Employees who are directly engaged in the production process incur:

1. Direct employee cost is benefit paid or payable to employees whose effort can be attributed to a cost object. 2. Workers on the production line who can be traced to specific outputs fall into this bucket. 3. Indirect employee cost covers staff such as supervisors and storekeepers. 4. Hence employees directly engaged in production incur direct employee cost. _Source: ICAI BoS Inter Paper 3, Ch 3 "Employee Cost", §3.2 ¶2_