Employee benefits are an essential component of any job offer. They are designed to improve employee well-being and can range from basic health insurance to retirement plans. In India, statutory benefits are mandatory for employers to provide to their employees. This article will discuss the differences between statutory and non-statutory benefits, highlight the importance of statutory benefits in India, and explore the various benefits that Indian employees are entitled to.
Table of Contents
What are statutory benefits?
Statutory benefits are crucial for employees in India as they provide a safety net and financial security in the face of various life events. These benefits are legally mandated and help ensure that employees are treated fairly by their employers.
Statutory vs. Non-Statutory Benefits
Statutory benefits are the benefits that are mandated by law and are required to be provided by employers to their employees. In contrast, non-statutory benefits are those that are not legally mandated, and are provided at the discretion of the employer. Examples of statutory benefits in India include provident fund, employee state insurance, gratuity, maternity leave, and payment of bonus. On the other hand, non-statutory benefits can include things like gym memberships, health insurance, and performance bonuses.
Statutory Benefits in a Business
Indian businesses are required to provide statutory benefits to their employees as per the applicable laws. The purpose of these benefits is to provide a sense of social security to employees and their families, and they typically include provisions for retirement, healthcare, and other contingencies. While these benefits are mandatory, they do come at a cost to the employer, and it is essential to budget for these expenses. However, the benefits of providing statutory benefits to employees, including a sense of security and stability, can lead to higher employee morale and retention rates.
Examples of Non-Statutory Benefits
Non-statutory benefits, on the other hand, are not mandatory but are provided by the employer as an additional perk. These benefits can be customized to meet the unique needs of employees and can be used as a tool for attracting and retaining top talent. Examples of non-statutory benefits include flexible work schedules, company-sponsored events, and tuition reimbursement programs. Non-statutory benefits can help employers attract and retain top talent, improving the overall work culture.
🏥 Insurance
👀 Dental and Vision
💪 Gym memberships
🩺 Health checkups
📞 Doctor tele-consultations
Statutory Benefits in India
India has a vast range of employee benefits available to workers, including statutory and non-statutory benefits. However, the sheer number of benefits can make it difficult to know what you are entitled to. In this guide, we’ll help you understand the different types of benefits available to employees in India, and dispel some common myths about these benefits.
The various statutory benefits that Indian employees are entitled to include:
- Provident Fund: This benefit requires employers to contribute a percentage of their employees’ salary to a fund that can be used for retirement or emergencies.
- Employee State Insurance: This benefit provides employees with access to medical care and financial support during times of illness or injury. It is mandatory for employers to provide employees with a health insurance.
- Gratuity: This benefit provides employees with a lump-sum payment at the time of retirement or resignation.
- Maternity Leave: This benefit requires employers to provide female employees with paid leave during pregnancy and after childbirth.
- Payment of Bonus: This benefit requires employers to pay a bonus to their employees, typically as a percentage of their salary.
Minimum wages, mandatory leave, etc can also be a part of these.
These benefits serve as a safety net for employees and provide them with financial security in case of emergencies. The eligibility criteria and requirements for each benefit are different, so it is essential to understand them.
Statutory Benefits in HR
In HR, employee benefits refer to the various non-wage compensations that are provided to employees. HR plays a critical role in administering statutory benefits in India, including ensuring that the employer is in compliance with the law and that employees receive the benefits they are entitled to. HR professionals also play a critical role in educating employees about the various benefits available to them and can provide guidance and support as needed. HR departments must understand the eligibility criteria and requirements for each benefit to ensure that the employees receive the benefits they are entitled to.
Benefits vs. Salary
While a competitive salary is essential for attracting and retaining employees, employee benefits can play an equally important role. Providing employees with a comprehensive benefits package can contribute to job satisfaction and create a sense of loyalty and commitment to the organization. Employers who offer comprehensive employee benefits packages can attract and retain top talent and improve the overall work culture.
Conclusion
In this blog post, we have discussed the importance of statutory benefits for both employers and employees in India. We have covered the definition and examples of statutory and non-statutory benefits, as well as the benefits that Indian businesses are required to provide. We have also discussed the eligibility criteria and requirements for each statutory benefit in India, along with the role of HR in administering these benefits. In addition, we have highlighted the importance of employee benefits in addition to salary and how they contribute to job satisfaction and employee retention.
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TLDR : Too Long Didn’t Read?
We understand that you might not have the time to go through the entire post, so we thought of introducting tldr to our blogs.
So what are statutory benefits? Statutory benefits are the benefits that your employer is legally required to provide to the employees. A very good example of a statutory benefit in India would be health insurance that your organisation/the esic provides you.
Non-statutory benefits are not legally-required but good-to-have benefits like gym memberships, flexible working hours, etc that help companies help and retain their employees.
