The extra payments provided to employees on top of the regular wages or salaries are referred to as employee benefits and services. A while ago, benefits and services were considered a minor aspect, a situation which is changing with time (Moran, 2015). The company can quickly achieve its objective by providing its employees with the intended business objective and good benefits and services. Employee benefits and services are also called perks or fringes. (Danehower et al., 2016). Employee benefits and services help a company retain its talented employees by protecting them from their competitors. This is due to the fact they promote the satisfaction and commitment of the employees. Employee benefits vary from one organization to another. Most companies offer tax-free benefits and services.
Some of the benefits offered to employees are mandated by the government, while others are provided willingly by the companies because they feel responsible for their employees. Benefits that are mandated by the government include; consolidated Omni-budget reconciliation act. This act requires that companies having more than 20 employees to offer extended medical insurance to them and their families for the next 18 months or more upon the termination of a job.
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Another benefit includes the Disability and Workers Compensation, which requires a sick or injured employee continues to be paid until able to return to work. The payment is usually a portion of the regular salary or wage. Family and Medical Leave Act requires employers to offer maternity /paternity or adoption leave. It is not a must for the leave to be paid, but most companies choose to pay. (Bergmann et al., 2014). Minimum Wages and Overtime: The Fair Labor Standards Act mandates all companies to pay all employees a minimum set wage amount and extra payment for any overtime work done.
Some of the benefits offered by a company but may not be mandated by the government include; life assurance, which pays the employee in case of a long-term illness or death. Medical insurance covers for non-work accidents of illness. Sick leave plan ensures that employees are paid in absentia due to non-work-related injuries or illness. Other voluntary sponsored benefits include long-term disability plans and mental health benefits (Moran, 2015). Retirement benefits are the amount of money payable when the employee reaches the required retirement age or in case of termination of the contract or death.
Retirement benefits can also be termed as pension schemes. The government mandates this type of benefit. (Danehower et al. 2016) Pensions are formed by the accumulation of one's contribution towards them. Besides, one receives tax relief on the pensions they are supposed to receive. Pensions are essential, for they provide one with income after retiring. When it comes to matters concerning pensions, men and women are treated equally, different from other benefits such as maternity and work breaks that seem to favor women more.
There are several types of pension plans, which include: those that have a defined plan. Such that the amount of benefits to be received by an individual are determined before time. This pension plan comprises a specific formula that determines the amount of benefit to be received. Another category consists of a contribution plan. This category does not have a specific amount of benefit to be received, but the individual's contribution determines the amount. (Moran, 2015) Another category comprises a group saving plan that entails a group of employees having the group registered retirement plan that is not taxed until the retirement period. Another type involves a portion of the companies' profits deposited on the employees' account but payable on retirement.
References
Bergmann, T. J, Bergmann, M. A., & Grahn, J. L. (2014). How significant are employee benefits to public sector employees? Public Personnel Management, 23,397-406.
Danehower, C. & Lust, J. A. (2016). How aware are employees of their benefits ? Benefits Quarterly , 11, 69-75.
Moran, P. (2015). Retirement Plans from Around the World. Retrieved from: http://www.investopedia.com/financial-edge/0412/retirement-plans-from-around-the-world.aspx
