Employers and employees typically focus on gross pay as a critical portion of compensation. Total compensation includes much more than gross salary, with mandatory, statutory, and non-statutory benefits under consideration as well. These packages give employees significant reassurance when working with an employer. However, it is essential for employees to be clear about entitlement to certain benefits, and which employers offer also. There are two key types of benefits, statutory or mandatory benefits, and non-statutory benefits.
Statutory benefits are offered by employers to employees. Within this category of benefits, there are mandatory benefits that are legally required by law. In essence, statutory benefits and mandatory benefits are the same. These benefits include the following: –
Benefits offered also depend on whether the organization is government-owned or private. Having a wide range of benefits means that some complexity may be outside of the purview of the HR team. In this case, it is wise for companies to choose to outsource the administration of statutory benefits
These are benefits that are offered by the employer, but they are not required by law. The full discretion of the employer determines these benefits. Examples of statutory benefits include: –
HR workers need to ensure that they are clear about changing rules from one state to another, mainly when serving a company that may have various branches. Furthermore, the base rates of these benefits may be adjusted on an annual basis. If an organization makes errors while planning and making payments on statutory benefits, they may face steep government penalties.
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