How to build Employee benefits compliance policy

Building a salary and bonus policy is an important task for businesses. An effective salary policy will directly affect the productivity and work performance of all employees. Let's learn with Faro Vietnam how to build Employee benefits compliance policy through the article below!

1. What is a salary and bonus policy?

A salary and bonus policy is an important document regulated by the business on issues related to salaries, bonuses, social benefits, benefits such as bonuses, allowances, hardship support, etc. for employees working in the company. This is an important and indispensable regulation in the human resources policy of the business.

Based on that, the business can establish a salary calculation method, choose a suitable salary payment method and payment period for employees (Non-discrimination in benefits).

• Salary is the amount of money that the employer commits to pay to the employee according to the agreement, including basic salary according to the job or position, allowances, and other additional payments.
• A bonus is an amount of money, property or other form that the employer rewards employees based on the results of production and business activities or the level of completion of their work.

HR Compliance Through the Employee Lifecycle

2. The purpose of building a salary and bonus policy of the enterprise

Building a salary and bonus policy for employees has the following purposes:

• Ensuring a stable life for employees, helping them feel secure at work and meeting basic needs in life with Employee wellness program regulations.
• Salary and bonus are always the top concern of employees. Enterprises with attractive salary and bonus policies will increase competition, attract and retain high-quality talent.
• Create motivation and encouragement for employees to complete their work well according to their titles, while actively contributing to the completion of the company's production and business goals.
• Develop clear regulations on the benefits that employees are entitled to when becoming official employees of the company.
• Fully comply with labor laws including salary, bonus, Retirement plan regulations and Paid time off (PTO) compliance policies. The salary and bonus regulations help businesses strictly control payments, budgets, and optimize resource use to ensure proper implementation of business goals.

3. Basis for developing salary and bonus regulations for employees

Aspects for developing salary and bonus regulations and allowances suitable for employees include:

3.1 Compliance with current legal regulations

Salary and bonus regulations and allowances for employees must be developed and applied in accordance with current legal regulations, ensuring the rights of employees. Factors that need to be complied with include:

• Regulations on employee rights, minimum wages, salary payment terms.
• Obligations such as personal income tax deduction, corporate tax and other relevant regulations.
• Non-discrimination in benefits
• Legal basis: Labor Law 2019 and Enterprise Law 2020.
• Decree 145/2020/ND-CP: Detailed guidance of the Labor Code on working conditions and labor relations.

In addition, businesses need to consider actual conditions such as charter, organizational regulations, business lines and specific factors of the business to establish appropriate policies.

3.2 In line with the business strategy and mission

The compensation policy should reflect the sustainable policy, development strategy and financial capacity of the business. This helps ensure sustainability and support the long-term goals of the business.

Compensation should be linked to the core values and strategic goals set out. In addition, it is necessary to ensure a balance between work motivation and the financial situation of the business.

3.3 Based on position and job title

The compensation policy for employees should be based on:

• Job description and analysis.
• Qualifications, skills, responsibilities and contribution levels for each position.

This ensures appropriate salaries, motivating employees in different positions.
 

Human resource compliance - The Essentials of Employee Benefits Compliance 

3.4 Evaluate labor performance

Fair assessment based on performance and completed work results. The compensation policy should be built on clear criteria for measuring work performance. Apply transparent rewards and penalties to encourage employees to work and maximize their capacity.

4. Process of developing a salary and bonus policy for employees

To implement a salary and bonus policy smoothly, businesses need to follow these steps.

Step 1: Evaluate the current salary and bonus policy
Collect all information about the salary and bonus policy currently applied at the business.
Evaluate the level of Equity compensation plan compliance and competitiveness in the labor market and the current financial capacity of the company.

Step 2: Analyze job requirements by position
Clearly define the tasks, skills, qualifications and experience for each position or title. Based on that, set up a suitable basic salary and bonus regime, ensuring fairness, transparency and encouraging work performance.

Step 3: Develop goals and evaluation criteria
Set up specific goals and criteria to evaluate work performance such as:

• Completing KPIs.
• Contributing according to expertise and creativity.
• Teamwork ability and work attitude.

Step 4: Design detailed salary and bonus regulations

Build a salary and bonus system including:

• Basic salary.
• Allowances (gasoline, business expenses, birthdays, etc.).
• Performance bonuses and special rewards.
• Health insurance requirements
• Family and medical leave laws

Step 5: Measure, evaluate and improve salary and bonus regulations

After implementation, the enterprise needs to continuously measure the effectiveness of the salary and bonus regulations. Then evaluate the level of meeting human resource needs and suitability with the financial situation of the enterprise. Adjust the flexible benefits plan compliance to maintain transparency, fairness and long-term implementation.

Hopefully, the information Faro Vietnam has shared above will help administrators more easily build effective salary and bonus regulations! To save time, costs and improve efficiency, using Faro Vietnam service of Compliance with ERISA (Employee Retirement Income Security Act) will bring many benefits to businesses. Contact Faro Vietnam for more detailed advice!

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