Difficult situations may arise in the life of every hired employee when additional support is required. In other cases, the Company may financially encourage employees for “positive” reasons. In such cases, financial assistance comes to the rescue—a type of social support that many companies provide.
The Company can provide financial assistance to employees in various forms, from one-time payments to long-term support programs. In this article, we will examine financial assistance, who is eligible to receive it, and what steps need to be taken to register.
What is meant by financial assistance to employees
Financial assistance to employees is the financial support that an employer can provide to its employees (and not only them) in various life situations. These are usually cash payments (but there may be other forms of financial assistance) that are not related to the employee’s work obligations.
The Company can provide financial assistance in the form of a lump sum or regular allowance or in a non-monetary form, such as a property transfer.
The employer may provide financial assistance to employees for various reasons:
- Birth of a child.
- Employee’s wedding.
- Death of a relative.
- Difficult financial situation.
- The need for expensive treatment, etc.
Conditions and procedures for providing financial assistance may vary depending on the Company’s policy and internal regulatory documents.
Mandatory and voluntary financial assistance
In some cases, financial assistance is mandatory; in others, it is at the discretion of management.
Mandatory financial assistance
Mandatory financial assistance is payments that the employer is required to make to employees due to state requirements, for example:
- Payments to graduates who were distributed by an educational institution and those who were sent to work and moved to another area are in the salary (or salary at a new place of work).
- A one-time payment of at least one minimum wage (626 Belarusian rubles or approximately 172 euros) to employees dismissed after completing military service or alternative service and taken to their previous place of work.
Voluntary financial assistance
The Company provides voluntary financial assistance at the discretion of its management. Internal documents within the Company often regulate issues of giving financial aid. But even without financial assistance, the head of the Company can decide on such payments to employees, former employees, and their relatives who need financial assistance.
Usually, companies develop local documents listing who can apply for financial assistance, for what reasons, in what order they decide to provide it, and how it is paid.
Amount of financial assistance
The state usually determines the amount of mandatory financial assistance, or at least the minimum amount.
The amount of voluntary financial assistance may vary depending on the employee’s situation and the Company’s capabilities. The Company’s management determines the amount of financial aid the employer provides voluntarily in local documents or by the Social Affairs Commission.
For example, in the Company’s internal documents, you can specify that financial assistance is provided in the following amounts:
- In a certain fixed amount of money.
- The range of monetary amounts depends on the complexity of the financial situation.
- In basic values.
- The range of fundamental values depends on the complexity of the recipient’s financial assistance situation.
- In minimum wages or their range.
Why do companies provide financial assistance?
Here are some reasons why companies can provide financial assistance to their employees:
1. Social responsibility.
A company can strive to create a favourable image and reputation by demonstrating its social responsibility and concern for employees.
2. Increase employee motivation and loyalty.
Financial support can help increase employees ‘ motivation and loyalty to the Company.
3. Improvement of working conditions.
Assistance can be provided to improve working conditions or create a more comfortable working environment.
4. Stimulating professional growth.
Payments can be used to train and develop employees, contributing to their professional growth.
5. Support in difficult life situations.
In the event of an employee’s illness, death of close relatives, or other difficult circumstances, the Company can provide financial support.
6. Attract and retain talented staff.
Financial assistance can be an additional factor in choosing a place of work for highly qualified specialists.
7. Compliance with state requirements.
In some cases, financial assistance is required by law (for example, in natural disasters).
8. Corporate culture.
Financial support can be part of a company’s corporate culture and values.
9. Creating a positive emotional climate.
Supporting employees in difficult times helps to create a more friendly and supportive atmosphere in the team.
10. Reduced staff turnover.
Financial assistance can reduce the likelihood of valuable employees being fired due to financial difficulties.
It is important to note that each Company provides financial assistance based on its goals, resources, and HR policies.
Who can receive financial assistance?
Financial assistance can be paid to non-current employees of the Company. Internal documents of the Company may regulate the procedure for providing financial assistance, including to former employees and relatives of former employees.
What documents confirm the right to financial assistance
Supporting documents are not always required to receive financial assistance from an employee.
When you may need documents from an employee
Persons eligible for financial assistance must submit documents confirming their need for financial aid or their right to receive it. Depending on the grounds for financial aid payment, these documents may include invoices, certificates from health care institutions, certificates of loss or damage to residential premises, child birth certificates, and marriage certificates. In certain situations, accountants ask for documents provided for in the internal regulations on financial assistance.
When the employee does not need documents to receive financial assistance
In some cases, employees are not required to provide supporting documents to receive financial aid. For example:
- When employees are paid financial assistance for vacation at the direction of the Company, an order from the head of the Company on vacation and payment of financial aid is sufficient.
- When employees are paid financial support for their children for school or holidays (since the employer usually has birth certificates for employees ‘ children).
- When financial assistance is paid to employees and former employees of the Company for anniversaries, state and professional holidays, and company anniversaries, it is paid by order of the employer.
Financial assistance to the Company’s employees
The Company may provide financial assistance to employees, for example, in the following cases:
- Getting married is the beginning of a new stage in life that requires financial expenses.
- The birth of a child is a joyful event, which is also associated with additional expenses.
- The anniversary date of birth is a significant event that deserves attention and financial gifts.
- An employee’s retirement ends an employment activity that may require adaptation to a new lifestyle.
- Difficult financial situation — situations related to temporary disability, illness of the employee or his dependent relative, dissolution of marriage and other circumstances that may lead to financial difficulties.
- Granting a regular work vacation is an opportunity to relax and recuperate after work.
- The death of a close relative of an employee is a sad event that requires emotional and financial support.
- The need to pay for expensive treatment is a situation in which you need help paying for medical services and medicines.
- Preparing children for school is an important stage in a family’s life, and it involves the cost of buying school supplies and uniforms.
- Difficult life situations—unforeseen circumstances such as property theft, fire, flood, or an accident involving a relative that requires financial assistance.
- Acquisition/construction of housing by an employee is a significant financial investment that requires support from the employer.
Financial assistance to former employees of the Company
In some instances, in addition to providing financial assistance to current employees, the Company may provide financial assistance to former employees, for example, in the following cases:
- Professional holiday — a day dedicated to a particular profession, which colleagues and management celebrate.
- Public and public holidays are official holidays celebrated by the entire country.
- The anniversary of an organization’s establishment is an important event for the Company, which is celebrated by employees and partners.
- Anniversary of a retired former employee – this is how many companies support retired employees.
Financial assistance to relatives of an employee (including a former employee)
Usually, relatives of an employee or a former employee of the Company receive financial assistance for “negative” reasons, such as an employee’s serious illness or death, when financial expenses are necessary for treatment, transportation of an employee, or funeral arrangements.
An employer may consider providing financial assistance to the relatives of an employee, a former employee, or someone in other difficult situations.
How employees apply for financial assistance
In cases where the Company provides financial assistance at the request of an employee, the employee must:
1. Check whether his case is provided for in the Company’s internal documents as a reason for receiving financial assistance.
2. Collect documents that confirm their right to receive financial assistance.
3. Negotiate with the employer about financial assistance. Even if the Company does not have a provision for financial aid, an employee may ask the employer to provide such assistance in a difficult life situation.
4. Write an application for financial assistance and attach documents confirming the employee’s right to financial aid.
The employer issues an order on the payment of financial assistance, which the accounting department must execute.
How to apply for financial assistance to relatives of an employee, relatives of a former employee
In a difficult life situation, relatives of an employee or a former employee can contact HR employees or the employer’s accounting department to clarify the possibility of receiving financial assistance. If a favourable decision is made, the relative writes an application for financial aid. The application is usually accompanied by documents confirming family ties, a difficult life situation, and details for transferring financial assistance.
Financial assistance is paid to relatives by order of the head of the Company. The order is not shared with relatives who do not work for the Company. Therefore, you should check with the Company’s accountant about the terms of transferring financial assistance to relatives.
When does the Company pay out financial assistance?
Usually, the terms of payment of financial assistance are determined in the Company’s internal documents. According to the decision of the company head, financial assistance can be paid on the days of wage payment in the month when the employee (relatives) applied for it or in the following month. Urgent financial aid is also possible.
Apart from that, financial assistance is one of the important tools for firms to express their commitment and concern towards staff, in order to develop a decent work environment. It upgrades their morale, loyalty, and satisfaction due to job opportunities. The services of a management company in Belarus will help you develop effective financial assistance programs for your organization.
How to contact us
For more information or advice on issues related to financial assistance in Belarus, do not hesitate to contact us. We are here to help and support you.
Phone and email communication options are available for your convenience:
- +375293664477 (WhatsApp/Telegram/Viber);
- info@spex.by.
