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Benefits Policy

Benefits Policy for Organizations

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Manish Saluja
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66 views5 pages

Benefits Policy

Benefits Policy for Organizations

Uploaded by

Manish Saluja
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Benefits Policy

Objective

The purpose of < Company Name here >'s Employee Benefit Plan policy is
to provide an overview of the primary benefits and their regulations that
govern compensation and benefits to employees.

Scope and Applicability

This policy applies to all employees of < Company Name here >.

This policy is owned by < Name of the Person > and reachable @ <
Contact Number > and < email address >

Policy / Process

Mandatory Employee Benefits

Employees’ Provident Fund

Employees’ Provident Fund (PF), Employee Pension Scheme (EPS) and


Employees’ Deposit Linked Insurance (EDLI) come under the purview of
Employees’ Provident Funds and Miscellaneous Provisions Acts, 1952.
These are funded by the employees' and employers' monthly
contributions but are governed and managed by the Employee Provident
Fund Office (EPFO).

 Companies employing more than 20 employees must implement PF


for their employees
 PF is a retirement fund of the employee
 Employers are mandated to contribute 12% of the Basic pay of
employees, up to a maximum threshold of Rs.15,000/- per month.
This is called ‘Regular PF’
 Employee also contributes 12% of their Basic Pay towards their own
PF Account
 From employer’s contribution, 3.67% goes to the PF Account and
8.33% goes to Pension Scheme (EPS) of the employee
 Employer contributes 0.5% of employee's basic pay towards
Employee Deposit Linked Insurance of the employee
 Employer contributes 0.5% of employee's basic pay towards PF
Admin charges
 Employers and employees are allowed to contribute 12% on actual
Basic pay earned by the employee, i.e., more than the max
threshold of Rs.15K. This is called ‘Excess PF’
 Moreover, employees are allowed to contribute in excess of 12%
towards their own PF account, which is called ‘Voluntary PF (VPF)’
 Employers need not contribute to employee’s VPF
 Companies having their own PF trust are called ‘Exempt
Organisations’
 PF can be withdrawn only upon retirement or permanent relocation
abroad
 PF advance can be availed only under certain circumstances or
occasions as per the Act

Employees' State Insurance Scheme

Employees' State Insurance Corporation (ESIC) manages the ESI Scheme


under ESI Act, 1948. This is a comprehensive benefit scheme covering
medical costs for the family, including parents and dependent siblings,
disability compensation, STD and LTD benefits, widow’s and children’s
pension and other medical benefits. It is funded by employer and
employee contributions as well as Government contributions.

 Employees' State Insurance Corporation (ESIC) is managed under


ESI Act, 1948
 ESI is a health insurance scheme for employees & their family
members
 Employees earning a Gross Income of less than Rs.21,000/- pm
(Rs.25,000/- pm for disabled persons) are to be covered mandatorily
 Employee contributes 0.75% of their gross income towards the
scheme
 Employer contributes 3.25% of employee's gross income towards
the scheme
 'Family members’ for the purpose of the scheme means self,
spouse, children, parents, unmarried sisters and unemployed
brothers up to the age of 21 years

Statutory Leave

Leave is regulated by each State’s Shops & Establishments Acts or by the


Factories Act (depending on which Act the company has registered
under). These cover sick leave, casual leave, privilege/earned leave,
national holidays, State Founding Day, and other leaves such as
bereavement leave.

< Company Name > has adopted the following leave policy. Please also
refer to the Employee Leave policy for eligibility and other detailed
information.

 Annual Leave year: <Calendar year / Financial year>


 Privilege / Annual Leave: < No. of days per year >
 PL carry forward: < No. of days per year > up to a maximum
accumulation of < No. of days >
 PL encashment: < No. of days per year > up to a maximum < No. of
days > leaves
 Casual Leave: < No. of days per year >
 Sick Leave: < No. of days per year >
 Bereavement Leave: < No. of days per year >

Gratuity

Gratuity is a gratuitous payment due to an employee after 4 years and 8


months of continuous service in the same organisation and only upon
termination, resignation or retirement or earlier in case of death.

 Standard formula for gratuity is ‘half a month’s pay for each year
completed by an employee’
 Formula: Last paid Basic pay / 26 days x 15 days x number of years
served
 Gratuity is non-taxable up to INR 20 lakhs during the entire career
cycle of an employee

Maternity Leave

Paid maternity leave of 26 weeks is mandatory for women employees for


up to 2 children. For the third child onwards, it is 12 weeks of paid
maternity leave. Of the 26 weeks, employees have to proceed on leave at
least 8 weeks prior to the estimated delivery date. Post the 26 weeks,
employees can avail of another month’s leave based on medical reasons
only and upon certification by a medical practitioner.

In addition, the Maternity Benefits (Amendment) Act, 2017, requires


employers having more than 50 employees to provide a paid creche for
children up to the age of 6 years.

Bonus

The Company adheres to the Payment of Bonus Act of 1965 (POBA) where
all employees are eligible for an annual bonus each year.

 Employees earning Basic Pay of less than Rs.21,000/- per month


and having worked for minimum of 30 days in a financial year are
eligible
 Contract employees / Consultants / Interns, etc., are not eligible
 Bonus must be paid within 8 months from the close of books of
accounts
 Companies can choose to pay a percentage between a minimum of
8.33% to a maximum of 20% on a threshold base amount of
Rs.7,000/- per month or as per the Minimum Wages Act of that
State, whichever is higher

Supplementary Employee Benefits

Group Medical Insurance

< Company Name Here > provides group medical insurance which
provides hospitalisation coverage with a waiver for waiting periods and
pre-existing diseases exclusions, maternity benefits, newborn baby cover,
and add-on hospitalisation benefits such as new types of treatment for
cancer, cyber-knife or robotic treatment and infertility or fertility
treatment. The sum assured is based on the grade the employee is
currently in.

Subsidised Transportation

< Company Name Here > offers transportation facilities for its employees.
Company transport is mandatory for employees working in the night shift,
especially women employees. Employees working in the night shift will be
picked up and dropped from their respective homes for their safety and
security. Additionally, when women employees have to be picked up first
and / or dropped last, a security guard or a male employee must
accompany the vehicle without fail.

Transport facility is optional for employees working in general shifts but


provided at subsidised costs. Employees must opt for transport on a
monthly basis and not as and when required. Employees' monthly share
will be deducted from their monthly pay, whether the transport has been
utilised or not. Pick and drop will be from designated points only.
Employees are not allowed to deviate the vehicle from the pre-assigned
route for their personal work or any other reason or ask to be picked
from / dropped at alternate destinations.

Subsidised Cafeterias

< Company name Here > offers subsidised cafeteria for their benefit.
Employees can <utilise Sodexho coupons / swipe their employee badge /
swipe cafeteria card / pay cash or by card> at the counter to avail of food
items or any beverage.

Loans

< Company Name Here > offers loans to permanent employees for
housing, automobile purchase, education, marriage, medical expenses
and other personal exigencies. The loans are offered at <a subsidised
interest rate of (xx%) / interest-free up to a maximum amount of
Rs.xxxxx>

Service Awards

< Company Name Here > offers long-service awards on designated


tenure anniversaries and upon retirement.

Special Circumstance and Exception

Any Deviation from this policy has to be approved by the Management.


Any change to the policy has to be approved by HR.
Non-compliance and Consequence

Violation of this policy is subject to disciplinary action, up to and including


termination.

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