These problems can be avoided if steps are taken: (v) To control benefit costs and evaluation. This benefit is meant for economic welfare of the employees. Fringe benefits are supplementary compensation made in addition to wages, the object being to stimulate the interest of the workers and to make the job more attractive and conducive. which are provided for workers, and subsidized housing and related services.”. Following steps must be taken for effective management of benefits and services: (b) Study of competitor’s schemes and their administration. In each of these three sectors, however, variations were considerable. iii. In this fringe benefit statement, some employers list employer-paid benefits, as well as employee-paid benefits or expenses. Companies are, making sure that their employees are as healthy and supported in their efforts as they could, be. 1945-1950 American business practice. Gratuity is a reward to an employee for his long service with his present employer. Many years ago, benefits and services were labeled “fringe” benefits because they were relatively insignificant or fringe components of compensation.However, the situation now is different, as these have, more or less, become important … Privacy (iv) Recognition that fringe benefits are non-taxable rewards has been a major stimulus to their expansion. In the plantations and mining industries, however, this percentage was 57 and slightly more than 50 respectively. The provision of fringe benefits in Indian industries has not been very remarkable. Under this scheme, if a member of the Employees Provident Fund dies while in service, his dependents will be paid an additional amount equal to the average balancing during the last three years in his account. 6. To satisfy the trade unions by providing benefits and services to employees. It is a benefit which Supplements the employees’ ordinary wages, and which is of value to them and their families in so far as it materially increases their retirement benefit. (e) Lack of training in administration of benefits and services. Retirement plan contributions are an important and popular fringe benefit offered to employees. The latter’s expenditure on canteens, however, was about 0.70 per cent of its total wage bill against that of 0.07 per cent spent by the mining industries. The non-seasonal industrial establishments employing 50 or more workers have to give one month’s notice or one month’s wages to all the workers who are retrenched after one year’s continuous service. Most of the organisations are located very far from towns where housing facilities are not available. However, because of the changing demographics of the workforce-more women working full-time, single-parent families etc. 3. Some employers also offer health savings accounts to their employees, often matching the employees’ contributions to the plan. Retirement benefits, medical care, compensation for injuries and disablement, subsidised food and housing, educational and cultural facilities, payment on life insurance premia, the maintenance of canteens, cafeterias, assistance to co-operative societies these are some of the benefits accounted for 9.40 per cent of the total wage bill in the plantations industry against 3.74 per cent and 4.12 per cent in the mining and manufacturing industries respectively. Definition:-• Fringe benefit may be defined as“Compensation in addition to direct wages or salaries, such as company car, house allowance, medical insurance, paid holidays, pension schemes, subsidized meals. Fringe benefits are on-the-job benefits that come in a form other than money. Managements motivate the employees to work efficiently and contribute their human resources to a maximum extent. This benefit is only non-taxable if the employee moves farther than 50 miles from his current residence. Following are the problems faced in administration of benefits and services: (a) Workers have different interest in benefits and services. Since every organization of a society is not similar to others, each organization adopts its own approach in providing the benefits to employees. Social security is a security that society furnishes through appropriate organisation against certain risks to which its members are exposed. The answer of this question involves the analysis in a much wider context than merely the organizational context; it has to be analyzed both in social as well as organizational contexts. 5. If one union succeeds in getting one benefit, the other union persuades management to provide a new model fringe. They may also provide services or facilities that many employees find valuable, such as child care services or a gym or health club. Because of this nature of fringe benefits, different countries include different items in these. With the introduction of these benefits and services in one company, other concerns vie with one another to introduce them as well. The relationship between a company’s benefits-and-services programmes and employee motivation for increased production is somewhat weak. (vii) On-the-job rewards include increased responsibility, job rotation, training etc. They increase the real income of the workers in the organisation. Fringe benefits, sometimes called “perks,” are offered by some employers to … However, the situation now is different, as these have, more or less, become important part of a comprehensive compensation package offered by employers to employees. there is now a greater variety of employee needs which calls for decentralised benefits package emphasizing choice to employees. In India, the Factories Act, 1948, stipulated certain requirements regarding working conditions with a view to provide safe working environment. The intangible benefits are, arguably more important because they help employees feel empowered and motivated to. First, every individual is expected to be at least partially responsible for his own present and future well-being. For example, Constitution of India provides in its Article 43 that “all workers should be given living wage, conditions of work ensuring decent standard of life and fuller enjoyment to social and cultural opportunities.” Various benefits and services provided to the employees serve this purpose. However, during more recent years, the value of these benefits is adjusted in the income tax payable by individual employees, but many of these still do not come into the ambit of income tax deductions. To quote Belcher, these benefits are “any wage cost not directly connected with employee’s productive effort, performance, service or sacrifice”. They are extended to the employees in addition to their wages and salaries. which usually add up to something more than a “fringe,” and is sometimes applied to a practice that may constitute a dubious benefit for workers.”. The objective of setting-up of these societies is to encourage thrift and provide loan facilities at reasonable terms and conditions, primarily to employees. This scheme allows the employees to purchase the shares of the company at a fixed and reduced price. Such additions to the wage proper are sometimes referred to as fringe benefits. v. Varsity Brands, Inc. Benefits given to an employee in addition to his wages or salary. In case of lay-off, employees are entitled to lay-off compensation at the rate to 50% of the total of the basic wage and dearness allowance for the period of their lay-off except for weekly holidays. These benefits are related to the social security of employees because the economic and saving conditions of the employees are very poor due to the low wages and high living cost. These fringe benefits, often in the form of employer-paid life and health insurance policies, retirement benefits, and other things that might aid in the recruitment of top quality, skilled workers. The word ‘Benefit’ applies to those items for which a direct monetary value to the employee can be easily ascertained, as in the case of holiday pay, pension, medical insurance or separation pay. (iii) These rewards may result in unhealthy competition among employees. This is because Michael moved further than the IRS’ required distance of 50 miles. Report a Violation 11. Fringe benefits are supplementary compensation made in addition to wages, the object being to stimulate the interest of the workers and to make the job more attractive and conducive. The rate of contribution is the 12% of the Basic Pay and Dearness Allowance in case of contribution to provident fund scheme and only 12% of the Basic Pay in case of provident fund scheme where the contribution from the employer side is not applicable.
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