Employee Benefits

Employee Benefits:

An indirect reward given to an employee or group of employees for

organizational membership.

Introduction:

Employee benefits are various non-wage compensations provided to employees in addition to their normal wages or salaries. Where an employee exchanges (cash) wages for some other form of benefit, this is generally referred to as a 'salary sacrifice' or 'salary exchange' arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree.

What is an employee benefit plan?

There are several ways to describe an employee benefit plan:

• It protects employee and their families from economic hardship brought about by sickness, disability, death or unemployment.

• Provides retirement income to employees and their families.

• Provides a system leave or time off from work. (Mandated benefits)

Costs of providing Employee benefits:

Employee benefit costs vary. Many organizations offer benefit packages with health, dental and vision insurance. Life insurance is also available. The cost varies depending on the benefits. Dental insurance will cost less than health insurance. Employers have also found that benefits present attractive areas of negotiation when large wage and salary increases are infeasible. For example, if employees were to purchase life insurance on their own, they would have to pay for it with net dollars, that is, with what they have left after paying taxes. If the organization pays for it, the benefit is nontaxable (premiums paid on insurance up to $50,000) for each employee.

Contemporary Benefits Offering:

The number and types of benefits offered have increased dramatically, as have their costs. What has triggered the sweeping changes in benefits offerings that will carry us into next millennium?

The answer to that question lies, in following part:

Domestic Partner Benefits:

Health insurance benefits are a traditional offering to employees and their immediate families. However the definition of family has been changing in American society. Living arrangement either heterosexual or homosexual differs today from History. As a result, many employees are demanding same opportunities as married counterparts for medical coverage for significant others.

Many companies voluntarily offer domestic benefits to their employees. Currently only 34 percent of the fortune 500 offer such benefits.

Companies