How to Benefit from your Employee Benefits
An important part of any employment opportunity is reviewing what benefits you will receive. While there are some federally required benefits, others are quality-of-life or offered specifically by certain companies – creating a draw for employment over competitors. Benefits include retirement plans, health insurance, paid leave, gym memberships, free lunch or snacks, and more.
In fact, according to a survey during Q3 of 2015, 4 of 5 employees preferred better benefits over a raise. What are common benefits, and what do they mean to you as an employee?
Benefits that an employer must legally offer include:
- Social Security taxes at the same rate as employees
- Unemployment insurance
- Workers compensation
- Disability insurance (but only in California, Hawaii, New Jersey, New York, Puerto Rico, and Rhode Island)
- Family and medical leave
Common perks that are not required but often offered include:
- Health plans
- Retirement plans
- Profit sharing/stock options
- Flexible hours (AKA Flex time)
- Workplace wellness programs
- Gym memberships
- Family events
- Paid leave
- Tuition reimbursement
Breaking Benefits Down
Most of the required benefits make sense – paying into Social Security, unemployment, workers comp, disability. However, family and medical leave are a bit more nuanced, and non-required benefits may require some explaining.
Family and medical leave
While required by law, leave can be different per company. The Family and Medical Leave Act is also only required by companies with 50 or more employees. The FMLA allows for leave after childbirth or adoption, or after suffering injury. However, some companies provide more than the standard 12 weeks for the mother and 2 weeks for the father for birth/adoption as an added benefit of employment.
A company that offers health insurance may offer just one plan, or have a few plans to choose from. This can give you a choice, for example, between higher and lower deductibles. Dental and vision insurances may also be offered.
As of March 2016, about 69 percent of companies offer retirement plans, but only a little more than half of those companies’ employees utilize the benefit. Plans offered could include pensions or retirement savings matching. For example, your company may offer to match up to 5 percent of your paycheck if you put it towards a 401(k), IRA, or Roth IRA account. These are especially useful early in your career, as compounding interest could leave you with a hefty sum of money on retirement. However, this also means a smaller paycheck each month, but will be worth the loss in the long run.
Profit sharing and stock options
In the same vein as retirement plans, your employer may offer stock in the company or profit sharing. Profit sharing is exactly what the name implies – you get a cut of the profit the company makes, usually phrased as “up to” a certain percentage in your contract. Stock options allow you to buy stock in the company, usually at a discount and without broker fees, meaning an immediate profit should you decide to sell. Of course, as with any stock, prices could go up as the company improves, meaning it may be a good long-term investment to hold on to the stock. This also applies to stock in companies entirely employee-owned. This is a fantastic benefit if offered, and one you should take advantage of at the maximum allowable amount. An option often given with company stock is to reinvest the dividends at no additional cost – another feature you should take advantage of if offered, assuming the company is doing well.
Commonly referred to as flex time, flexible hours could mean the ability to work from home a few times each month, not necessarily during normal working hours. Be your own boss for the day and do your work in pajamas – just don’t let chores distract you. This benefit is rare, however, with only 6 percent of companies offering flex time.
Workplace wellness programs
There’s quite a few programs your company could offer as part of a wellness program. There might be a smoking cessation plan or a half-hour team walk every Friday. Trainers from a local gym may teach yoga every other week. A little less than half of companies polled offered a wellness class or program.
As part of the wellness program, a gym membership might be offered. It’s not necessary to take part in the in-office programs, and the company may only pay for the membership if you use the membership on a regular basis.
One night each month may be set aside for family movie night, or a family picnic in the warmer months. These benefits are meant to get employees’ families involved to foster a better sense of community. It may be something as simple as a “take your child to work” day, but the aim is to improve morale and provide something fun for you as the employee.
While most companies offer paid holidays, only 14 percent offer paid family leave. Other paid leave that may be offered includes bereavement leave, jury duty leave, or personal leave – differentiated from sick leave or vacation time. This can be in the form of a floating “birthday” holiday.
Looking to get a Master’s degree with night classes? Your company may offer reimbursement, at least in part and possibly depending on your final grades, for post-graduate degrees. If you study within your current field, the IRS may consider the benefit as tax-free up to a certain amount.
What benefits are offered may affect your choice of employers. Some benefits should be utilized as much as possible, such as profit sharing or tuition reimbursement, while others like gym membership are quality-of-life benefits to keep you healthy. Each, however, will certainly benefit you as an employee.
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A former newspaper journalist, Cole spends his free time reading, writing, playing video games, watching movies, and learning about every subject under the sun. He lives with his wife and daughter in Idaho. Follow Cole on Twitter: @ColeMayer42
This post was updated June 25, 2017. It was originally published January 25, 2017.