,000/-

Maternity Benefit Act
• To regulate the employment of women in certain establishments for certain
periods before and after childbirth and to provide for maternity benefits and
certain other Benefits
• This act applies to all women not covered by ESI Act and who have completed
160 days of service in last 12 months
• It allows for 6 weeks leave before and after the delivery during which she is
paid the average daily wage.
• Every woman shall be entitled to, and her employer shall be liable for, the
payment of maternity benefit, which is the amount payable to her at the rate
of the average daily wage for not less than 12 weeks i.e. preceding and
following the day of her delivery does not exceed 12 weeks.
• A women shall be entitled to maternity benefit only if she has actually worked
in an establishment of the employer for a period of not less then eighty days in
the twelve months immediately proceeding the date of her expected delivery
(section-5[2]).

Health and Safety at Work Act 1974
 Before 1974 approximately 8 million employees had no legal
safety protection at work.
 HASAWA 74 provides the legal framework to promote,
stimulate and encourage high standards of health and safety in
places of work.
 It protects employees and the public form work activities.
 Everyone has a duty to comply with the Act, including
employers, employees, trainees, self-employed, manufacturers,
suppliers, designers, importers of work equipment.
 Secures Health Safety and Welfare
 Protects other people against risks from the activity of other people at
work.
 Controlling dangerous substances
 Controlling emissions

Industrial Disputes Act
• An Act to make provision for the investigation and settlement of industrial disputes, and
for certain other purposes.
(a) Collective agreement-
(i) any employer or employers, and
(ii) any workmen or any trade union or trade unions consisting
of workmen, and
(b) which relates to the terms and conditions of employment of any workman, or to the
privileges, rights or duties of any employer or employers or any workmen or any trade
union or trade unions consisting of workmen, or to the manner of settlement of any
industrial dispute.
• The President may from time to time appoint a panel, of not less than five persons, from
which industrial courts shall be constituted as herein after provided.
• An industrial court consists of three persons, a member of the court nominated by the
Minister shall be the president of the court.

Thank You
Presented by,Presented by,
TheYoungIndianEconomistsTheYoungIndianEconomists

Employee welfare

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (18)

Similar to Employee welfare

Similar to Employee welfare (20)

More from The Young Indian Economists

More from The Young Indian Economists (16)

Recently uploaded

Recently uploaded (20)

Employee welfare