What Are Employee Benefits?
Employee benefits are extra perks and benefits that employers give their staff members in addition to the base pay. Depending on the employer and corporate policies, these additional benefits may be monetary or non-monetary.
The labor laws of Mauritius ensure that workers receive supplementary benefits like health insurance, minimum salaries, paid time off, retirement savings, maternity leaves, etc. Because of this, businesses everywhere in Mauritius adhere to these requirements to show gratification to employees, ensure employee happiness, and prevent fines and legal issues.
Employee incentives are ultimately advantageous to both businesses and employees. Employers can maintain a happy team and considerably lower the turnover rate by providing perks on par with the industry. On the other hand, when businesses support their employees’ professional growth, employees feel appreciated.
If you are planning to set up your business in Mauritius, you must understand the prevailing employee benefits in Mauritius. Only when you have a complete understanding will you be able to draft a comprehensive benefits policy for all your employees.
The following post outlines everything you need to know about Mauritius’s compensation and benefits policy.
Compensation Laws in Mauritius
The country’s prevailing labor laws directly impact the compensation and benefits policy in Mauritius. These laws regulate all the aspects of employee benefits in Mauritius.
- The National minimum wage regulation 2017 regulates the basic wage for all employees. All employers in Mauritius must pay at least the minimum wage to all their employees.
- As per the Worker’s Act 2019, the employees who remain employed in a company for a year and if they are working for the company on 31st December are entitled to an annual bonus. As per Section 45, the amount on the premium will be equivalent to 1/12th of the yearly salary.
- The Worker’s Act 2019 has introduced the Portable Retirement Gratuity Fund for all employees. The gratuity payment has become a part of the pensions paid to the employees under this act. Also, an employee is allowed to take the information about their job benefits, including retirement benefits or pensions, to their next workplace.
- According to the New Workers’ Rights Act, 2019, a wage guarantee fund has been established by legislation to compensate employees who lose their jobs due to a plant closing. Benefits will be provided to workers from Bangladesh and Nepal in addition to the workers of Mauritius.
- Under section 3 and section 13 of the Constitution of Mauritius, the employees have the Right to Association. This act allows all the employees to join any kind of trade union if they want to bring any changes to the compensation policy of the country. The employer cannot stop the employees from joining any trade union.
Employment contracts in Mauritius
In Mauritius, it is mandatory to have a written contract in place. The contract must contain the duration of the agreement in case of fixed-term contracts, the skills required to carry out the job, and the kind of work the employee is expected to do during the tenure of employment. These conditions are necessary for an employment contract to exist, especially in the case of fixed-term employment contracts.
Employers must have an overview of the different types of employment contracts issued to other kinds of employees in Mauritius:
Contracts of indeterminate duration
These contracts are usually called indefinite contracts. The indefinite contract exists between the employer and the employee when there is no fixed date on which the contract will expire. Here, the employer assumes that the employee will indefinitely work for the organization. However, both the employer and employee can terminate the contract anytime. In the case of the employer, if the company fires the employee with justification, the contract gets terminated. Conversely, if the employee resigns, the contract gets terminated. In both cases, the employer and employee must follow the mandated procedures laid down by the labor law in Mauritius.
Contracts of determinate duration
Also known as fixed-term contracts, the employer and the employee come together and decide a specific duration for the employment. The employee is expected to perform a set of duties for a fixed term; hence, the tasks are non-recurring. Employers can hire different types of employees for a fixed period. These include:
- Seasonal employees
- Employees are hired temporarily until a position is filled permanently
- Employees holding a particular contract
The labor laws of Mauritius have laid down several guidelines for drafting an employee compensation structure in Mauritius. These guidelines are:
From 2020, the minimum compensation to pay employees in Mauritius has been raised. The minimum wage for export staff is 9000 Mauritius rupees, and the non-export staff should be paid 9700 Mauritius rupees.
Fixed working hours
The employees in Mauritius are required to work for 45 hours every week. That translates to 9 hours per day, five days a week, or 8 hours per day, six days a week. A different mechanism can work between the employer and the employee, where they mutually decide the working hours. Any hours worked beyond that are considered overtime.
Employees hired in Mauritius are liable for several leaves, including annual leaves, sick leaves, and public holidays. In addition, female employees are entitled to maternity leave. Male employees whose spouse is about to give birth can also use paternity leave.
National pension and savings contribution
Employees and employers must contribute to the National Savings Fund and National Pension Fund.
Under the labor laws of Mauritius, employers cannot distinguish between the employees based on the nature of their employment contracts. Both part-time and full-time employees should be treated fairly and equally. Agreements for both these types of employees should be designed similarly except for the part about employment duration. Also, if there are any vacancies in the company, the part-time employees must be given preference in filling the full-time position.
However, there can be a difference in overtime payment for permanent and part-time employees. This happens only when the total hours worked by the part-time employee are less than those paid by the full-time employees working at a similar position.
How to Design an Employee Benefits Program for Employees in Mauritius?
Designing an employee benefit program can be challenging for employers. The employee benefits program is vital in determining total compensation costs; hence, the program must be designed efficiently.
If you want to build a good employee benefits program, you must understand the needs of the employees and the kind of challenges they might face in the workplace. However, you cannot just keep employees’ welfare in perspective. You will also have to understand your budget and the money you can allocate to a benefits program.
To create the best compensation package in Mauritius, you need to take the following steps:
Step 1: Define clear goals
The first step while designing a benefits program is to list clear objectives. This will help you understand the company’s goals and how you can meet the employee needs in alignment with the company’s objectives. You must consider factors including the employer size, type of industry, business location, and collective bargaining agreement while identifying benefit objectives.
Some businesses opt for broad benefits objectives, while others include the goals in their approach to total pay. The benefits objectives should be reviewed and updated to reflect the current employer strategy and workforce demands because they are not static.
Now that you have started to design the employee benefits program in line with the employee compensation policy in Mauritius, you must define a budget based on which you need to set aside the required funds for employee benefits.
Once you have a budget, you must chalk out the benefits you want to provide to the employees. Listed below are some goals that will give direction to your employee benefits program:
- Attracting new and retaining existing employees
- Working within the allocated budget
- Offering unique benefits
- Complying with all the labor laws set by the federal and state governments
Step 2: Know the industry standards and employee needs
Although businesses having the right budgets is an important factor, if the benefits you provide are do not align with what other companies offer, your employees will be dissatisfied. Before you define an employee benefits program for your employees, you must conduct thorough research to understand the prevailing industry standards and how other companies have designed their employee benefits programs.
Additionally, an internal survey will help you understand the employees’ needs and what they expect from the benefits program. The survey can help you know what kind of employee compensation and benefits Mauritius employees want so their needs are fulfilled and what can help you lure in a better set of talent as compared to your competitors. If a benefit plan exists, it will help comprehend how frequently employees use a particular plan and how these plans benefit employees. This allows employers to cut costs on programs that don’t benefit employees.
Once you gather this data, you can devise a remuneration strategy that meets the needs of both existing and new employees. You can use the collected data to understand the variations compared to the industry standards and fix the loopholes.
Step 3: Come up with a flexible compensation package
Now that you have gathered sufficient data from competitor analysis and internal surveys, you can start designing a framework for workers’ compensation in Mauritius.
The employee benefits package should be designed in such a way that it takes care of the different needs of the employees. From the suggested structure in the remuneration package, employees can choose the extra benefits they want. A cost-effective pay strategy would also minimize underused benefits while guaranteeing each employee access to the relevant benefits.
Step 4: Communicate the plan
A carefully thought-out compensation scheme depends on open communication. Employers should review the policy’s structure and components with all current and new employees to get their opinion. They must consider the workable proposals and keep lines of communication open with the staff to involve them in the planning process. This straightforward approach will increase their employees’ trust, loyalty, and respect.
Step 5: Assess the benefits package that you have generated
Businesses operate in dynamic environments; hence, the business climate and economy can impact the benefits program. You must evaluate the benefits package to determine its efficiency and applicability in different scenarios. You must also assess the program’s aspects before implementing it so that the plan is error-free. You can set clear metrics to understand if the benefits program works efficiently for the employees and then take corrective measures if required.
Types of Guaranteed Benefits in Mauritius
Some of the guaranteed employee benefits in Mauritius include the following:
- In Mauritius, a full-time employee who works in an export company is entitled to a minimum wage of MUR 9,875. However, this increases to MUR 10,575 if the employee works in any other industry.
- Mauritius follows a different mechanism to calculate the minimum wage for a part-time employee. You can calculate the minimum wage a part-time worker in the export industry is entitled to as (10,575/A x hours worked in a month x 1.10). Here, ‘A’ stands for the number of hours worked in a week x 52/12
- The employer and employee can mutually decide the working hours in Mauritius. However, employees must work a minimum of 45 hours a week.
- The companies can go with 9 hours a day on any five days a week. If the employee has to work for six days, the company can ask for 8 hours of work on any five days and 5 hours on one other day (except public holidays).
- The contract between the employer and employee will determine whether or not an employee receives additional compensation for working overtime under Mauritius labor regulations. But if the business doesn’t offer any special overtime pay, they must factor it into the worker’s monthly income.
- The additional hour’s standard compensation is at 1.5 times the regular hours. Similarly, an extra hour during a public holiday is paid twice the rate of a normal hour.
- Moreover, employers must give 24 hours’ notice before overtime work starts.
Paid time off:
Employees who have worked for at least a year are eligible for the annual leaves, and the conditions driving it are:
- Twenty days of annual leave plus an extra two days of leave.
- If the employer and employee have contractually agreed to it, the employer must reimburse the employee for any unused annual leave. However, they may require employees to use half of their yearly holiday.
- An employee can use up to 15 days of sick time annually. They may accumulate these leaves for a maximum of 90 days.
- When an employee is absent due to health concerns or illness for three consecutive days, the employer may send a doctor to check that person’s health. The employee may face disciplinary measures following the law if any contradictions are discovered in such a circumstance.
- The female employees are entitled to 14 weeks of fully-paid maternity leaves. They can use seven weeks of leaves before confinement and the remaining after the confinement.
- The employee also gets an allowance of MUR 3,000 if the employee is at least a year old in the company. The amount is disbursed once the medical certificates are verified.
- Additionally, an employee can take up a paid leave of up to 14 weeks in case of a stillborn child.
- In case of a miscarriage, an employee is entitled to take up to 3 weeks leave after submitting the required medical certificates.
- By submitting a written declaration stating that he resides in the same house as his spouse and a medical certificate, an employee working at the firm for more than a year can be granted paternity leave up to five days of leave.
- If an employee has worked for an employer for less than 12 months, they may take the absence mentioned above without compensation.
- Part-time employees can also use unpaid paternity leave of 5 days.
- If an employer wants an employee to work flexitime, they must give them notice at least 48 hours in advance.
- An employee may also request such working arrangements, but the employer has the right to refuse the request for a valid cause.
- Within twenty-one days of receiving a flexitime request, the employer must inform the employee in writing of the request’s approval status. Employers should notify when an employee should be available and the duration of work.
- The employees of Mauritius are entitled to a year-end bonus. The bonus calculation differs for different cases and depends on the employee’s compensation.
- If the employee earns MUR 100,000 or less, they are entitled to one-twelfth of their annual pay. However, if they make more than MUR 100,000, one-twelfth of December’s basic salary is multiplied by the number of months the employee works continuously in the calendar year.
- Thirty days of paid vacation time is available to employees who have worked for their employer for five years.
- Employees are entitled to some special leaves. Employees can take six days of paid leave during their first marriage celebration.
- If an employee’s child is getting married, the employee can take three paid leaves.
- The employees are allowed three days of paid leave on the death of their parents, siblings, spouse, or child.
Employee Benefits for Expatriates
Expats working in Mauritius are also included in the employee benefits program. They are entitled to all leaves and additional benefits like health coverage, meal allowance, etc. Expats can expect other benefits such as:
- Relocation expenses
- Accommodation expenses
- Transport benefits
How Are Employee Benefits Taxed in Mauritius?
The income tax applies to the company’s basic pay and the benefits provided to the employees. Additionally, the benefits provided to the employees as fringe benefits in Mauritius are also taxed.
However, pensions and retiring allowances are not taxable benefits. Also, a scheme devised by the Director-General in Mauritius states that the employee’s medical expenses are also not taxable. Additionally, no taxes are applicable on gifts and donations and even on private health insurance subscribed by the employee.
Fringe benefits, which include housing advantages, car benefits, tax benefits, entire board and lodging for residents or ex-pats, personal costs paid by the employer, and any other advantage in money’s worth, are classified as emoluments for PAYE purposes and are taxable.
Restrictions for Mauritius Benefits and Compensation
Different types of employee benefits in Mauritius are subject to income tax. Therefore, companies must calculate the cash value of all the help they provide to get an idea of the amount a company is spending on every employee. These benefits are an essential component of the payroll and will help you calculate payroll tax deductions.
The companies must pay taxes every month in compliance with the federal laws that are in place in Mauritius.
Supplemental Benefits for Employees in Mauritius
The employees in Mauritius are also entitled to several supplementary benefits. Some of these benefits are listed below:
- Car Benefits: Employees are entitled to transport benefits in Mauritius. These benefits range from MUR 9,500 to Rs. 12,000 depending on the designation and the role of the employees.
- Housing Benefits: The companies provide several housing benefits to their employees in different cases. In the case of an unfurnished accommodation, the company provides 10% of the rent, and if the accommodation is furnished, the company pays 15% of the rent.
- Interest-free loans: Several companies help their employees by providing interest-free loans. Some companies also offer loans at a reduced rate of interest.
How Multiplier Can Help with Benefits Management in Mauritius
Setting up a new business in a foreign country can be challenging. Each country has a unique set of labor laws that companies must follow to offer employees benefits and compensation. It is important to create an employment contract that complies with the employment act can be challenging and time-consuming. So, outsourcing a global employment solution, like Multiplier, comes in handy.
When working with Multiplier, navigating Mauritius labor laws and compensation structure will be simple. Our knowledgeable team can help you successfully manage your company while abiding by all applicable labor laws in the area. We help to create a comprehensive employee benefits package.
We offer the infrastructure necessary to talents abroad without needing a subsidiary. As a result, you can cut your recruitment costs and explore new markets.