Conceptual Frame Work of Fringe Benefits and Social Security

Conceptual Frame Work of Fringe Benefits and Social Security



Fringe benefits constitute a major part of employee’s total compensation package. Direct wage and salary payments are only a part of the total compensation package. The rest represents employee benefits. In general, these are not directly related to the productive efforts of employees, but are available to all regardless of the quantity or quality of their individual work output. Fringe benefits are tangible benefits, which the employees of an organisation received from their employer in addition to the monetary wages and salary.

One of the Regional Chairman of the National War Labour Board in the U.S.A. coined the term “Fringe benefits” in 1943. The term did not come into use until 1950s. ‘Fringe’ has assumed many varied meanings because of its complexities. According to some industrial relations practitioners, the term “fringe” denotes higher labour cost without additional production. To others, like Michel, fringe means “Procedures adopted to provide supplementary compensation which is over and above the agreed upon wage or salary rate and for which no additional productivity is required.

According to Webster Dictionary, fringe means “an ornamental border…….. an edging, trimming or a margin”. Fringe, in summary, is a “fancy trimming”. To the workers, public or private enterprises, the fringe payment has evolved from such an ornamental, incidental trimming to a bonafide part of their income. According to Encyclopaedia Britannica (2003), the term ‘fringe’ means an ornamental boarder, edge, brink, brim, hem, margin, periphery, verge, perimeter, skirt etc.

Wage supplements, welfare expenses, non-wage labour cost, sub-wages, hidden payroll, supplementary compensation, transpecuniary incentive perquisites other than wages, employee welfare, social charges, perk and extra-wages are popular synonyms for the term.

Employee received compensation as a regard for...

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