Fringe Benefit – meaning:
• Any privilege, service, facility or amenity, directly or indirectly provided to employee by an employer • Any reimbursement for any purpose .
• Contribution to approved superannuation fund
The term Fringe benefits refer to various extra benefits provided to the employees, in addition to the compensation paid in the form of wage or salary. These benefits can be defined as any wage cost not directly connected with the employees productive effort, performance, service or sacrifice. Different terms are used to denote fringe benefits. They are welfare measures, social charges, social security measures, supplements, sub-wages, employee benefits etc. In addition workers commonly receive such benefits as holiday with pay, low cost meals, low-rent housing etc. Such additions to the wage proper are sometimes referred to as fringe benefits. Benefits that have no relation to employment or wages should not be regarded as fringe benefits even though they may constitute a significant part of the workers total income. Thus, fringe benefits are those monetary and non-monetary benefits given to the employees during and post employment period which are connected with employment but not to the employees contributions to the organization. Coverage: Fringe benefits covers bonus, social security measures, retirement benefits like provident fund, gratuity, pension, workmen’s compensation, housing, medical, canteen, co-operative credit, consumer stores, educational facilities, recreational facilities, financial advice and so on.
OBJECTIVES OF FRINGE BENEFITS:
The important objectives of fringe benefits are:
1. To create and improve sound industrial relations
2. To boost up employee morale.
3. To motivate the employees by identifying and satisfying their unsatisfied needs.
4. To provide qualitative work environment and work life.
5. To provide security to the employees against social risks like old age benefits and maternity benefits.
6. To protect the health of the employees and to provide safety to the employees against accidents.
7. To promote employees welfare by providing welfare measures like recreation facilities.
8. To create a sense of belongingness among employees and to retain them. Hence, fringe benefits are called golden hand-cuffs.
9. To meet requirements of various legislations relating to fringe benefits.
NEED FOR EXTENDING FRINGE BENEFITS
Most organisation have been extending the fringe to their employees, year after year, for the following reasons
i) Rising prices and cost of living has brought about incessant demand for provision of extra benefit to the employees.
(ii) Employers too have found that fringe benefits present attractive areas of negotiation when large wage and salary increases are not feasible.
(iii) As organizations have developed ore elaborate fringe benefits programs for their employees, greater pressure has been placed upon competing organizations to match these benefits in order to attract and keep employees.
(iv) Recognition that fringe benefits are non-taxable rewards has been major stimulus to their expansion.
v) 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.
(vi) The growth and strength of trade unions has substantially influenced the growth of company benefits and services.
(vii) The management has increasingly realized its responsibility towards its employees and has come to the conclusion that the benefits of increase in productivity resulting from increasing industrialization should go, at least partly, to the employees who are responsible for it, so that they may be protected against the insecurity arising from unemployment, sickness, injury and old age. Company benefits-and-services...