Employee Benefits

AuthorMarcy Satterwhite
Pages239-242

Page 239

Employee benefits are compensations given to employees in addition to regular salaries or wages. These compensations are given at the entire or partial expense of the employer. Benefit packages usually make up between 30 and 40 percent of an employee's total compensation for employment, which makes them an important aspect of the terms of employment. While some employee benefits are required by law, many employers offer additional benefits in order to attract and retain quality workers and maintain morale. Some types of benefits are also used as incentives to encourage increased worker productivity.

LEGALLY REQUIRED BENEFITS

While some benefits are offered as incentives to attract workers, some are legally required. For example, employers must provide workers' compensation insurance, which pays the medical bills for job-related injuries and provides an income for employees who become disabled because of a job-related injury. Social Security must be paid by the employer (in addition to the amounts deducted from employees' pay) to help meet employees' retirement needs, and employers must pay for unemployment insurance to compensate workers in the event that their job is eliminated. The Family and Medical Leave Act, passed by Congress in 1993, requires large employers to provide workers with unpaid leave for family or medical emergencies (up to twelve weeks of unpaid, job-protected leave per year). Under this law, employees are guaranteed that they can return to the same or a comparable position and that their health care coverage will be continued during the leave.

TRADITIONAL TYPES OF EMPLOYEE BENEFITS

Because of continually rising health care costs, one of the most desirable types of benefits for employees to have is a health insurance plan. These plans can be set up to cover the individual worker and, in many cases, the worker's family as well; they may or may not include such options as dental, eye, chiropractic, hospital, and other types of health care. Health insurance plans may be provided at no cost to employees, or they may be made available at a more desirable rate than employees could get on their own. The health insurance aspect of a benefit package is

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often the major deciding factor in whether a person accepts a position with a company. The degree of health insurance is often more important to a potential employee than the salary level, especially when children are involved.

Most benefit plans also include a certain number of paid sick days, personal days, and/or vacation days. Many companies are finding ways of increasing the flexibility of employee benefits. One way to increase flexibility is to group vacation, personal, and sick days into a certain amount of paid time off (PTO). PTO allows employees to take days off—for example, to care for a sick child, observe a religious holiday, or go on vacation—without explanation. The PTO benefit helps employees because their time is more flexible, and it helps employers by maintaining morale and reducing unanticipated absenteeism.

Life insurance and retirement options are another type of benefit many companies offer their employees. These types of...

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