Features of Fringe Benefits


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Features of Fringe Benefits:

  1. Different from regular wages:

Fringe benefits are different from regular wages such benefits are those payments which an employee enjoys in addition to wages receives. It is a supplementary payment and provides support to an employee.

  1. Provided for employee motivation:

Fringe benefits are not given to employees for performing certain jobs but are offered to encourage them to take more interest in work assigned. Such benefits motivate employees and raise their morale. They make the job in the organization more interesting, attractive and lively due to added purchasing power.

3.      Useful but avoidable expenditure:

Fringe benefits constitute a labour cost for employer. It is a useful expenditure but also an avoidable one as compared to wage which must be paid regularly.

4.      Not directly linked with efforts:

Fringe benefit is not a direct reward for the efforts made or the production given by an employee. It is given on the basis of considerations such as length of service, sickness and the hazards of life which he encounters. Such benefits are offered as and when required and not regularly like wages.

5.      Beneficial to all employees:

Fringe benefit is a labour cost but its benefit should be made available to the entire labour force and not to a small group of employees Fringe benefit should be made available to all employees. For example, subsidized canteen facility is a fringe benefit but subsidizing non-vegetarian “thali” need not be treated as a fringe benefit as it is available only to vegetarian employees.

 

 


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