Do you know how much time an average Indian spends at work in their lifetime?

The answer may shock you – It's estimated that the average Indian spends over 90,000 hours at work, which is equivalent to more than one-third of their life.

In a post-pandemic world, growing awareness around these facts have led to a a permanent shift in employee expectations from organisations for the better.

The days when a good salary package was sufficient to attract and retain the best talent are long gone. Nowadays, the workforce expects much more from their employers, including but not limited to, flexible work arrangements, comprehensive healthcare plans, and a healthy work-life balance.

The importance of employee benefits is now as crucial as compensation, and both these aspects are integral parts of creating a desirable employee experience.

A study by Mercer Marsh Benefits reveals that 68% of companies in India consider employee benefits a vital tool for attracting and retaining talent. Moreover, a report by Aon Hewitt revealed that organisations with highly effective benefits programs have a 31% lower voluntary turnover rate than those with ineffective programs.

What are employee benefits?

Employee benefits also referred to as fringe benefits, are extra incentives, rewards and avenues of recognition, offered by companies in addition to regular compensation. These benefits can be given to all employees or selectively to top executives. While some benefits reimburse employees for work-related expenses, others aim to enhance overall job satisfaction.

In essence, employers utilise fringe benefits to attract, inspire, and retain high-performing individuals.

What are the different types of employee benefits?

With the increasing focus on employee well-being and work-life balance, organisations are offering a variety of benefits, such as healthcare benefits, retirement benefits, paid time off, and flexible work arrangements to their employees.

Healthcare benefits can include medical, dental, and vision insurance, as well as access to wellness programs. Retirement benefits can include pensions or 401(k) plans. Paid time off can include vacation days, sick leave, and holidays. Flexible work arrangements can include telecommuting or flexible work schedules.

These benefits not only contribute to the overall well-being of employees but also help in reducing absenteeism and improving employee retention.

What you should know about these Top 3 benefits:

Are you tired of offering the same old benefits to your employees? Are you looking to create a positive work environment that attracts and retains top talent? Then you won't want to miss out on learning about these top three benefits that are taking the HR world by storm.

In 2023, companies are still facing fierce competition to attract and retain top talent. As the job market continues to evolve, so do the expectations of employees, who are seeking more than just basic benefits like health insurance and retirement plans.

Sure, health insurance and retirement plans are important, but have you considered how meal cards, daycare facilities, and unique leaves like menstrual leaves, pet care leaves, and bereavement leaves can significantly improve your employees' lives and job satisfaction?

These benefits can make a real difference in the well-being and work-life balance of your team, creating a happier, more productive workforce.

But what makes these benefits so special? How do they work in practice? And what kind of impact can they have on your company's culture and bottom line?

Let's dive into what you should know about these top three benefits.

Meal Cards:

Meal cards are a popular type of employee benefit in India, and are often provided by employers to their employees as a way to help them cover the cost of daily meals. These cards work like prepaid debit cards and can be used at various restaurants, food chains, and grocery stores.

Here are some important facts about meal cards:

Laws and Regulations: The use of meal cards is regulated by the Income Tax Act, which allows for a tax-free meal allowance of up to INR 50 per meal. The total exemption per day is INR 150, or INR 4,500 per month. Additionally, the Goods and Services Tax (GST) is not levied on the purchase of food items with a meal card.
Benefits to Employers: Providing meal cards to employees can lead to a number of benefits for the employer. For one, it can be an effective way to attract and retain talent, as it is seen as a desirable perk. Additionally, it can help to increase employee productivity, as employees are able to quickly and easily purchase meals during their workday.
Benefits to Employees: For employees, using meal cards can lead to significant savings, as the cost of meals purchased with the card is tax-free. Additionally, it can help to ensure that employees have access to healthy and nutritious food options, which can lead to improved overall health and well-being.
Examples of Meal Card Providers: There are several companies that offer meal card services in India, including Sodexo, Edenred, and Zeta. These companies typically work with a network of vendors, allowing employees to purchase food and beverages from a wide variety of options.

Overall, meal cards are an excellent employee benefit that can help improve employee satisfaction and reduce the tax burden on both the employer and employee. As long as the value of the card does not exceed the prescribed limit, it is not taxable as perquisites and is, therefore, a cost-effective way for employers to provide their employees with a valuable benefit.

Daycare or Creche Facilities:

Are you aware that as per the Maternity Benefit (Amendment) Act, 2017, employers are now required to provide a creche facility for their female employees? This is a great step towards supporting new mothers in their transition back to work after maternity leave.

Laws and regulations: In India, there are several laws related to daycare facilities for employees. The Maternity Benefit Act of 1961, mandates that every establishment employing 50 or more employees must have a crèche facility within a prescribed distance. The crèche must be accessible to the mother, have adequate ventilation, and be maintained in a hygienic condition. The government has also introduced the National Policy for Children, 2013, which aims to provide comprehensive childcare services, including daycare facilities, to working parents.
Benefits to Employees: Providing daycare facilities to employees has several benefits. First and foremost, it allows working parents, especially mothers, to focus on their work without worrying about their child's safety and well-being. It also helps reduce absenteeism, as parents are less likely to take unplanned leave to care for their children. Moreover, it can improve employee morale and retention, as it shows that the employer cares about the well-being of their employees and their families.
Taxes: In terms of taxation, the provision of daycare facilities to employees is considered a tax-free benefit under Section 10(14) of the Income Tax Act. However, there is a limit on the amount that can be claimed as a deduction. The maximum amount that can be claimed as a deduction is Rs. 1,500 per month per child up to a maximum of two children. Any amount over and above this limit will be taxable as per the employee's income tax slab rate.

Overall, the mandatory creche facility is a positive step towards supporting working mothers and ensuring gender equality in the workplace. Employers must comply with this new requirement and look for ways to make it smooth and beneficial for both the employees and the company.

Unique Leaves:

Unique leaves such as menstrual leaves, pet care leaves, and bereavement leaves have gained popularity in recent times as employers recognise the importance of offering benefits beyond the traditional health insurance and retirement plans. These benefits not only provide employees with greater work-life balance but also help employers attract and retain top talent.

1. Menstrual Leaves: Menstrual leaves, also known as period leaves, are a type of leave that allows female employees to take time off from work during their menstrual cycle. While not yet widely regulated by law, some companies have started to offer menstrual leaves as part of their employee benefits package. These leaves are especially important for women who experience severe menstrual symptoms, such as cramps, nausea, and migraines.

The benefits of menstrual leaves are multifold. Firstly, it shows that the employer values and supports their female employees. It can help reduce absenteeism and presenteeism, as employees are more likely to take time off when they need it and return to work refreshed and productive. Secondly, it can help break the taboo around menstruation and raise awareness about women's health issues. This can contribute to a more inclusive and supportive workplace culture.

2. Pet Care Leaves: Pet care leaves are a type of leave that allows employees to take time off from work to care for their pets. While not yet widely regulated by law, some companies have started to offer pet care leaves as part of their employee benefits package. These leaves are especially important for employees who are pet owners and need to take care of their pets in case of illness or emergencies.

The benefits of pet care leaves are that they can help reduce stress and anxiety for employees who are pet owners. It can also help improve employee morale and retention, as it shows that the employer values and supports their employees' personal lives. Additionally, pet care leaves can help employees avoid the need to take unplanned leave or work from home, which can be disruptive to their work and productivity.

3. Bereavement leave: Also known as compassionate leave, this type of leave allows employees to take time off work to grieve the loss of a loved one. It can be paid or unpaid, and the amount of time off may vary depending on the relationship with the deceased and the cultural or religious customs of the employee. Bereavement leave is important to show employees that the employer cares about their emotional well-being during a difficult time.

4. Volunteering leaves: Some companies allow employees to take paid time off to volunteer for a cause or charity of their choice. This can be a great way to support employees in their desire to give back to the community and help foster a positive company culture that values social responsibility.

5. Education leave: Education leave allows employees to take time off work to pursue further education or training related to their job. This type of leave can be paid or unpaid, and the amount of time off may vary depending on the duration and nature of the education or training program. Education leave is a great way to support employee development and show that the employer is invested in their growth and success.

6. Sabbatical leave: Sabbatical leave is an extended period of time off work, typically ranging from a few months to a year. This type of leave is often used for personal or professional development, such as travel, research, or writing. Sabbatical leave may be paid or unpaid, depending on the employer's policy. This type of leave is important to help prevent burnout and allow employees to recharge and come back to work refreshed and energised.

Taxes: The tax treatment of unique leaves may vary depending on the type of leave and the country's tax laws. In general, paid leaves are generally not taxable, and any payments made to employees during their leave are considered regular salaries or wages. However, if an employee receives a lump sum payment in lieu of accumulated paid leaves upon resignation or retirement, the amount may be taxable under certain conditions.

Additionally, some countries have tax laws that exempt certain types of leaves from taxation.

For example, in India, menstrual leave is considered paid leave and is taxed in the same way as regular salary. On the other hand, pet care leave and vacation leave are not specifically mentioned in the tax laws but may be considered taxable income if they are paid.

It's always a good idea for employers to consult with their local tax authorities to ensure compliance with the latest tax laws and regulations related to unique leaves. Employers can also consult with a tax professional or accountant to understand the tax implications of offering such leaves to their employees.

What can you do to implement these employee benefits today?

Offering impactful employee benefits is not just a nice-to-have but an absolute must-have in today's competitive job market. By providing benefits such as meal cards, daycare facilities, and paid leaves, you can set your business apart from the rest and create a work culture that employees will love.

But where do you start? Implementing these benefits may seem like a daunting task, but our team of experts can work with you to create a tailored benefits package that meets the unique needs of your business and employees. Our solutions are affordable and easy to implement, so you can start reaping the benefits right away.

Schedule a free consultation call today and take the first step towards becoming an employer of choice.

FAQs

What are employee benefits or fringe benefits?
‍Employee benefits or fringe benefits are additional compensation or perks provided by employers to their employees apart from their regular wages or salaries.
What are some common examples of employee benefits in India?
‍Common examples of employee benefits in India include health insurance, retirement plans, paid time off, sick leave, parental leave, flexible work schedules, and transportation reimbursement.
Are employee benefits mandatory in India?
‍There are some mandatory employee benefits in India, such as contributions to employee provident fund (EPF) and employee state insurance (ESI), which are required by law for certain types of companies.
Can employers choose which employee benefits to offer?
‍Yes, employers can choose which employee benefits to offer. Some benefits may be offered universally to all employees, while others may be offered only to specific levels of employees.
How are employee benefits taxed in India?
‍The tax treatment of employee benefits in India varies depending on the specific benefit. Some benefits, such as medical reimbursements and meal allowances, may be tax-exempt up to certain limits. Other benefits may be fully or partially taxable as perquisites.
Are employee benefits negotiable during the hiring process?
‍Yes, some employee benefits may be negotiable during the hiring process, especially for higher-level positions or in cases where the candidate has specialised skills or experience.
Can employees choose which benefits to receive?
‍In some cases, employees may have the option to choose which benefits to receive, such as in flexible benefit plans. However, this depends on the specific policies of the employer.
Can employee benefits be taken away by the employer?
‍Employers may be able to make changes to employee benefits, but they generally cannot take away benefits that have already been earned or promised to employees without providing adequate notice and compensation.