By

Rajeswari

I M.HRM

and Its Welfare

Fringe Benefits

What is Fringe Benefits

• Employment Benefits and services are alternatively

known as Fringes , Service Programs, employee

benefits or hidden payroll.

• An extra benefits and services include any benefitsthat the employee in addition to directremuneration.

How Fringe benefits are Provided ?

Fringe benefits are benefits provided by an employer to an employee, independent contractor or partner, some of which are tax-exempt when certain conditions are met. Recipients of taxable fringe benefits have to include the fair market value of the benefit in their taxable income for the year.

Need & Importance of Fringe Benefits

• To retain the employees.

• To motivate performance.

• As a social security.

• Trade Union demand.

• Skill shortage.

• Employee Demand.

Objectives of Fringe Benefits

The important objectives of fringe benefits are:a. To motivate the employees by identifying and satisfying

their unsatisfied needs.b. To create and improve sound industrial relations.c. To protect the health of the employees and to provide

safety to the employees against accidents.d. To provide security to the employees against social

risks like old age benefits and maternity benefits.e. To create a sense of belongingness among employees

and to retain them. Hence, fringe benefits are called golden handcuffs.

f. To promo the employees’ welfareg. To meet the requirements of various legislation

relating to fringe benefits.

Principles of Fringe Benefits

• Benefits and services are need to be provided to the employees on the basis of a genuine interest in the protection and promotion of their well-being

• To satisfy the real need of the employees

• Benefits need to be cost effective

• Benefits need to be as broad-based as possible

• Administration of the benefits need to be preceded by sound planning

• Employees need to be educated to make use of the benefits

• Fulfilling wishes of employees as expressed by their union representatives and bargaining the power of union which has to be considered

Types of Fringe/ Employee Benefits and Perks

1. For Employment Security2. For Health protection3. For old age and retirement4. For Personnel Identification,

Participation and Stimulation:

Fringe benefits Classified:

a) Payment For Time Not Workedb) Extra Pay For Time Worked:c) Employee Securityd) Retrenchment Compensation:e) Lay-Off Compensation:f) Safety And Health

8 Types of Fruitful Fringe Benefits (according to u.s.a)

• No-Additional-Cost Services•

Qualified Employee Discounts•

Working Condition Fringe Benefits•

De Minimis Fringe Benefits•

Qualified Transportation Fringe Benefits•

Educational Reimbursements and Allowances•

Qualified Moving Expense Reimbursements•

Qualified Retirement Planning Services•

Advantages of Employee Benefits:

Increase in entreat

Minimum throughput

Improvised self-esteem

Dedicated Workforce

Health is wealth

Regulatory in health checkup

Social security

A step for betterment

Increased productivity

Upbringing employees

Growth

Tax Advancement

Benefits offering advancement

Disadvantages of Fringe benefits

Difficult to keep everyone happy

Legalization andauthentication curse

Too expensive for the employees to fit into

Management of budget becomes

difficult

Difficulty in switching

Difficult to maintain

Need For Extending Benefits To Employees

(V)Rapid Industrialization, Increasingly Heavy Urbanization And The Growth Of A Capitalistic Economy Have Made It Difficult For Most Employees To Protect Themselves Against The Adverse Impact Of These Developments.

(Vi)The Growing Volume Of Labor Legislation, Particularly Social Security Legislation, Made It Imperative For Employers To Share Equally With Their Employees The Cost Of Old Age, Survivor And Disability Benefits.

(Vii)The Growth And Strength Of Trade Unions Has Substantially Influenced The Growth Of Company Benefits And Services.

(Viii)Labor Scarcity And Competition For Qualified Personnel Has Led To The Initiation, Evolution And Implementation Of A Number Of Compensation Plans.

(Ix)The Management Has Increasingly Realized Its Responsibility Towards Its Employees

Flexible Benefits• Flexible Benefits Allows Allow Employees To Pick Benefits That Most

Their Needs. The Idea Is To Allow Each Employee To Choose A Benefit Package That Is Individually Tailored To His Or Her Own Needs And Situation. It Replaces The Traditional “One-Benefit-Plan-Fits-All” Programs That Dominated Organizations For More Than 50 Years.The Average Organization Provides Fringe Benefits Worth Approximately 40% Of An Employee’s Salary.

The Three Most Popular Type Of Benefit Plans

Flexible Spending Accounts.

Plan to Pay

Modular Plans

Pre-designed package of benefitsMeets the needs of specific group of emp’sMay include only essential benefits

Designed for ParentsAdded Life InsuranceExpanded health coverage

Core- Plus Options

Core of essential benefitsAvailable options to choose benefitsBenefits credit- Purchase

401(k) system and its advantages

A 401(k) is a retirement plan that many businesses choose to offer. This plan allows employees to deposit a percentage of their income into an account and some employers also contribute to the account. Although it has obvious benefits for employees, this retirement plan provides advantages for your business as well.

Tax Benefits Requirements

Employee AcquisitionEmployee Morale

Implementation Tips

Administration of fringe Benefits step by step process:

Step 1• Establishing benefit objectives

Step 2• Assessing environmental factors

Step 3• Making the benefits competitive

Step 4• Making the benefits competitive

Step 5• Evaluation and control

Effective Communication Benefit:

Effectively communicating with employees about their benefits must be a

year round effort and should not be confined to blurbs of information

only during open enrollment periods.

The goal is to give the employee enough information to help them make

an informed decision about the benefit choices available for themselves

and their family, but not so much information that they throw up their

hands in despair.

Other items that can be useful in communicating with employees on issues that relate to their benefits are:

• Mass email notifications

• Employee Benefit Surveys

• Group Meetings/Benefits Fairs

• Premium/Benefits Calculators

Effective communications tacticsDifferences in communication styles and preferences are becoming more

pronounced.

• Generation Y likes to use text messages, tweets and instant messages to communicate.

• Baby Boomers and older Generation Xers prefer to use a phone to actually speak to someone rather than to text or tweet.

• Younger Millennial employees tend to use a lot of abbreviations and informal language in their everyday communication. They prefer to communicate through social media.

Steps for benefits Plans

Of Various Companies

Percent of Employers Offering Health Benefits

Top 10 Companies in India which provide good employee benefits

10. Make My trip

(fun activities and health care

benefits)

8. HCL Infosystems

(Employees program – maximizing

personal potential )

9. KotakMahindra

(going to movies contests, quiz, family days with colleagues

yoga and naturopathy and all corp sports activity

7.StandaradChartered bank

(colors of joy- for women employees ;

Happy Fridays 4-6 on any Fri. of the month)

2. Hindustan Unilever

(41 Aditya Birla public schools CBSE – at nominal cost , scholarship scheme “pratiba”)

3. Wipro ( all health care benefits , financial assistance to study –campaigns “ WIPRO CARES”)

5.Canon(high health care benefits and accidental insurance)

6. Airtel(opt flexible work

timings, provides world class fitness and spa facility in office – leave up to 1 years can be applied for higher education, six months for personal reasons)

1. Google India

(abundant initiatives to employees are added time to time and eminence communication- lot of innovation)

4. Intel Technology (India)(2 major bonus programmed, wide cover of medical dental and vision coverage plans, all employee get annual vacation leave, financial assistance recreational activities)

The 10 Best Companies for Employee Compensation and Benefits (2014)

1)Google - Perks include free food, massages, offsite trips to places like Vegas and Hawaii, and a flexible work schedule, the company environment is so outstanding that "you don't really want to leave campus."

2) Costco: Employees benefits, which include "Great health and dental insurance plan, 401k, paid vacation, paid holidays and paid sick time for both part time and full time employees." In addition, pay is "competitive," "raises are based on hours worked," and workers receive "twice a year bonuses after you hit top pay.“

3) Facebook: A job offer at the social network comes with access to an "onsite healthcare, chiropractor and acupuncture." Additional "fantastic benefits" include three free meals a day, snacks, Cal Train passes, and regular team happy hours. "The list goes on and on," writes one software engineer.

4) Adobe: The pay is "equitable if not better than peer companies" and the company offers pet insurance. Facilities get rave reviews, as does Adobe's vacation policy: “We have 28 days of vacation & receive a sabbatical every 5 years,“

5) Epic Systems: Calling all recent grads: "The pay is great fresh out of college, and there are lots of nice benefits (eg. weekend travel, hotel and airline points),“ Health insurance "is obviously a huge win here," says a project manager, while the company's atmosphere is described as "relaxed" and "beautiful."

6) Intuit: Perks include days of for non-profit work, on-site amenities and a flexible work schedule. Also? The companies 401k plan has "the most handsome match policy I've ever seen," writes a sales rep.

7) USAA: The company's "excellent benefits" include an eight percent dollar for dollar matching for its 401k program, and $5,000 towards approved education costs. Apparently, the bonuses aren't bad either.

8) Chevron: The energy corporation will pay "75 percent of any degree or training you wish to pursue" as long as it's in some way related to your role in the company, says an IT manager. In addition, the company culture is "genuine" and "friendly."

9) Salesforce.com: Perks include "stocked kitchens, gym reimbursement, and trips to Hawaii," writes an account executive. The company will also pay for 48 hours of volunteer work in the community, and will "double any charitable donations via the sales force Foundation."

10) Monsanto: Employees praise the fringe benefits, including daily free meal. While the company helps manage work life balance, when you do stay late, you are "compensated for long work hours," writes an employee.

Top 20 Employee Benefits & Perks

1. Netflix offers one paid year of maternity and paternity leave to new parents. They also allow parents to return part-time or full-time and take time off as needed throughout the year.

2. REI encourages its employees to get outside by offering two paid days off, called “Yay Days,” a year to enjoy their favorite outside activity.

3. Salesforce employees receive six days of paid volunteer time off a year, and if they use all six, they receive a $1,000 grant to donate to a charity of their choice.

4. Spotify provides six months of paid parental leave, plus one month of flexible work options for parents returning to the office. The company also covers costs for egg freezing and fertility assistance.

5. World Wildlife Fund employees take Friday off every other week, also known as “Panda Fridays” at the nonprofit.

6. Airbnb, the Best Place to Work in 2016, gives its employees an annual stipend of $2,000 to travel and stay in an Airbnb listing anywhere in the world.

Top 20 Employee Benefits & Perks

7. PwC offers its employees $1,200 per year for student loan debt reimbursement.

8. Pinterest provides a unique take on the parental leave policy by providing four paid months off, plus an additional month of part-time hours, as well as two counseling sessions to create a plan to re-enter the workplace.

9. Burton employees receive season ski passes and “snow days” to hit the slopes after a big snowfall

10. Twilio offers employees a Kindle plus $30 a month to purchase books.

12. Accenture covers gender reassignment for their employees as part of their commitment to LGBTQ rights and diversity.

13. Walt Disney Company wants its employees to enjoy the “Happiest Place on Earth” as much as their visitors by offering free admission to its parks for employees, plus their friends and family, as well as discounts on hotels and merchandise.

14. Facebook provides $4,000 in “Baby Cash” to employees with a newborn.

Top 20 Employee Benefits & Perks

15. Evernote hosts classes through “Evernote Academy,” which offers team-building courses like macaroon baking.

16. Epic Systems Corporation offers employees a paid four-week sabbatical to pursue their creative talents after 5 years at the company.

17. Adobe shuts down the entire company for one week in December and one week over the summer.

18. Asana employees have access to executive and life coaching services outside of the company.

19. Zillow pays for employees who are traveling to ship their breast milk.

20. Google provides the surviving spouse or partner of a deceased employee 50% of their salary for the next ten years.

Conclusion:

The benefit will help the employees to work better and stay with the

organization with which they are related for a long period of time. This

policy of providing better employee benefits helps in demonstrating solid

benefits to the employee so that it helps in proving the organization that

they offer enough deed to keep their employees delighted. It sort of

generates stability amongst the organization and builds a relation which

states that the company has the power to praise their employees or the

fresh talent by offerings. Government also for increasing the economic

security of employee is helping to keep this scheme mandatory in

different organizations.