Organizational Responsibilities at the Time of an Employees Death
By Raj Vimalaharan, Sr. Manager Compliance – HRO – Allsec Technologies Ltd
The demise of an employee can feel like a death in the family. Whether it was a long-term illness or a sudden jolt of bad health, a colleague’s death is always tragic. For the family of the deceased, the situation is far worse. Not only have they been dealt an irrevocable blow, but for many, the death often means the loss of a sole earning member.
Understanding how to assist the deceased’s family — through the various social security norms and laws, laid down by the government — is crucial to providing help when it matters most. And with 300,000+ deaths being reported in the country today, organizations must be ready to fulfil their social responsibilities.
This article provides an in-depth analysis of the various obligations of an organization when an employee dies. It will also cut through the clutter on the various benefits the family of the departed is entitled to receive.
Governmental Codes & Conducts Covering Death Benefits
Various laws and acts have provisions for providing benefits to the family of a deceased employee. These norms are mandatory and evasion of duties is punishable by law. Major schemes and acts that govern the duties of an organization include:
The Schemes in Detail: Compounding Clauses and Comprehensive Creeds (4 – C)
PF – Pension Scheme:
This scheme provides a pension to the widows of employees who have expired before 58 years of age. The amount to be given is the eligible pension according to the post, or a minimum of ₹1000/- per month. If the member expires after obtaining a pension, then the widow will receive 50 % of the pension amount for the rest of her lifetime.
Two of the deceased’s children will also receive 25% of the widow’s pension amount individually (until they reach 25 years of age). If the employee’s spouse has also passed away, two children can receive 75% of the pension till they turn 25. When the pensioner’s children are physically challenged they will receive a pension for life.
PF- EDLI Scheme:
This scheme is one of the highlighted provisions in the Provident Fund Act because it lays down the compensation eligibility according to PF contributions.
According to it, when the employer is in an unexempted category in this scheme, and by remits, 0.5% of contribution per month, they must provide a maximum of ₹7,00,000/- and a minimum of ₹2,50,000/- to the bereaved family. Non-compliance with these norms will lead to legal action and fines.
The ESIC Act comes under the Social Security Scheme of India. It directs the State government on how to provide medical benefits to family members of deceased employees, both for public and private enterprises. It is under this act that the funeral benefits of employees are laid down. According to the ESIC Act, an amount of ₹15,000/- will be provided to the surviving member of the family who incurs the funeral expenditure.
Other types of medical expenses covered under this scheme include sick leaves, maternity benefits for female employees, disability benefits, rehabilitation benefits, and old age medicare.
Labour Welfare Fund:
This is another State Act that directs respective state governments to provide funeral benefits. Families of workers and employees classified as labourers are eligible to receive between ₹5,000/- and ₹25,000/- upon producing valid supporting documents. The amount given to the families will vary from state to state.
Watch this exclusive session with a panel of Allsec experts for an in-depth breakdown of the eligibility criteria and the schemes discussed.
The Role of A Responsible Employer
With many employees facing the brunt of the pandemic, the onus is on the employer to make sure employees are educated on the various benefits they are liable to. Spreading awareness through departmental emails, creating registers that collect information for correspondence, and updating nominee lists is the need of the hour.
It is important to also cut through the red tape when dealing with benefits. Respective departments will need to ensure that the registration, approval, and grant process is completed with minimum TAT. Making the process easier and providing quick remedies to bereaved families should be a top priority for all organizations.
How to Provide Timely Benefits
When the compliance team is given information on the death of an employee, collecting particulars on the benefits the deceased’s family can get, needs to be a priority. A curated list should be sent to the bereaved family to choose from the benefits available.
The employee’s family should then produce the necessary documents to prove eligibility for the schemes that provide monetary compensation or pensions. Help should be extended to family members who are not skilled in navigating legal requirements and norms. Making it easy for the families or nominees to get their due pensions is a duty every employer should undertake with sincerity.
At Allsec, we provide organizations with all the tools, consultation advice, and roadmap to assist families of deceased employees in the most effective manner. Our team of compliance experts simplifies the process by working round-the-clock to minimize TAT and cut through the legal web. In these dire times, the monetary assistance will serve as a ray of hope for the bereaved family, especially if the deceased is the sole earning member.
Employers must understand that it is a question of survival. For many families, there is a looming doubt of not being able to afford even basic necessities. The onus is on the employer to ensure that the employee’s family get the assistance they are entitled to. Death should not be the end of the employee-employer bond.
The watertight, yet adaptable working model designed by our team of 10+ in house lawyers, provides employers with the confidence to provide benefits without breaking any compliance laws. A true testament to our motto of Building Lasting Relationships.