India has one of the largest workforce in the world. With employees being the pillars of any successful company, it is important to make sure that they are provided with adequate employee benefits to ensure they are happy. Employee benefits in India can be significant as a vast majority of the Indian working population are employed in the service sector and providing employee benefits can make them feel they receive value from their work. Employee benefits like employee wellness programs show that the organization values and cares about the employees.
Importance of Employee Benefits
Employee benefits are the non-financial benefits provided to employees apart from their salaries. Some employee benefits are governed by laws like group health insurance, retirement benefits etc. Other benefits include gym membership, paid vacations, employee health and wellness initiatives.These benefits will satisfy the employees and make them feel content. These employee benefits can boost their productivity and make them focussed on the long term goals of the organization. They can improve employee retention and create a sense of loyalty among the employees towards their organization. Employee benefits like employee wellness programs and group health insurance policy can reduce their stress and make them more proactive. This will decrease employee absenteeism. Providing group health insurance for employees that includes the corona kavach policy, helping the employees with vaccine for covid 19 India can cut their financial burden and makes them more productive.
Types of Employee Benefits
The employee benefits in India can range from providing employer paid health insurance during the working period to providing retirement benefits to the employees. Let’s dig deep into the employee benefits provided in India.
Paid leave in India
The organizations in India provide paid annual leaves, sick leaves and maternity leaves. Sometimes the untouched leaves can be carried forward to the next working year and taken during the time of need.
Paid maternity leave in India
Under the Maternity Benefit Act, maternity leave has been increased from 12 weeks to 26 weeks. Eight weeks of prenatal leave is provided for the employees. A woman with already two more children is eligible for 12 weeks of maternity leave. Apart from this adoption leave of 12 weeks is provided for adopting babies less than three months of age.
Group Health Insurance for Employees
Providing employer sponsored health insurance plans is one of the most beneficial and costly employee benefits the organizations offer. The group health insurance plans include reimbursement of medical bills, annual health check-ups, discounts in pharmacy bills etc. The group health insurance policy covers the employees and mostly their spouses, children and their dependent parents as well. Usually the sum insured in a group health insurance for employees is between 2 lakhs to 5 lakhs. This will greatly help the employees as it will reduce their financial burden during medical emergencies.
Retirement Benefits in India
Retirement benefits in India include Employees Provident Fund(EPF), Gratuity, pension plans in India etc.
Employees Provident Fund(EPF)
The Employees Provident Fund(EPF), is governed by the Employees Provident Fund and the Miscellaneous Provision Act. The EPF is a part of social security contributions. According to this act, the employees who are eligible for the PF act have to contribute a fixed amount of 12% of their salary to the Employees Provident Fund. The employer also contributes 12% of the basic salary of the employee, out of this around 8.33% contributions go to the pension fund.
The Gratuity Management Act governs the Gratuity employee benefit. Gratuity amount is the amount paid by the employers to their employees in return for the services they offered to the company/organization. The employee must be involved with the company for a minimum period of 5 years to avail gratuity. The gratuity calculation formula isG = N*B*15/26Where,G is GratuityN is Number of years served in the companyB is Last drawn salary along with Dearness Allowances
Pension Plans In India
Only a very few private organizations offer pensions as employee benefits to their employees. Pensions plans in India are like an investment plan where a part of the employees regular income is invested in a plan that provides income after retirement. This is divided into two namely the accumulation stage and vesting stage. In the accumulation stage the employee pays a part of his salary until his retirement and in the vesting stage the employee or the nominee (after the death of the pensioner) receives the pension.
Wellbeing Programs for employees
Many organizations have started to provide wellness programs for employees realizing the importance of the mental and physical health of employees. They include meditation services, therapies for stress management, Yoga programs etc. The physical health management is carried out by providing gym memberships, access to fitness apps etc.In most the wellness programs for employees is either fully funded by the organization or it is splitted between the employees and the organization.
Employee Benefits In India stand as the head of an organization as they determine the employee retention rate and loyalty of an employee towards his/her organization. Gone are the days when only the salary was provided to the employees. Nowadays the employees choose a job on assessing the employee benefits provided like group health insurance plans, employee wellness programs etc. After all a company grows successful only if there is good employee engagement and the employees are satisfied and are proactive. At Paz Care, we offer group health insurance plans to the employees of your organization and also help you to build your employee wellness program. Have a question? We are here to help. Contact us for more information.