benefits and ex-gratia

8/8/2019 Benefits and Ex-Gratia

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Name:

Archit Patodi 142Binal Kataria 128

Cheni Agrawal 162

Latika Pathela 141

Ronak Mall 132

Rahul Panagaria 137


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Meaning

Compensation is a systematic approach to

provide monetary as well as non monetary

values to employees in exchange of the

work performed in the organization.

Total compensation =

Direct + Indirect Compensation

Base Pay Incentives Benefits


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Benefits

Employee benefits typically refers to retirement plans,health life insurance, life insurance, disability insurance,vacation, employee stock ownership plans, etc.

Benefits are increasingly expensive for businesses toprovide to employees, so the range and options of

benefits are changing rapidly to include, for example,flexible benefit plans.

Benefits are forms of value, other than payment, that areprovided to the employee in return for their contribution tothe organization, that is, for doing their job.

Some benefits, such as unemployment and worker's

compensation, are required under law. (Worker'scompensation is really a worker's right, rather than abenefit.)


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Nature of benefits

Tangible benefits are direct in nature

and directly benefit the employee in

terms of additional services or facilities.

Intangible benefits are less direct, for

example, appreciation from a boss,

likelihood for promotion, nice office, etc.


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Why company offers benefits?

Reasons

Cost of living

Reward

employees

Industrial

relations

Specialbenefits

Attract &retain talent

Substitute for

compensation

Tax free in

nature


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Types of benefits

benefits

security

financial

offerings

health


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Security

Unemployment compensation

Life Insurance

Disability Insurance

Early Retirement Options

Pension Plans

Dependent benefits


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Health

Health-Care Insurance

Free Centers & Gyms

Medical Care

Psychiatric Counseling

Medical facilities to family

Maternity Leave


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Flexible benefits

A plan that allows employees to prefer fromthe group of benefits offered by the employer.

Reasons:

perceived value of benefits depend onemployees age &family status.

by tailoring the benefit package employeesget maximum value without additional cost onemployers side.

flexible plans heightens employeesawareness about cost and value of benefitsoffered.


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Problems of Flexible benefits

Inappropriate package selection of

benefits

Benefits Requests are hard to

predict


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Repayment of benefits

imp

rop

erly received

Benefits received by any individual notlawfully entitled thereto, he is liable torepay to the corporation the value of the

benefits or the amounts of such payments. Incase of his death his representative shall

be liable to repay the same from the assetsof the deceased, if any, in his hands.

The amount recoverable under this sectionmay be recovered as if it was an arrear ofland revenue.


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Benefits not to be combined

An insured person shall not be entitledto receive for the same period:A) both sickness and maternity benefits

B) both sickness and disablement benefit fortemporary disablement

C) both maternity and disablement benefitfor temporary disablement

When a person is entitled to more thanone benefits in sub section(i) he shall beentitled to choose one.


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Ex-gratia

Ex-gratia is When something has beendone ex gratia, it has been donevoluntarily, out of kindness or grace.

An implied term of employment cannotbe inferred where the employer makes itclear at the time of payment that he wasmaking ex-gratia payment and it shall

not constitute precedent for future. It is not a part of salary and is totally

dependent on irregular events.


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cont

Payments made to staff for his daughterswedding.

Payments made to workers in case of his

childs accident.A company conducting layoffs may make

an ex gratia payment to the affectedemployees that is greater than the statutory

payment required by the law, perhaps ifthose employees had a long and wellperforming service with the company.


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Example The contents of the salary break up is as below, you can prepare it at the suitability of

your own. HRA would be 50 or 60% of basic.

BasicHRACCA - 825/- is exempted from taxOther AllowanceMobile ReimbursementMedical Reimbursement of 1250/month is exempted from taxGross Per Month = Sum of all the above.Gross Per Annum= 12*Gross/MonthPF Contribution= 12% of Basic/AnnumESI Contribution = 4.75% of Gross/AnnumMedical = The medi claim facility provided to an employee who are not covered underESI as the maximum ceiling forESI is 10000/Month.Getting more than this will be covered under Medi claim or it depends on companypolicy

EX-Gratia/Bonus = A fixed amount as Bonus

Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia

Annual Total Cost = AFGC + PF+ESIC

Annual total cost is also called as CTC.

Apart from this Food coupons, Holiday package and Furnishing items are included intheir CTC.


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Thank You

benefits and ex-gratia

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