Types of Fringe Benefits

Everything you need to know about the types of fringe benefits provided to employees.

Fringe benefits are the programs conducted for the benefit of employees. These are offered by the employers and are not included in I their wages or salaries.

Fringe benefits can make up approximately 30 % of the total remuneration of employees. These benefits are offered to retain employees as well as attract candidates in the organization. There are a number of reasons and concerns that should be kept in mind while implementing fringe benefits.

The types of fringe benefits can be studied under the following headings:-

1. Payment for Time not worked 2. Protection against Hazards 3. Employee Services 4. Legal Payments 5. Old Age and Retirement 6. Health Protection

7. Personal Identification, Participation and Stimulation 8. Workmen’s Compensation 9. Voluntary Arrangements 10. Welfare and Recreational Facilities 11. No-Additional-Cost Services and a Few Others.

---

Types of Fringe Benefits: Protection against Hazards, Employee Services, Old Age and Retirement Benefits and a Few Others

Types of Fringe Benefits – 5 Main Types: Payment for Time not Worked, Protection against Hazards, Employee Services, Old Age and Retirement Benefit and a Few Others

Fringe benefits or supplementary compensation involve all expenditures by an employer designed to benefit employees over and above regular base pay and direct variable compensation related to output.

Fringe benefits may include the following:

Type # 1. Payment for Time not Worked:

Examples in this area include paid rest periods, paid lunch periods, wash-up time, clothes-change time, get-ready time, vacations, holidays, sick leave, personal leave, voting time, etc. There is seemingly no end to the innovation of new reasons for payment for time not worked.

Type # 2. Protection against Hazards:

There are a number of hazards that might be faced by the employee. Income maintenance during such periods is the purpose of fringes designed to protect against the hazards of illness, injury, unemployment, permanent disability, old age, and death.

Type # 3. Employee Services:

Big organisations offer certain employee services on a continuing basis, such as housing, food, medical, recreation, and so on. They have such fringe-benefit programs as cafeterias, career counselling, educational tuition, and aid in housing, medical services, low-cost loans, use of organisation vehicles for personal use, day-care centers for children and paid membership in certain professional organisations.

Type # 4. Legal Payments:

In most countries, the governments have passed several laws for protecting employees against the major hazards of life. Payments under this category may involve unemployment or lay-off compensation, employees’ insurance, old-age benefits under social security, etc.

Type # 5. Old Age and Retirement Benefits:

Benefits under this category include – deferred income plans, pension, gratuity, provident fund, old age assistance, old age counselling, medical benefits for retired employees, travelling concession to retired employees, jobs to sons/daughters of the deceased employees and the like.

The list of fringe benefits has increased manifold over the years and the expenditures on such programs have in many cases equalled or exceeded the base wage compensation to the employees. That is why, the term ‘fringe’ is deemed no longer appropriate and it is replaced by terms such as ’employee benefits’ and ’employee services’.

Perquisites:

Several service benefits have been initiated by industrial giants particularly for the executives. Such benefits are referred to as ‘perquisites’ or ‘perks’. Perks include chauffeur driven car, corporate aircraft, home security, company apartment, club membership, paternity leave, self-defence training, company credit card, entertainment, etc.

---

Types of Fringe Benefits – According to Dale Yoder and Paul D. Standonar: Employment Security, Health Protection, Old Age and Retirement and a Few Others

Fringe benefits are the programs conducted for the benefit of employees. These are offered by the employers and are not included in I their wages or salaries. Fringe benefits can make up approximately 30 % of the total remuneration of employees. These benefits are offered to retain employees as well as attract candidates in the organization. There are a number of reasons and concerns that should be kept in mind while implementing fringe benefits.

These reasons and concerns are as follows:

i. Paternalistic or Humanistic Reason – Refers to a voluntary action by employers taken for employee welfare. Industrial employment is often seen as an unattractive opportunity, thus, management has to find ways to attract and retain employees. This is assured by offering fringe benefits.

ii. Statutory Requirements – Refers to the requirements that make an organization legally answerable for its actions. These requirements have a number of social and legal legislations, which have been incorporated time and again. Certain benefits have become statutory because of the social legislations introduced in 1940s.

iii. Security – Refers to a feeling of safety and fulfillment of social needs. These are granted in the form of pension, provident fund, and gratuity. Pension programs are nowadays linked to group insurance as a type of fringe benefit.

iv. Hazards of Industrial Life – Refers to the dangers associated with working in specific industries. If the work conditions in an industry are neither safe nor healthy, it should provide insurance covers, medical re-imbursements, and other health care services to their employees to compensate for the same.

v. Competition – Refers to the business rivalry between the competitors. Special pay allowances and reimbursements are given for this purpose.

According to Dale Yoder and Paul D. Standonar, there are four types of welfare or fringe benefits:

1. Employment Security:

Benefits under this head include unemployment insurance, technological adjustment pay, leave travel pay, overtime pay, level for negotiation, leave for maternity, leave for grievances, holidays, cost of living bonus, call-back pay, lay-off pay, retiring rooms, jobs to the sons/daughters of the employees etc.

2. Health Protection:

Benefits under this head include accident insurance, disability insurance, health insurance, sickness insurance, hospital facilities, life insurance, medical care, sick leave etc.

3. Old Age and Retirement:

Benefits under this head include deferred income plans, pension, gratuity, provident fund, old age pension, old age counseling, medical benefits for retired employees, travelling concessions to retired employees etc.

4. Personal Identification, Participation and Stimulation:

Benefits under this category include anniversary awards, attendance bonus, canteen, educational facilities, beauty parlour services, housing, co-operative credit societies, co-operative consumer stores, quality bonus, income tax aid, recreational programmes, safety meas­ures etc.

Robert H. Hoge has classified the welfare measures as follows:

1. Payment for time not worked.

2. Extra pay for time worked.

---

Types of Fringe Benefits- Top 7 Types: Payment for Time not Worked, Employee Security, Workmen’s Compensation, Health Benefits and a Few Others

1. Payment for time not worked – This includes- (a) hours of work, (b) Paid holidays, (c) Shift premium, (d) Holiday pay; and (e) Paid vacation.

2. Employee Security – This includes benefits such as – (a) Retrenchment Compensation – The Industrial Disputes Act 1947, provides for the payment of compensation in case of any lay-off and retrenchment. (b) Lay-off Compensation – In case of lay-off, employees are entitled to lay off compensation at the rate equal to 50% of the total of the basic wage and dearness allowances for the period of their lay off except for weekly holidays. Lay off compensations can normally be paid up to 45 days in a year.

3. Safety and Health – To protect the employees against accidents, unhealthy working conditions and to protect the worker’s productive capacity.

4. Workmen’s Compensation – In addition of safety and health measures, provision for the payment of compensation has also been under Workmen’s Compensation Act, 1923. The Act is intended to meet the contingency of invalidity and death of a worker due to an employment injury or an occupational disease specified under the act at the sole responsibility of the employer.

5. Health Benefits – These include- (i) Sickness Benefits, (ii) Maternity Benefits, (iii) Disablement Benefits (iv) Dependent’s Benefits (v) Medical Benefits etc.

6. Voluntary Arrangements – These include providing health maintenance services, emergency cares, on the job treatment care for minor complaints, health counseling, medical supervision in rehabilitation, accident and sickness prevention, health education programs, extension of medical benefits to employee family members and retired employees.

7. Welfare and Recreational Facilities – These include – (i) Canteens, (ii) Consumer Stores/Societies, (iii) Credit Societies, (iv) Housing Facilities like staff quarters, (v) Legal Help and counseling, (vi) Employee counselling, (vii) Welfare organizations and welfare officers, (viii) Holiday homes and company guest houses, (ix) Educational Facilities for employees and their children, (x) Transportation facilities, (xi) Parties, picnics, social gatherings and celebrating festivals, (xii) Miscellaneous activities like organizing sports, cultural programs, setting up of clubs, community service activities, Leave Travel Concessions (LTCs), performance awards etc.

8. Old Age and Retirement Benefits – These include providing- (i) Employee Provident Funds (PFs), (ii) Pension Schemes, (iii) Deposit linked Insurances, (iv) Gratuity, (v) Medical benefits.

---

Types of Fringe Benefits- 16 Most Common Types: Employment Security Benefits, Health Protection Benefits, Deferred Benefits and a Few Others

Organizations provide a variety of fringe benefits.

The fringe benefits are classified under following heads as given here under:

Type # 1. Employment Security Benefits:

Benefits under this head include unemployment, insurance, technological adjustment pay, leave travel pay, overtime pay, level for negotiation, leave for maternity, leave for grievances, holidays, cost of living bonus, call-back pay, lay-off, retiring rooms, jobs to the sons/daughters of the employees and the like.

Type # 2. Health Protection Benefits:

Benefits under this head include accident insurance, disability insurance, health insurance, hospitalization, life insurance, medical care, sick benefits, sick leave, etc.

Type # 3. Old Age and Retirement Benefits:

Benefits under this category include deferred income plans, pension, gratuity, provident fund, old age assistance, old age counseling, medical benefits for retired employees, traveling concession to retired employees, jobs to sons/daughters of the deceased employee and the like.

Type # 4. Personnel Identification, Participation and Stimulation Benefits:

This category covers the following benefits – Anniversary awards, attendance bonus, canteen, cooperative credit societies, educational facilities, beauty parlor services, housing, income tax aid, counseling, quality bonus, recreational programs, stress counseling, safety measures etc.

Type # 5. Payment for Time not Worked Benefits:

Benefits under this category include – Sick leave with pay, vacation pay, paid rest and relief time, paid lunch periods, grievance time, bargaining time, travel time etc.

Type # 6. Extra Pay for Time Worked Benefits:

This category covers the benefits such as – Premium pay, incentive bonus, shift premium, old age insurance, profit sharing, unemployment compensation, Christmas bonus, Deewali or Pooja bonus, food cost subsidy, housing subsidy, recreation.

Type # 7. No-Additional-Cost Services:

These benefits are services that are provided tax-free to employees with no additional cost to the employer. They’re typically offered to employees free of charge or at a reduced rate and include the services that the employer’s line of business sells to the public. These occur frequently in industries with excess capacity services.

Examples include:

i. Transportation tickets

ii. Hotel rooms

iii. Entertainment facilities

iv. Recreation facilities.

Type # 8. Qualified Employee Discounts:

This type of fringe benefit allows an employee to obtain property or services from the employer at a price below that available to the general public. For example, many public municipalities have park districts that offer a variety of amenities to the public such as swimming pools, fitness facilities and golf courses; a qualified employee discount would allow employees to use these amenities at a lower cost.

Type # 9. Working Condition Fringe Benefits:

General rules for working condition fringe benefits include are that the Benefit must relate to the employer’s business and Employee would have been entitled to an income tax deduction if the benefit was bought as a personal expense and also that Business use must be substantiated with records. If an employee pays for property or services that qualify as a working condition benefit, the employee can deduct them from his or her individual tax income return.

Examples include:

i. Use of a company car for business

ii. Job-related education provided to an employee

iii. If the cost of an item is deductible as a business expense and is provided by the employer, it may be excluded from the employee’s wages as a working condition fringe benefit.

Type # 10. De Minimis Fringe Benefits:

These benefits include property or services, provided by an employer for an employee, with a value so minimal that accounting for it is unreasonable or administratively impractical. The value of the benefit is determined by how often it is provided.

Examples include:

i. Group meals or employee picnics

ii. Theater or sporting event tickets

iii. Office snacks and refreshments

iv. Flowers or fruit for special circumstances

v. Birthday or holiday gifts (not cash).

Type # 11. Qualified Transportation Fringe Benefits:

These include benefits an employer provides to employees for the employee’s personal transportation, such as commuting to and from work.

Examples include:

i. Commuter transportation in a commuter highway vehicle

ii. Transit passes

iii. Qualified parking

iv. Qualified bicycle commuting expenses.

Type # 12. Educational Reimbursements and Allowances:

These include payment or reimbursement for education expenses incurred during employment.

Type # 13. Qualified Moving Expense Reimbursements:

These refer to moving expenses reimbursed directly or indirectly by an employer if:

i. The individual is an employee.

ii. The employee incurs or pays the expenses.

The expenses are closely related to starting work at a new job location (generally, moving expenses incurred within one year from the date employee first reports to work at the new location).

Allowable expenses include:

i. Moving household goods and personal effects.

ii. Travel costs between the former and the new residence by the shortest and most direct route.

Type # 14. Qualified Retirement Planning Services:

If the employer maintains a qualified retirement plan, any qualified retirement planning services provided to an employee and his or her spouse may be excluded from the employee’s wages. This includes any retirement planning advice or information provided by the employer.

Type # 15. Legally Required Payments:

i. Old age, disability, health insurance (social security).

ii. Workers compensation / retrenchment compensation.

iii. Unemployment compensation.

Type # 16. Deferred Benefits:

i. Pension plans.

ii. Group life and health insurance.

iii. Child care leave, maternity leave, sick leave.

iv. Tuition aid benefits.

v. Severance pay.

---

Types of Fringe Benefits- As Put Forward by Rober H. Hoge, Dale Yoder and Paul D. Standohar: For Employment Security, and a Few Others 

Rober H. Hoge classified the fringe benefits as follows:

(a) Payment for Time Not Worked – Benefits under this category include – sick leave with pay, vacation pay, paid rest and relief time, paid lunch periods, grievance time, bargaining time, travel time, etc.

(b) Extra Pay for Time Worked – This category covers the benefits such as premium pay, incentive bonus, shift premium; old age insurance, profit-sharing, unemployment compensation, Christmas bonus, Diwali or Pooja bonus, food cost subsidy, housing subsidy, recreation, etc.

Organisations provide a variety of fringe benefits. Dale Yoder and Paul D. Standohar classified the fringe benefits under following four heads:

(i) For employment security – Benefits under this head include unemployment insurance, technological adjustment pay, leave travel pay, overtime pay level for negotiation, leave for maternity, leave for grievances, holidays, cost of living bonus, call back pay, lay off pay, retiring rooms, jobs to the sons/daughters of the employees and the like.

(ii) For health protection – Benefits under this head include accident insurance, disability insurance, health insurance, hospitalization, life insurance, medical care, sick benefits, sick leave, etc.

(iii) For old age and retirement – Benefits under this category include deferred income plans, pension, gratuity, provident fund, old age assistance, and old age counselling, medical benefits for retired employees, travelling concession to retired employee, jobs to sons/daughters of the deceased employee and the like.

(iv) For personnel identification, participation and stimulation – This category covers the following benefits – educational facilities, beauty parlour services, housing, income tax paid, counselling, quality bonus, and recreational programmes, stress counselling, safety measures, etc.

(v) Most organisations are required by law to provide social security insurance, unemployment compensation, worker’s compensation and state disability plans.

(vi) Additional benefits that employers often provide include –

a. Pay for rest periods

b. Pay for holidays

c. Pay for vacations

d. Pay for sick leaves

e. Pay for leaves of absence

f. Pension programmes

g. Capital accumulation programmes

h. Accident insurance

i. Life insurance

j. Health insurance.

(vii) Other services that many employers provide include –

a. Social and recreational events

b. Counselling

c. Cultural activities

d. Credit unions

e. Housing

f. Discount on purchases

g. Tuition fee refund for educational courses.

Current trends focus on benefits being offered on a cafeteria style. This provides the opportunity for employees to get what they want while simultaneously providing a cost-effective measure for the employer.

---

Types of Fringe Benefits: Compensation for Time not Worked, Insurance Benefits, Injury and Disability Benefits and Retirement Benefits

Nearly every organization provides fringe benefits to its employees. The range and scale of these benefits may vary in different organizations for a variety of reasons. Some benefits are mandated by laws and government regulations, while others are offered voluntarily as a part of HR strategies.

The following discussion focuses on those benefits that are generally made available to employees by most of the orga­nizations of an average size:

Type # 1. Compensation for Time not Worked:

Almost all employers provide full-time employees with some payments for time not worked—both on-the-job as well as off-the-job. On-the-job free-time payments are for lunch periods, rest periods, tea/coffee breaks, and the like. Employers also pay their employees when they are actually not at work. Some such payments are for holidays, vacations, casual leaves, medical leaves, bereavement leaves, and child-related leaves (maternity/ paternity).

Type # 2. Insurance Benefits:

Employers provide group life insurance and medical/health insurance to their employees. For group life insurance, employers pay a major part of the insurance pre­mium. Medical/health insurance may provide partial or complete coverage of medical expenses incurred by the employee and the employees family. This means either paying directly (under cashless hospitalization facility) or reimbursing the employee for hospital charges, surgery, and other personal or family medical expenses.

Type # 3. Injury and Disability Benefits:

Also called workmen’s compensation, these benefits are provided to workers who meet with accidents on the business premises, resulting in injury or disability. The workmen’s compensation system requires employers to give cash benefits, medical care, and rehabilitation services to employees within the scope of their employment. In our country, these benefits are legally mandated and regulated by the Workmen’s Compensation Act, 1923.

Type # 4. Retirement Benefits:

Most organizations provide pension, gratuity, and earned leave benefits to employees at the time of their retirement to supplement financial and social security. Pension benefits are paid under pension plans which may be totally employer-paid or joint employer- employee paid. The amount typically is a fixed monthly income for life or a variation of the lump-sum cash payment.

Even after the death of the employee, his/her family members (espe­cially the spouse of the employee) continue to receive pension under the family pension scheme. In addition to pension, organizations also provide gratuity and earned leave benefits to retiring employees. Gratuity is a reward payment for serving the organization for a long time. There is generally a ceiling on the gratuity amount. Like gratuity, the earned leave benefit amount also has a ceiling put on it.

---

Types of Fringe Benefits – 8 Major Types: Employee Welfare, Social Security, Employee Security, Payments for Time Not Worked, Health Benefits and a Few Others

There are various types of benefits which are provided to the employees and these are classified in different ways.

Broadly, these benefits are classified in the following ways:

1. Employee Welfare:

The various types of benefits offered to the employee under employee welfare scheme are within the industrial establishment, these are known as intramural and the benefits outside the industrial establishment are known as extramural. These welfare services include canteen, rest and recreational facilities, sanitary and medical facilities, arrangement for travel to and from work, and for the accommodation of workers employed at a distance from their homes.

2. Social Security:

Social security is related to the high ideals of the social security and human dignity. According to the ILO, social security is the protection provided by the society to its members through a series of public measures against the social and economic distress that otherwise would be caused by the stoppage or substantial reduction of earnings resulting from sickness, maternity, employment injury, unemployment, old age and health.

3. Employee Security:

The continuous and minimum wage or salary gives a sense of security to the employees. The Payment of Wages Act, 1936, the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 provide income security to the employees.

4. Payments for Time Not Worked:

It includes the provisions for the payment to the workers for the days not worked.

This category includes the following:

(i) Paid Holidays – According to the Factories Act, 1948 an adult worker should be paid for weekly holiday, preferably it should be Sunday or any other day.

(ii) Shift Premium – Companies which operate in second and third shifts are required to pay premium to the workers who are required to work during the odd hour’s shift.

(iii) Paid Vacation – Workers in manufacturing, mining and plantations who had worked for 240 days during the calendar year are eligible for paid vacation at the rate of one day for every 20 days worked.

(iv) Holiday Pay – The organisations sometimes offer double the normal rate of the salary to those workers who work during the holidays.

5. Health Benefits:

Various medical facilities like hospital, clinical, and dispensary facilities are provided by the organisation to the employees and their family members.

Benefits to be provided under Employees’ State Insurance Act, 1948 are the following:

(i) Maternity Benefit

(ii) Sickness Benefit

(iii) Disablement Benefit

(iv) Medical Benefit

(v) Dependent’s Benefit

6. Retirement Benefits:

The following benefits are provided at the time of retirement:

(i) Provident Fund Scheme – According to the Employees Provident Fund Act, the employers are required to contribute 8.33 per cent of wages/salaries of employees every month. Equal contribution is also required to be paid by the employees and they can contribute even more if they so desire.

(ii) Pension Scheme – Pension represents the payment of a fixed amount to the employee every month after the retirement on fulfilment of the required conditions of employment.

(iii) Gratuity – The gratuity is paid to all the employees after the termination of services by the way of retirement.

7. Compensation Benefits:

The compensation benefits are paid to the employees either according to Workmen Compensation Act, 1948 or under contractual obligation. According to the Act, the compensation is paid to the employees in case of injuries, accidents or otherwise to the worker during the course of his job performance. Under contractual obligation, an employer is liable to pay equivalent to three months, wages or salaries.

8. Voluntary Arrangements:

Most of the large organisations provide health services over and above the legal requirements to their employees free of cost by setting up clinics, hospitals, dispensaries etc.

---

Types of Fringe Benefits- Most Popular Types: Employee Security, Workmen’s Compensation, Voluntary Arrangement and a Few Others

Some of the most popular types of fringe benefits are discussed below:

1. Employee security

2. Workmen’s compensation

3. Voluntary arrangements

4. Safety and health

5. Old age benefit

6. Medical benefit

7. Welfare and recreational facilities

8. Payment for time not worked.

Type # 1. Employee Security:

Employees security is in terms of wages security or income security which is assured by Minimum Wage Act, 1948, The Payment of Wages Act, 1936 and Payment of Bonus Act, 1965. Also, the Industrial Dispute Act, 1947, providing the payment at the time of lay off and retrenchment. It also provides Payment of compensation at the rate of 50 percent of wages to workers in factories, mines and plantation. The retrenchment and closure compensations are lump sum, payments means to give some staying power to the affected workmen who have lost their jobs.

Type # 2. Workmen’s Compensation:

The Workmen’s Compensation Act, 1923 provides for payment by certain classes of employers to their workmen of compensations for injury by accident. This Act is intended to meet the contingency of death, injuries or any disability arising out in the course of employment. The law applies to certain specified categories of workers other than that employed on casual basis for purpose not connected with the employer’s trade or business.

Type # 3. Voluntary Arrangement:

These are arrangements such as setting up hospital, dispensaries, canteen, free meal and accommodation etc. by the employer.

Type # 4. Safety and Health Benefits:

Employees safety and health should be taken care of in order to protect the employees against accidents, exploitation, worker’s productive capacity, etc. For this, Fatal Accident Act, 1985 was introduced which was the first law enacted in India providing social security type of protection to the workers. The Act provides for payment of compensation to families for loss occasioned by the death of person caused by wrongful act, negligence or on the part of another person. The Factories Act, 1948, stipulated certain conditions and requirements regarding working conditions with a view to provide safe working environment.

Type # 5. Old Age Benefit:

There are the benefits provided to the employees, after retirement and during old age, with a view to create a feeling of security about the old age.

These include:

(i) Provident Fund Act:

This Act provides for the establishment of a compulsory Provident fund for certain industries and other classes of establishments specified therein. There are three schemes under this Act, namely, the employee’s Provident Fund Scheme, the Employee’s Family Pension Scheme and the Employee’s Deposit-linked Insurance Scheme.

At the time of death of a member of the Provident Fund scheme while in service, the members of his family are paid pension and insurance benefit under the Family Pension Scheme and the Deposit-linked Insurance Scheme.

Similar schemes have been introduced under certain other laws e.g., Coal Mines Workers Provident Fund, 1948, Assam Tea Plantations Provident Fund Scheme Act, 1955 and Seamen’s Provident Fund Act, 1966.

(ii) The Payment of Gratuity Act, 1972:

This Act provides for payment of gratuity to employees engaged in factories, mines, oilseeds, plantations, shops and establishments on termination of employment after completion of a minimum period of five years of service. Payment of gratuity is subject to a maximum.

Type # 6. Medical Benefit:

The employees are entitled to medical attendance and treatment either under the contributory Health Service Scheme or under the Medical Attendance and treatment rules, which provide for reimbursement of the expenditure incurred on medical attendance and treatment of employees and their family members.

(i) The Maternity Benefit Act, 1961:

This Act seeks to regulate employment of women in certain classes of establishments during certain periods before and after childbirth and provide for payment of a benefit called the maternity benefit

(ii) Employee’s State Insurance Act, 1948:

It deals comprehensively about the health benefits to be provided. It is a contributory scheme for which the employees as well as the employers make contributions. Benefits include are sickness benefit, maternity benefit, employment injury benefit, and dependent’s benefit.

Type # 7. Welfare and Recreational Facility:

Welfare and recreational benefits include:

(i) Canteens, (ii) Consumer Societies, (iii) Credit Societies, (iv) Housing, (v) Legal aid, (vi) Employee counseling, (vii) Welfare Organizations, (viii) Holiday Homes, (ix) Educational facilities, (x) Transportation, (xi) Parties and Picnic, and (xii) Miscellaneous.

It includes other benefits like organizing games, sports with awards, setting up of clubs, community service activities, Christmas or Diwali gifts, leave travel concession, productivity/Performance awards, etc.

Type # 8. Payment for Time not Worked:

This category includes:

(i) Hours of work

(ii) Paid holidays

(iii) Shift premium

(iv) Holiday pay and

(v) Paid vacation.

(i) Hours of Work – According to Factories Act, 1948, no adult worker shall be required to work in a factory for more than 48 hours in any week. Even in some organizations, the number of working hours is less than the legal requirements.

(ii) Paid Holidays – An adult worker shall have weekly paid holidays, preferably Sunday, according to the Factories Act, 1948. Some workers are even allowed to have holidays in a week. If a worker works for the whole week including Sunday, then he is eligible for compensatory holiday of the same number in the same month.

(iii) Companies operating second and third shifts pay a premium to the workers who are required to work during the odd hour’s shift.

(iv) Holiday Pay – Generally, organizations offer double the normal rate of the salary to the workers, who work during holidays.

(v) Paid Vacation – Workers in manufacturing, mining and plantation who worked for 240 days during a calendar year are eligible for paid vacation at the rate of one day for every 20 days worked in case of adult workers and the rate of one day for every 15 days worked in case of child workers.

---