Sazzadul Hassan

Mohammad Kashem served a private company for 20 years. One fine morning when he was getting ready to go to his office, he had a sudden heart attack. Unfortunately, he could not recover, left this world, leaving behind a family of four members – his elderly mother, wife and two children.

Kashem was the breadwinner of the family. The entire family was at the mercy of his minuscule salary. Like most of the private sector employees in Bangladesh, he was literally living from hand to mouth and had no savings whatsoever.

To add to the despairs, the organisation Kashem worked for neither had any insurance policy nor the after-service benefits. Consequently, after his passing, the family found itself in a dire state, with no clue how to survive.

Kashem represents millions of private sectors employees who devote their best part of life working for organisations yet are unable to ensure a secure life. What should be done to deal with this unkind situation? There should be some components in the compensation that would take care of the uncertainties associated with life.

For instance, medical allowances could be of help.

Employees and their family members do get sick. There are very a few companies that reimburse medical expenses for the employees and their immediate family members. Some companies offer a lump sum monthly amount, while most firms do not provide any such facility.

Health insurance to cover medical expenses is a popular and widely used tool in many countries. Employers, insurance companies, and the government should jointly work to come up with a cost-effective, comprehensive medical coverage plan.

There is a restriction in the existing tax law that says a company can pay 10 per cent of the annual basic salary, Tk 120,000, or whichever is lower as a medical allowance to an employee. If the company pays more than the specified amount, the additional amount is taxed. This restriction should be lifted to encourage firms to help the employees whenever they face any unfortunate medical emergency.

Another component could be life insurance. Anytime an employee can meet an accident that may lead to disability or even death. To address the challenge, life insurance coverage must be ensured for all employees. The regulatory authority would decide a minimum value. However, if the organisations want, they can go for higher insurance coverage.

A contributory provident fund can be put in place. From the basic salary of an employee, a certain percentage would be deducted, and the organisation would add a similar amount to top that up. The total amount will be invested.

At the time of separation, the employee will be awarded the total amount plus the interest earned.

One-month basic salary could be added for each completed year of service in the form of gratuity. This provision is already included in our labour law. However, not all organisations abide by this. Gratuity is also given at the time of separation.

A universal pension scheme can be introduced. Discussions have been going on since 2015 to put in place a pension scheme for the private sector employees and self-employed persons. In the budget speech of 2019-20, the finance minister proposed to form a Universal Pension Authority to implement the plan. However, the plan is yet to take any shape.