Work from home: Employee benefits set for overhaul as companies redraft rules2 min read . Updated: 17 May 2020, 06:43 PM IST
- Work from home mandates has meant that companies are beginning to discuss the implications of the model on a long term basis.
Mumbai: Companies are taking a relook at employee benefits and employer liabilities as a majority of their staff work from home amid the lockdown. Human resource consultancy firms say companies are increasingly trying to understand how liabilities change for them going forward, as a vast workforce remains at home.
"Leave policies in terms of number of official/national holidays, hours of work, overtime calculation and maternity benefits etc. differ from state to state," says Rishi Agrawal, CEO, Avantis Regtech, adding that work from home mandates has meant that companies are beginning to discuss the implications of the model on a long term basis.
Many companies have asked their employees to work from home till August. In case of IT companies, TCS or Tata Consultancy Services has already communicated to 75% of its workforce that the company would move to work from home permanently by 2025. IT industry body Nasscom has said the industry must take a phased approach with 15-20% workforce initially till June-July.
For an IT company, 60-65% spend on employees is in the form of maintaining premises, conveyance, canteen and other amenities as part of their fixed costs and when employees work from home that cost is immediately saved. Companies also compensate employees based on the city where they are located because staying in larger cities is expensive. So in long term work from home there will be a need to restructure the salary components as well to balance company costs as well as afford better talent remotely.
"As personal space merges into professional, work hours have stretched and employees are unable to switch off mentally and emotionally. This will impact physical and mental well-being. So companies are beginning to re-think their insurance policies, leave policies and salary structures etc." said a director from an HR consulting firm.
Many companies are also defining work from home hours, emailing hours and calling hours so employees get mental and emotional space, the director said.
Companies will also be dealing with cultural clashes in terms of how much leaves team members can avail based on their work locations. If a person is injured while on official duty, there are rules for compensation but how do you classify an accident when someone for example is working from home but was injured while buying groceries? Basically the labour laws have to accommodate job roles of remote workers and their work hours.
"In labour laws it is assumed that the employer and employee meet at a location based on which the wage laws are applicable. But if part of the workforce is working from different locations as a permanent arrangement, companies will need to figure out where they need to register for a professional tax, labour welfare fund among others which are state subjects, especially if they don't have a presence in that state," said Agarwal.