1. Benefits and Services
Md. Al-Amin (Mli)

2. Basic Factors Employee compensation Direct financial payments
All forms of pay or rewards going to employees and arising from their employment.
Direct financial payments
Pay in the form of wages, salaries, incentives, commissions, and bonuses.
Pay for performance programmes
Indirect financial payments
Pay in the form of financial benefits such as insurance.

3. Benefits
Benefits
Indirect financial and nonfinancial payments employees receive for continuing their employment with the company.

4. The Benefits Picture Today
Most full-time employees in Bangladesh receive benefits. However, they don’t always stick to the Bangladesh Labor Act 2006.
Benefit is a major expense (about one-third of wages and salaries) for employers.

5. Private-Sector Employer Compensation Costs

6. Types of Employee Benefits
Supplementary benefits
Insurance benefits
Retirement benefits
Services

7. Supplementary Benefits
Benefits for time not worked
The most costly benefit
Large amount of time off that most employees receive

8. Supplementary Benefits (cont.)
Casual leave and paid vacation
Casual leave: it is availed under section 115 of Labor Act, It is given with full wages for 10 days in a year and will not be carried forward to the succeeding year.

9. Supplementary Benefits (cont.)
Sick leave
Provides pay to an employee when he or she is out of work because of illness.
Usually up to 14 days per year
According to Section 116 of the Labour Act, 2006, no such leave shall be allowed unless a registered medical practitioner certifies the illness.
Some people misuse of sick leave
Research reveals that illness accounted for only 45% on unscheduled sick absences, family issues (27%), personal needs (13%), and a mentality of entitlement (9%).
Research also reveals that the average cost of absenteeism per employee per year was $789

10. Supplementary Benefits (cont.)
Leave Cost Reduction Tactics
Repurchase unused sick leave at the end of the year by paying their employees a sum for each sick leave day not used
Holding monthly lotteries in which employees with perfect attendance are eligible for a cash prize

11. Supplementary Benefits (cont.)
Maternity Leave
Women workers are eligible for parental leave during the period of pregnancy
At present the women workers account for one-fourth, that is 12.1 million, of the total labor force of 49.5 million in Bangladesh.
Section 46 of the Labor Act provisions have been made for maternity leave of 16 weeks (8 weeks before and 8 weeks after the delivery).
It has also made the provision that this benefit shall only be available to workers who have served under the owner for a minimum period of 6-months prior to the notice of the probability of the delivery.

12. Supplementary Benefits (cont.)
Annual Leave
Section 117 of Labour Act, 2006 deals with annual leave.
Normally, a worker, who completes one year of continuous service in an establishment, are allowed during the subsequent period of twelve months leave with Wages for a number of days calculated at a certain rate.
in case of a shop or commercial or industrial establishment or factory or road transport service, for every eighteen days of work
In the case of tea plantation, for every twenty two days of work;
In case of a newspaper worker, for every eleven days of work performed by him during the previous period of twelve months.

13. Supplementary Benefits (cont.)
Festival Leave
Section 118 of the Bangladesh Labour Act, 2006 prescribes that every worker shall be allowed in a calendar year eleven days of paid festival holidays. The days and dates for such festivals shall be fixed by the employer in such manner as may be prescribed.

14. Supplementary Benefits (cont.)
Severance pay
A one-time payment when terminating an employee.
According to Bangladesh Labor Act 2006, employee should be paid one month’s salary in advance.
Reasons for granting severance pay:
Acts as a humanitarian gesture and good public relations.
Mirrors employee’s one month quit notice.
Avoids litigation from disgruntled former employees.

15. Insurance Benefits Workers’ compensation
Labor Act 2006, 150- Employer’s Liability for compensation : (1) If personal injury is caused to a worker by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this chapter.
Specific loss injuries: statutory list of losses
Exception- in respect of any injury which does not result in the total or partial disablement of the worker for a period exceeding three days

16. Insurance Benefits Workers’ compensation
Death or disability: a cash benefit based on earnings per month of employment.
the worker having been at the time thereof under the influence of drink or drugs,
or the wilful disobedience of the worker to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of worker,
or the wilful removal or disregard by the worker of any safety guard or other
device which he knew to have been provided for the purpose of securing the safety or worker.

17. Insurance Benefits Controlling worker compensation costs
Screen out accident-prone workers.
Train up people.
Make the workplace safer.
Thoroughly investigate accident claims.

18. Insurance Benefits (cont.)
Hospitalization, health, and disability insurance
Health insurance looms large in many people’s choice of employer, because it is so expensive.
75% of the employees in one recent survey called it their most important benefit
Provide for loss of income protection and group-rate coverage of basic and major medical expenses for off-the-job accidents and illnesses.
Accidental death and dismemberment
Disability insurance

19. Retirement Benefits (cont.)
Pension plans – They are financial programs that provide income to individual employees in their retirement
Types
Contributory: employees contribute to the plan.
Noncontributory plans: employer makes all contributions to the plan.
Qualified plans: plans that meet requirements for tax benefits for employer contributions.
Nonqualified plans: plans not meeting requirements for favorable tax treatment.

20. Provident Fund (PF)
This is a special retirement saving scheme sponsored by the employer which allows an employee to save certain percentage (5%-10%) out of their basic income every month. The saving will be matched by the employer with 100% contribution.
The total savings will be due to the employee upon his/her retirement or resignation or termination.
** Sometimes employer doesn’t pay his or her portion of PF contribution during termination, only employee’s contribution is paid back.
For instance, the employee contribution is TK 500 per month, the employer would also contribute TK 500 per month. The total contribution to PF would be:
(Employee’s TK 500+ Employer’s TK 500)= Contribution to PF is TK 1,000

21. Provident Fund (cont’d)
PF Calculation
Total Salary TK. 70,000
Basic TK 40,000
House Rent TK 20,000
Telephone TK 2,000
Medical TK 5,000
Miscellaneous TK 3,000
Provident 5% of Basic
Employee’s contribution (5% of 40,000) = TK 2,000
Employer’s contribution (5% of 40,000) = TK 2,000
Total contribution to PF per month = Tk 4,000
Total contribution to PF (TK. 4000*12) = Tk 48,000

22. Provident Fund (cont’d)
Assuming that the employee gets an increment of 10% every year over his/her basic salary.
Year
Basic Salary (TK.)
Employee’s Contribution (5%)
(TK)
Employer’s Contribution (5%)
PF/ Month
PF /
1st
40,000
2000
=4000
12*4000= 48,000
2nd
(10 increase)
44,000
2200 =
4400
4400*12= 52800
3rd
(10% increase)
48,400
2420 =
4840
4840*12= 58080

23. Provident Fund (cont’d)
If you have served for an unbroken period with clean record, then you will get employer’s contribution. For example, if you have served for more tan or equal to 5 years, you are entitled for the entire amount of employer’s contribution. Usually, there is a schedule that organization follows. It is given below:
Vested Schedule:
Q: After 3rd year, the employee decides to quit. How much PF s/he will get?
No. of years served
Proportion of employer’s contribution
5 years and above
100% match
4 years
80% match
3 years
60% match
2 years
20% match
Less than 2 years
0% match

24. Provident Fund (cont’d)
Year
Basic Salary (TK)
Employee’s Contribution
(5%) (TK)
Total (TK)
Employer’s Contribution (5%)
(TK)
Employer’s Contribution Total (TK)
1st
40,000
2000
2000*2= 24,000
2nd
(10 increase)
44,000
2200
2200*12=
26400
3rd
(10% increase)
48,400
2420
2420*12= 29040
Total
79440
Now, as schedule, for PF calculation after 3rd year, employee would get his entire contribution and employer will pay 60%.
Hence, PF would be: TK 79,440+ (60% of TK 79,440) = Tk. 127,104
Employers usually put the money in the banks and get returns. For example, a big company like Beximco can pool the money received from employees for PF and invest/ save that in the banks to earn returns.

25. Gratuity
It is a onetime lump-sump payment given to the employees on the last day of their employment as a gift of their valuable service to the organization. Usually, employees are eligible between 5 to 10 years of continuous employment. It is one of the retirement benefits offered by the employer to the employee upon leaving his/her job.
If an employee quits after 10 years:
Gratuity amount= (5*5th year’s basic salary) + (5*10th year’s basic salary)
If an employee quits after 8 years:
Gratuity amount = (5*5th year’s basic salary) + (3*8th year’s basic salary)
If an employee quits after 20 years:
Gratuity amount: (5*5th year’s basic salary) + (5*20th year’s basic salary)
** If the employee leaves before 5 years of service, he is not entitled for gratuity.

26. Personal Services Employee assistance programs (EAPs)
Provide counseling and advisory services:
Personal legal and financial services
Child and elder care referrals
Adoption assistance
Mental health counseling
Life event planning

27. Family-Friendly (Work-Life) Benefits
Subsidized Child Care
Most working people make private provisions to take care of their children
Employers who want to reduce the distraction associated with finding reliable child care can help various ways
Labor Act 2006, Section 94- Rooms for children : In every establishment, wherein forty or more workers are ordinarily employed, thee shall be provided and maintained a suitable room or rooms for the use of children under the age of six years of such women.
Company sponsored and subsidized day care facilities can attract employees, reduce absenteeism, reduce turnover rate and increase productivity of the employees.

28. Family-Friendly (Work-Life) Benefits
Sick Child benefits
Bangladesh Labour Law Act 2006 doesn’t cover this benefit. However, contemporary organizations are concerned with that.
What would you do when your children are sick and you need to get to work?
You are less likely to turn up. If you turn up, you performance level might not meet the requirements
Study shows that unexpected absences climbed to about 2.4% and children sickness is one of the major reasons
Today, more organizations are offering sick children benefits along with regular children benefits

29. Family-Friendly (Work-Life) Benefits
Elder Care
Bangladesh Labour Law Act 2006 doesn’t cover this benefit as well. However, contemporary organizations are concerned with that.
The responsibility for caring an aging relative can effect employees’ performance at work
Study shows to care for an older relative, 64% of the employees took sick leave or vacation time, 33% decreased work hours, 22% took leaves of absence, 22% changed their job status from full- to part-time, 16% quit their jobs and 13% retired jobs
So, it is strategic imperative that employers provide elder care services

30. “To win in the marketplace you must first win in the workplace
. “To win in the marketplace you must first win in the workplace.” – Doug Conant, CEO of Campbell’s Soup

31. Thank you!