Benefits & services

(fringe benefits)
Dr.Devendra Kumar
(MHA – III Sem. )
Acharya college of hospital
administration Bangalore-32

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Contact : dev_ten07@yahoo.co.in
CONTENTS
• Introduction.
• Fringe Benefits.
• Definitions.
• Salient Features of fringe benefits.
• Objectives of fringe benefits.
• Kinds of fringe benefits.

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CONTENTS
• Fringe benefits in India.
• Fringe benefits and Tax.
• Employee advantages.
• Employee disadvantages.
• Employer advantages.

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Introduction
• Management concerned with attending
employees, whose performance meets at
least minimum levels of acceptability ,and
at keeping absenteeism,and turnover to
tolerable levels. The provision of benefits
and services can be and important in
maintaining the employees and reducing
or keeping turnover and absenteeism
low.

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Fringe Benefits

• Fringe benefits is a benefits which

supplements thee employees ordinary
wages and which is of value to them and
their families in so for as it materially
increases their retirement benefits.

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Definitions

• According to the Glossary of current industrial

relations and wage term:- fringe benefits are
supplements to wages received by workers at a
cost to the employers, the term encompasses a
number of benefits paid vacation, pension,
health insurance plans etc. which usually add
up to something more than a fringe and is
sometimes applied to a practice that may
constitute a dubious benefits for workers.
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Definitions
According to D.Belcher:- Fringe benefits are any
wages cost not directly connected with the
employees productive effort, performance, service
or sacrifice.
According to The Employers federation of India:-
Fringe benefits includes payment for non-working
time, profits and bonus, legally sanctioned payment on
social schemes, workmen's compensation, welfare
cess and the contributions made by employers under
the such voluntary schemes as cater for the post
retirement medical, education, cultural and
recreational needs of workmen.The term also includes
the monetary equivalent of free lighting, water, fuel etc
which are provided by for workers, and subsidized
housing and related services. 04/20/09
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 Salient features of fringe benefits

• These are supplementary to regular wages or salary.

• These are paid to all employees based on their
membership in the organization.
• These are indirect compensation because these are not
directly related employees performance.
• F.B. involve a labour cost for the employer and not meant
directly to improve efficiency. 04/20/09
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 Salient features of fringe benefits

• These raise the living standard of the employees.

• Fringe benefits refers to items for which a direct
monetary value to the employee can be
ascertained eg.Provided fund, Pension etc, on the
other hand services refers to the items like medical
facilities, recreation etc.
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• These benefits are may
10 be statutory or voluntary. 9
Objectives of fringe benefits
• To recruit and retain the best employees.
• To protect employee against the certain hazards
eg. Life Insurance, Old age pension etc.
• To improve motivation and morale of the
employees by satisfying some unsatisfying
needs.
• To improve work environment and industrial
relations.
• to ensure Health, Safety and Welfare of the
employees.
• To develop the sense of the belongingness and
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loyalty among the workers.
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Objectives of fringe benefits

• To meet statutory requirements.

• To satisfy the demand of the trade unions
• To improve the public image of the
organization.

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Kinds of fringe benefits
• George R. Terry has enumerated as many 28
benefits under the fringe benefits. A few of them
are – bonus for the quality work, Contribution to
group insurance plan, travel expenses suggestion
awards, medical leave with pay, overtime,
university and trade course.

• The Chamber of Commerce, USA has included 5

types of fringe benefits as-
1 Statutory payments such as old age pension,
unemployment insurance, group insurance.
2 Payment for pension and labour welfare.
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Continued….

3 Rest or leave with pay.

4 payment for time not worked.
5 Other benefits such as profit sharing , suggestions
reward, reimbursement of tuition fees, festival
allowance etc.

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Fringe benefits in India
A. Payment for time not worked.
B. Employee security.
C. Safety and health.
D. Workmen’s Compensation.
E. Health Benefits.
F. Voluntary arrangements.
G. welfare and Recreational facilities.
H. Old age and retirement benefits.

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A Payment for time not worked.
Paid holidays Shift premium Holiday pay Paid vacation

*According *Companie *Generally *Workers in

to s operating organizatio manufacturing,
factories 2nd,3rd ,pay n offer plantations, and
Act, 1948, a premium double the mining who had
an adult to the normal rate worked for 240
days during the
worker workers the salary
calender year
shell have who are to those are eligible for
weekly required to workers paid vacation@
paid work who work 1 day for every
holiday, during the during 20 days for
Preferably odd hour’s. holidays. adult.
Sunday.
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B. Employee security

The minimum and continuous wage or salary

gives a sense of security to the employees.
The payment of Wage of Act 1936,The
Minimum Wages Act 1948, the payment of
Bonus Act 1965, provide income security to
the employees. In addition to this the
industrial Dispute Act 1947, provides for the
payment of compensation in case of lay off
and retrenchment
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C. Safety and Health.
• Employees ‘ safety and health should be
taken care of order to protect the
employees against accidents, unhealthy
working conditions and to protect the
workers productive capacity. In India The
Factories Act, 1948, stipulate certain
conditions and requirements regarding
working conditions with a view to safe
working environment.

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D. Workmen’s Compensation

• Workmen’s Compensation Act 1923,

intended to meet the contingency of
invaliding and death of a worker due to
an employment injury or an occupational
disease specified under the Act as the
sole responsibility of the employer.

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E. Health Benefits (Employee State Insurance Act 1948)

Sickness Maternity Disability Dependents Medical

benefits benefits benefits benefits benefits

The The benefit Cash In case of • Out pt.

is payable in payment , death, as services
benefit is cash to an free medical
payable insured treatment.
a result of •Specialist
services of all
for a women for Temporary employme branch
maximum confinement disablement nt injury •Investigations
/ miscarriage benefits is dependent •Immunization
period of or sickness about 72 of person are
91 days arising out of his % •Family planning
eligible for services
in any pregnancy wages. For
with full pay permanent pension. •Supply of drug
continuou leave up to disability 72 Up to the dressings
s period as 12 wk, 6 % of his 18 year of •Ambulance
of wk, 30 days. wage age emergency
services04/20/09
365days. 10 19
•In pt.treatment.
F. Voluntary Arrangements.

• Most of the large

Organizations provide
services over and above the
legal requirements to their
employees free of cost by
setting up hospitals, clinic’s,
dispensaries,………

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G.Welfare and Recreational Facilities.

• Welfare and recreational benefits includes

Canteens, Consumes Societies, Credit Societies,
Housing, Legal Aid, Employee Counseling, Welfare
Organizations, Holiday Homes, Educational
Facilities, Transportation, Parties & picnic’s,
Miscellaneous.

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H. Old Age and Retirement Benefits.

• Employees provided some benefits to the

employees, after and during old age, with
a view to create a feeling of security
about the old age. These benefits are
called old age and retirement benefits
include Provided fund, Pension, Deposit
linked scheme, Gratuity and Medical
benefits.

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H. Old Age and Retirement Benefits
• The employee Provided Fund Act provides for the
institution of Provided fund for employees in
factories and establishments.
• Employees Pension Fund Act provides pension and
life insurance benefits to the employees of various
establishments. The payment of Gratuity Act, 1972
and Deposit Licked Insurance Scheme 1976 under
the PF Act 1952, provides the respective benefits to
the employees.

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Insurance Benefits
• Insurance benefits are broadly divide in two
types
• 1. Life Insurance
• 2. Health Insurance

• Life Insurance is probably the oldest form of

company sponsored employee benefit. Grop
life premium are considerably smaller than
those of insurance purchased by the individual.04/20/09
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Insurance Benefits
• Health Insurance accidents and industrial
diseases growing out of the job are
compassable under state worker’s
compensation laws US / UK, India ESI
Act 1948.

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Fringe benefits and Tax.
• India , officially the Republic of India, is a country
in South Asia. It is the List of countries by area
country by geographical area, the List of countries
by population country, and the largest liberal
democracy in the world....
) the 'fringe benefits' are subject to the
Fringe Benefits Tax
• Fringe Benefits Tax
• Fringe Benefits Tax is a taxation of most, but not
all fringe benefits, which are generally non-cash
employee benefits....
(FBT), which applies to most, although not all,
fringe benefits.
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Advantages to employee.
• Employee advantages
• Peace of mind leading to better productivity
as employees are assured of provision for
themselves and families in any mishap.
• Employees with personal life insurance
enjoy additional protection
• Confidence in company's EB schemes
boost staff morale and pride in company

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Employee disadvantages

• In the UK these benefits are often taxed

at the individuals normal tax rate , which
can prove expensive if there is no
financial advantage to the individual from
the benefit.

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Employer advantages
• Helps attracts and retain better qualified
employees.
• Provides high risk coverage at low costs easing
the company's financial burden.
• Improves efficiency and productivity as
employees are assured of security for
themselves and their families.
• Premiums are tax deductible as corporation
expense, which means savings with quality
coverage.
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THANKS
YOU

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QUESTIONS

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References:-
• B. Flippo Edvin, Personnel Management, 6th edition, Pp- 330-
331.
• Park K, Park’s textbook of PREVENTIVE AND SOCIAL
MEDICINE,16th edi., M/s Banarsidas Bhanot Publishers,
Jabalpur,Pp-567- 570.
• Gankar S.V. & Mamoria C.B.,Personnel Management and
cases, Himalaya publishing house, Pp-490.
• Joshi Rosy & Gupta Shakshi K, Human Resource
Management ( With Case Study) Kalyani publishers,Pp-19.15-
19.19.
• www.google .com
Note : this is just a Class presentation only which is share to all.

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