EMPLOYEE BENEFITS

Chapter

11

Benefits (Indirect Financial Compensation)

All financial rewards that are not paid directly to the employee
Rewards that employees receive for being members of the organization and for their positions in the organization

Objectives of Benefits Programs

Improve employee work satisfaction Meet employee health and security requirements Attract and motivate employees Reduce turnover Maintain a favorable competitive position To meet legal requirements

Types of Employee Benefits

Required By Law (Statutory benefits)
SOCSO (private sector) (Insurance benefits) EPF (private sector) (retirement benefits) Payment for time not worked - public holiday - annual leave - sick leave - maternity leave

Discretionary (Voluntary)
Health care (medical/dental)
Payment for time not worked - Paternity leave - Marriage leave - Compassionate leave - Study leave etc Other optional benefits - Loans (house/car) -Tuition fee reimbursement - Family-friendly benefits

Under the Act, an employees earning less than RM3,000 must compulsorily contribute to SOCSO.
Employees Earning More than RM3,000 and who had not previously registered or paid contributions to SOCSO are given an option to be covered under the Act. Categories of employees exempted from SOCSO's coverage: Government employees Domestic servants Self-employed Foreign workers Rate of contribution: Business owner
Employer: 1.75%
Employee: 0.50% monthly salary

of the employees

COVERAGE
1) Accidents which occur while in the course of the work. 2) Accidents which occur while traveling On a route between his place of residence and his place of work. On a route between his place of work and the place where he takes his meal during any authorized recess. On a journey made for any reason which is directly connected to his employment. 3) Accident during an emergency Accident which occurs during an emergency at the employer's premises while in the course of assisting, rescuing, or protecting other people from disasters (such as a fire breakout). 4) Occupational Disease Disease that results from his occupation. Examples: Loss of hearing due to exposure to continuous excessive noise. Respiratory diseases

Employee Provident Fund (EPF)

EPF Act 1991 it is compulsory for all employees and employers in the private sector to contribute towards the fund and continue to do so until they are 55.
Employees contribution

At least 11% of monthly salary

Employers contribution

At least 12% of monthly salary

Pay for Time Not Worked

Public holidays
All employees are entitled to 10 paid Public Holidays (PHs) per year (as declared by Federal Government or/and State Government)
Compulsory PHs: National Day, Kings Birthday, Birthday of Sultan or Head of State Workers Day (labor day)

The other 6 days will be chosen by the employers

Pay for Time Not Worked Sick leave

Employees are entitled to sick leave if they have a statement (MC) from a doctor certifying them unfit for work. No. of years service Less than 2 years 2 - 5 years more than 5 years No. of days leave per year 14 18 22

If an employee is hospitalized, he/she is entitled to leave for up to 60 days per year.

Pay Annual leave for

Time Not Worked

Employees are entitled to take paid annual leave each year. Amount increases with years of service. Minimum paid annual leave as set by the Employment Act:
Years of service Less than 2 25 More than 5 No. of days leave 8 12 16

Maternity leave
Every female employee is entitled to at least 60 consecutive

days of paid maternity leave in respect of each confinement.

Up to 5 children

Discretionary (Voluntary) Benefits

Health benefits medical treatment On-site health care dental care Vision care Payment for time not worked Paternity leave Leave for educational purposes Marriage leave Tuition reimbursement programs Special treats: e.g. annual dinner, family day Food coupons, subsidized cafeterias Transportation Low interest loans (car / house) Uniforms and safety clothing Staff purchase discounts Sports and recreational facilities Legal Services Financial Planning Relocation benefits

Work/Life Benefits: Balancing Work and Home Needs

Time off for childrens school activities

Employer-paid on-site or near-site child care facilities

Subsidized childcare costs (partial funding) Health club and wellness programs Subsidized temporary or emergency dependent care costs Extended leave policies for child/elder care

Educational reimbursement
Sick-child programs (caregiver on call) Work-at-home arrangements/telecommuting

Flexible work hours scheduling

Requirements for a Sound Benefits Program

Allowing for Employee Involvement Providing for Flexibility Benefits for a Diverse Workforce

Benefits for a diverse workforce

With the increasing diversity of todays workforce, there

really is no such thing as a typical employee

preference of benefits on factors such as
Gender
Age Marital status

A workforce that is far from being homogeneous bases

Number of dependents
Years of service Job title

Providing for Flexibility

Flexible benefit plans (cafeteria plans)
Benefit plan that allows employees to select from a wide range of options how their direct compensation and benefits will be distributed
Allow employees to select benefits most appropriate to

their individual needs and lifestyles

Provide a menu or choice of benefits for employees to

select from

Benefits Issues

Communicating Information about Benefits Package

Workers need to fully understand benefits that are provided them

Ways to communicate:
In-house publications (employee handbooks/newsletters) Group meeting and training classes

Audiocassettes/videotapes
Bulletin boards Payroll inserts messages

Specialty brochures
Employee self-service systems (ESS) Poster, Visual Presentations (e.g. slide shows etc)

Benefits hotline (to answer questions related to EBs)

Intranet