Do You Offer Fringe Benefits?

Beyond the regular hourly or salary paid to employees, employers may offer fringe benefits. There are standard fringe benefits, such as sick pay and/or vacation pay. The amount of paid time off (PTO) is often tied to length of time with employer. For example, a newly hired employee may be entitled to 5 paid days off the first year. However, an employee who has been with the company 15 years may receive a full month of paid vacation each year.

Although fringe benefits are (largely) not required by law, companies often choose to offer these benefits for a variety of reasons:

1. Companies have realized that many benefits contribute to the well being -- and thereby, productivity -- of their employees. The best example is health insurance.
   These employers often choose to offer more comprehensive health insurance coverage than required by law. The availability of a comprehensive health insurance plan is frequently as valuable to a potential employee as the salary offered.
    
2. Companies recognize that fringe benefits are a powerful method of "sweetening the deal" when recruiting high-demand candidates. Fields in which this is currently most common are teaching and nursing. School districts have been known to offer paid housing, hiring bonuses, and tuition reimbursement.
   
   Some fringe benefits are generally only available to high-end executives. Such benefits may include an expense account, use of a company time-share condominium or private jet, or large blocks of paid time off.
    
3. Many companies must operate 24 hours a day. To encourage employees to accept generally undesirable shifts, an increase of 10-30% in pay (known as a shift differential) is offered to offset the inconvenience of working at night. Healthcare and manufacturing fields are the industries most frequently associated with offering shift differentials.
    
4. Employees must take into account the cost of living when considering a job offer. Some employers recognize this need and offer housing allowances or even company housing to offset this concern. 401Ks and similar savings plans are also attractive to employees who wish to invest in their long-term financial situation.

Companies of a certain size are required to offer certain fringe benefits to full-time employees, specifically health insurance benefits. As mentioned previously, some employers willingly calculate these fringe benefits into their employment packages. Others attempt to avoid the expense by offering the cheapest health care package they can secure. Some employers even go so far as to primarily employ only part-time workers in lieu of full-time employees.

Companies must always balance the need to profit with the needs of their employees. Employers who wish to attract and maintain the talents of quality employees will invest as much as possible in providing benefits to those employees.

Originally posted at DavisBacon.org.

Written by Tammy Emineth for DavisBacon.org.