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July 10, 2017

After Goods and Services Tax (GST) came into limelight, HR must work hard in terms of rethinking and bringing new guidelines that can satisfy both employee and employer.

GST is a tax reform that is expected to transform the Indian economy and catapult its growth. Its main objective is to streamline India’s complicated indirect taxes being levied by Union and State Governments. Adopting changes like these is never easy. Everyone including small and large business entities are busy in understanding GST and complying with its regime. Even the Human Resources departments are engaged in determining the impact GST has on financial benefits for their employees under various categories across the board.

Every new thing has got teething issues and so do implementing GST! Let us see some of these issues that you might face at the time of implementing this unique tax system.

Corporate gifts

In India, there is a tradition that most of the employers follow – distributing gifts among their staff on special occasions. For example, Diwali is one of the festivals where companies distribute gifts to its workforce. There are other occasions also, like birthdays, long tenure, farewell, etc. where employers gift something either in cash or kind to their employees. Now, all these varieties of gifts will come under GST.

GST needs to be paid if the gift’s worth increases beyond rupees fifty thousand for a particular financial year. So, how will it be calculated? Well, if the combined value of the gifts exceeds rupees fifty thousand, then GST will be applied on the value beyond rupees fifty thousand. However, GST will be applied on the total value of an individual gift if it is worth more than rupees fifty thousand.

So, what is an additional work for HR? HR and all the related departments need to track the value of each and every gift given to its employees in the given financial year in order to determine how much GST needs to be applied.

Company sponsored transportation and other subsidized facilities

Now a day, most of the companies provide pick-up and drop facility to its employee. If it is provided as a benefit in the employee’s contract, GST will not be applicable in such a case. On the other hand, if it is not mentioned in the employment contract, then it will be determined as a service provided by the employer to its employee, which will attract GST.

The HR people have to be on their toes with active brains to come out with new ideas in order to modify their contract with the transport vendors. The contracts can be modified to mention that the transportation services are a direct offering to the staff by the vendors and they are merely a mediator for recovering invoices on behalf of the vendors from the employees.

Subsidized or company sponsored food facility

Companies do offer food to its workforce at subsidized rates or completely sponsored. There are special occasions, such as festivals when companies offer delicious food to its employees. In such scenarios, GST has to be paid on the sum being paid to the food vendor.

However, there is a way out from it! The company can claim the credit only when it is treated as an outward supply at an open market price for its employees. There is a requirement of amendment in the existing contract where companies have to show that food is being supplied directly to the staff by the food vendors and the company is just an entity assisting in recovering the invoices from the staff.

Transactions remain unaffected by GST

There is some good news also! Besides the employer-employee transactions mentioned so far, there are some areas yet to be covered by GST. Listed below are a few transactions that are not impacted as yet by GST.

  • Medical insurance and health checkups
  • Assets provided by the company, such as computing devices, mobiles, etc.
  • Reimbursements towards mobile
  • Benefits towards relocation
  • Insurance towards personal
  • Long service award
  • Company vehicle
  • Temporary accommodation
  • Leasing of house
  • Employee referrals

Conclusion

Irrespective of the case, it is important that HR has to foresee all processes as well as all transactions that are going to be affected by GST. Also, the HR and senior management have to proactively look into other unnoticed areas to refine and streamline existing process more.

Nascent stages of introducing any new change, especially a change as radical as GST required a lot of transparency in communication and responsiveness to questions and concerns. It is important that the HR department provides communication to the stakeholders that include employees for all changes being introduced.

Impact of GST from employee employer perspective

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By HR-One Team
May 21, 2015

Every company has its own holiday and paid leaves policy. There are mandatory paid leaves for certain amount of days per year and a list of approved holidays. But sickness doesn’t give any warning before striking and more number of unpaid leaves gets added to a month while tending to the illness. With small scale businesses and start-ups redesigning the work rules, many are considering offering paid sick leaves for their employees. It has been debated quite a bit whether it’s a good idea or not, but there are numerous benefits of offering sick leaves. The best HRM software can contribute to make it a reality across organizational campuses.

The concept of paid sick leaves isn’t a common phenomenon as companies fear that employees will misuse the opportunity. Some look it as an additional cost to incur, but these cons can be dwarfed by the pros. Some of them include:

–          Employees will be healthier

When there are no paid sick leaves, employees prefer staying home only when it is physically impossible for them to leave the house. On other occasions, they come to office sick risking the safety of other employees as well. Since they don’t get sufficient rest their recovery period gets prolonged. All these issues can be tackled with offering paid sick leaves. It encourages the employees to stay home when they get sick, get ample rest and recover soon without putting colleagues at risk. Employees will stay healthier and work better.

–          Productivity will increase

The immediate result of healthier employees would be higher productivity. When the employees report to work sick, they automatically become less productive. If they are suffering from a contagious illness, others would fall sick in no time. When a bunch of people fall sick, they might eventually have to take a few days off. This results in decreased productivity, hurting the company. If paid sick leaves are offered, employees would think twice before coming in sick. Web based HRMS software can easily incorporate this offering into its functionalities.

–          Better Perception of the employees and company

You are expecting one of your biggest clients to discuss an important project.You are extremely well-prepared, your team has worked really hard for the big day and everyone is psyched about the meeting. Despite all this the only person that everybody in the room, especially your client, can focus on is the one sniffing, coughing or sneezing away who turned up because he ran out of paid leaves. As annoying as it can be, it unfortunately shows that as a company you don’t care about the well-being of your employees. It would not leave a good impression on the client/visitor that you allowed such a sick employee in the same room as him and risking his health as well. Paid sick leaves encourage employees to take a day off without worrying about salaries getting deducted and this caring attitude may put you in the good books of your clients and well as customers.

–          Employees will display honesty and loyalty

When the employees are given the option of trading a work-day with a rest day while getting paid at the same, they feel cared for and valued by their organization. Chances are that they would not misuse this opportunity and rather be honest about using the paid sick leaves.Web based HRMS software would allow them to mark their absence from the comforts of their home. Any activity that reflects care and concern for employees’ well-being would earn their loyalty as well.

–          Better employee-employer relationship

By offering paid sick leaves, the company demonstrates that it trusts its employees to not abuse that privilege and utilize the leaves appropriately. With this blend of trust, honesty and loyalty,the bond between employers and employees become stronger. When that equation is untainted it promotes a better work culture.

With benefits like these, fears and doubts associated with misuse of paid sick leaves can be put to rest. For managing these leaves some of the best HRM software can be employed. Overall, it’s a win-win situation, which is why more companies should incorporate this offering into their paid leaves/holiday calendar.

What are the benefits of offering paid sick leaves?

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By HR-One Team
September 9, 2014

Numerous individuals believe that what employees need most from their employment is more money. Obviously, you have those where money is the most critical thing. In my numerous years encounter as a Human Resources proficient, I have found there are a few different things that were more essential than money. I build this with respect to my experience and acceptance by other Human Resources experts and their encounters, as well. There are numerous articles composed that substantiate this, also.

Employees put much of their time in the spot they work and performing their occupation. They need to be known for whom they are and what it is they do. Simply being distinguished by your employee ID number does not cut it – they need more. The developers of HR One, best hr software for small businesses, enlist a few expectations employees have from their company.

Characterized Job Expectations

Employees have notable desires when they have another occupation or if extra obligations are relegated. They expect their manager//employer to furnish them with what they anticipate from them. Things, for example, the hours they are required to work, clothing regulation, to what extent are the breaks/lunch, and who the key faculty are. The employer is in charge of giving the employee a duplicate of their present place of employment depiction so they know precisely what their occupation obligations are –

Trust

On numerous events, employers converse with and treat their employees much the same as a number. They don’t demonstrate any enthusiasm toward them; its about the company. The employer anticipates that their employees will be dependable and devoted to the organization, yet normally doesn’t know who the employee is with the exception of they are a warm body doing the work. I consider how the CEO or Senior Management Team would feel being dealt with the same way. We all know the response to that one.

Perceive how administration anticipates that employees will regard them. It is exceptionally hard to show admiration to somebody who does not demonstrate any appreciation to you. Employees need to be regarded. They have to realize that they are regarded for who they are and the occupation they do. All of administration needs to get to know their employees, converse with them with deference, and let them realize that they are esteemed. They are an essential piece of the organization and they have to be told that.

Trust is a paramount part of the employee–employer relationship. Administration needs to trust its employees and reveal to them they believe them. Employees need to trust their employer. There is a suggested trust. The employer believes the employee to accomplish the employment and to do it well. The employee assumes that the employer will furnish them with the devices and training required to do their employment.

Correspondence

Your employees search for you to speak with them. They have to realize what is happening inside the organization and in their specialty. Employees need to have the capacity to talk openly, make inquiries, and make proposals realizing that they will be listened to. It is essential to them that you hear them out, as well as you hear what they are stating and will give criticism.

Holding staff gatherings in any event month to month is an extraordinary approach to keep open lines of correspondence. It is a decent thought for Senior Management to lead Employee Forums month to month. This gives the employees the chance to talk unashamedly to administration without any apprehension of countering for saying what they think or are feeling. At this point, they may need to make proposals about thoughts they may have that will profit the organization. Employee Forums are an incredible approach to keep lines of correspondence open.

Training and Growth Opportunities

It is the employer’s obligation to verify that its employees are given the essential training so they can do their jobs. Offering on location training is an added advantage for the employees. It provides for them the chance to enhance their current aptitudes or learn new ones that can improve the employment they are presently performing. Offering to send your employees to offsite workshops to comprehend what is new and applicable to the occupation is beneficial. They can put to utilize what they have learned and offer the data with different colleagues that will profit from what they have learned.

At the point when people search for work and get contracted, a large portion of them want to stay with that organization for a decent time of time. They trust that they can develop inside the organization and get advertised from inside. Employers who empower inward development and pushing from inside create positive employee assurance. Blissful employees generate a beneficial and enthralled nature.

Recognition

Most employees do the absolute best occupation they can and they take pride in their work. All they need as an exchange is to be perceived and recognized for making a decent showing. A few employers are bad at perceiving their employees or their achievements and others make an extraordinary showing with it. Employees need to realize that the commitment they make to the organization has any kind of effect. Recognition can start with trying to say thank you for an occupation well done. Show increase by having an Employee Thank You Lunch. Present your employees with a Certificate of Appreciation for making an extraordinary showing. In the event that your employee(s) do something uncommon, you can recognize them by putting it in the company bulletin.

So you see it’s not only about the money. Employees need to be locked in. They want to be an integral of the company. Be imaginative – there are bunches of things you can do. The employees simply need to realize that they are increased in value.

What employees want from their jobs?

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By HR-One Team