When looking for a new job, you’d think the most compelling component of a new position would be a greater salary, but research indicates that this isn’t always the case. According to a Glassdoor survey, four out of five employees prefer new or enhanced benefits over a salary raise.
Employee benefits are any compensation provided to employees in addition to their regular income or wages. Insurance coverage for Health, retirement benefits, and paid time off are examples of such benefits.
Employee benefits exist in various forms and are an important component of the entire compensation package provided to employees, especially for small and medium business owners who cannot always afford to offer higher-paying salaries.
This post will discuss common examples of small business employee perks that you should include in your employee benefits package to attract new talent and keep current employees.
Types of Employee Benefits In India
If this is your first time offering employee benefits, you must provide the perks that your employees prefer. While ping pong tables and bean bag chairs are entertaining, they may not be the most important things to your employees.
In India, the primary legislation governing employee benefits includes:
Employees’ State Insurance Act, 1948: Benefits are available to businesses with ten or more employees (subject to any state restrictions) and to all employees generating below INR 21,000 (USD 286) per month.
Employees’ Provident Fund (P.F.) and Miscellaneous Provisions Act, 1952: advantages extend to businesses with 20 or more workers earning less than INR 15,000 per month (USD 204) must contribute to programmes under this Act, while those earning more may opt-out under specific conditions In light of the COVID-19 issue, the Government of India temporarily cut the contribution rate from 12% to 10% for May, June, and July 2020 (for both employers and employees) to lessen the employer’s financial burden, also increasing employees’ take-home pay.
The Payment of Gratuity Act, 1972: This Act provisions for the payment of gratuity to all employees (workmen and non-workmen alike) employed in establishments (factories, shops, and other commercial enterprises) with ten or more employees if they have rendered continuous service for not less than five years (besides in the event of death or disability) under superannuation, retirement, or resignation.
Insurance and Healthcare
The major legislation relevant to the private sector contemplates medical benefits for employees in scenarios such as illness, maternity, disablement, and death due to workplace damage and medical treatment for covered persons and their families. Employers are also compelled to provide compensation in cases of employee death or disability due to workplace injuries.
The government has announced an ambitious universal health scheme to ensure that poor and vulnerable populations receive health insurance coverage for secondary and tertiary hospitalisation of up to INR 5 lakh (USD 6818) per household each year. Furthermore, most large private-sector businesses provide medical insurance coverage to their employees and their immediate dependents and shoulder the costs in this regard.
Annual Leave and Holidays
There are several national holidays observed in India, including Republic Day (January 26th), Independence Day (August 15th), and Mahatma Gandhi’s birth anniversary (October 2nd). In addition to these, every employee would be entitled to additional holidays as proclaimed by the respective state governments. If an employee is compelled to work on any of these holidays, they are allowed double pay and a compensatory day off. Besides, establishments must be closed every week on at least one day (typically Sunday).
Still, in certain States’ S&E Acts (for example, Maharashtra, Karnataka, and Tamil Nadu), some establishments may continue to operate on all days of the week. Subject to permitting every employee a weekly holiday of at least 24 consecutive hours (and other conditions being satisfied).
Leave of Absence for Maternity and Paternity
In terms of maternity leave, female employees who have been with the company for at least 80 days are eligible for 26 weeks of paid maternity leave. In addition, in the event of a miscarriage or medical termination of pregnancy, female employees are entitled to 6 weeks of paid leave beginning on the day of the miscarriage or medical termination of pregnancy. There are also leave requirements for women who have had tubectomy operations and any illness related to pregnancy, premature birth, delivery, miscarriage, or medical termination of pregnancy.
There is no special category of paternity leave recognised under Indian law, yet a bill has been presented in this regard requesting 15 days of paternity leave across all sectors. However, certain corporate and public sector departments currently grant paternity leave to their employees, as specified in the relevant leave policy/rules.
Disease and Disabilities Leave
Sick leave, in most cases, cannot be carried forward or encashed, and it is not subject to any minimum service requirements. However, employees in certain states (Gujarat, Andhra Pradesh, and Telangana) may cash in sick leave at discharge from employment. In India, no specific type of disability leave is recognised.
Other Mandatory or Typically Provided Leave(s)
Employees can take advantage of casual leave in unexpected situations, subject to an organisation’s consent. However, this type of leave is also rarely carried forward or encashed.
Pensions: Mandatory and Generally Given
Under the Employees Provident Fund (P.F.) and Miscellaneous Provisions Act, 1952, covered employees would be eligible for a monthly pension under the Pension Scheme’s guidelines. Aside from that, personnel in the public sector are entitled to the pension(s) specified in their service regulations.
Other Benefits that are Required Or Typically Provided
In addition to the preceding, some firms offer additional incentives to employees (some of which are tax-deductible), such as meal vouchers, a transportation allowance, and reimbursement for mobile phone and Internet charges. In addition, specific benefit packages and labour welfare funds are also mandated for specific industries.
Which Employee Benefits Should you Offer?
Many small firms are discovering that consumer-oriented benefits are equally valuable to employees, are more flexible, and are more affordable. So you’ll be well on your way to recruiting and retaining your finest employees if you supplement your employee benefits package with the popular benefits described in this article.