Trending Fringe Employee Benefits – Employers Guide
Fringe benefits are those that a business gives to its employees in addition to the financial compensation they're already earning. Essentially, anything that goes above and beyond a person's base salary would fall under this category.
Some types of fringe benefits are given out to all employees. Others are only available once someone has achieved a certain position, like becoming an executive. Regardless, the goal is clear - they significantly help increase employee satisfaction, which also goes a long way toward improving engagement as well. Many organizations use fringe benefits to not only motivate existing employees but to attract and retain top talent in increasingly competitive industries, too.
Types of Fringe Benefits
All told, there are a few different types of fringe benefits to be aware of when putting together such a program for your organization. Some are essentially required as employees - especially those top-tier candidates who are looking for a new position - have come to expect them. While others are optional, it is still a good idea to offer for several different reasons.
Required Benefits
One prime example of a required fringe benefit has to do with health insurance. Under the Affordable Care Act, a business does not have to provide health insurance to employees if they have fewer than 50 full-time equivalent workers. Having said that, many employees and job seekers have come to expect it and if you don't offer it, they will likely go somewhere.
Paid Sick Leave (PSL) is another example of a required fringe benefit in the state of California. PSL requires employers to provide at least 24 hours (3 days) off each year to most workers who meet a set of qualifications.
Finally, family and medical leave would be another perfect example of a required fringe benefit. If you employ more than 50 people within a 75-mile radius of your primary location, you must offer this under the Family and Medical Leave Act. However, even if you don't, it's another in a long line of ways in which you can remain competitive when hunting for high-quality candidates to fill available positions.
Optional Benefits
There are a number of other fringe benefits that, while not explicitly required by law, would still be a good idea for any business to offer.
Paid vacation leave or Paid Time Off, also commonly referred to as PTO, is an example. Whether someone has a health situation on their hands and needs to be away from work, or if they just want to go on a much-needed vacation, offering PTO is a perfect way to support them and show that you care about their health and well-being.
Other organizations have taken to offering things like gym memberships or commute benefits as well. Gym memberships are a great way to encourage your employees to stay healthy. Those who are active tend to get sick far less than average, which helps with their productivity and quality of work. Commuter benefits are transportation benefits that people can use for things like public transportation, bicycling, and even parking to get to and from work.
Here are some examples of optional Fringe benefits that more and more employers are offering:
- Dental
- Vision
- Group Term Life
- Disability Insurance
- PTO
- Gym Memberships
- Employee Discounts
- Commuter Benefits
- Additional Mental Health Services
- Identity Protection
- Financial Wellness Education
- Legal Services
- Pet Insurance
- And More!
Advantages of Offering Fringe Benefits
As stated, perhaps the biggest advantage of offering fringe benefits is that it helps you attract and retain top talent. Even if you can't offer what is objectively the highest salary in your industry, that doesn't mean you can't remain competitive. If you offer a lower salary than another business but offer fringe benefits that they do not, like healthcare or PTO, jobseekers will still take that very seriously.
Other advantages of fringe benefits include the fact that it keeps your employees invested in your business, which ultimately keeps them motivated to do their best work on a regular basis. All of this helps to boost employee satisfaction, which also increases loyalty. The happier someone is, the less likely they are to look elsewhere for employment - never underestimate how important satisfaction in the workplace really is.
Are Fringe Benefits Taxable?
Yes. All fringe employee benefits that you offer are taxable by the Internal Revenue Service unless they are expressly stated. The "fair price value" of the benefit in question will count as taxable income for a given year.
What Fringe Benefits are Non-Taxable?
As per the Internal Revenue Service, just a few examples of the types of fringe employee benefits that are exempt from Income Tax Withholding include but are not limited to:
- Accident and health-related benefits.
- Adoption assistance.
- Dependent care assistance (up to a certain limit).
- Educational assistance.
- Employee discounts.
- Group-term life insurance (up to a certain limit).
- Health savings accounts.
- Transportation benefits (up to a certain limit).
- Tuition reduction.
- Working conditions-related benefits.
Why Should an Employer Offer Fringe Benefits?
Overall, employees should offer fringe benefits because, in the fast-paced modern era that we're living in, a business will live and die based on the strength of its workforce. Especially when many industries are facing increasing skills gaps that are only going to get worse over the next decade, fringe employee benefits are the best way to both attract the attention of the best possible workers and keep them in the fold for as long as possible.
How Can AEIS Help with Fringe Benefits?
At AEIS, we pride ourselves on our ability to offer the comprehensive benefits advisory experience that business leaders need, regardless of the industry that they're operating in. In addition to helping with fringe benefits, we also offer access to your own personal account manager to assist you with ongoing services, an HR and employee learning management system, the assistance of a marketing and renewal specialist, and more - all so that you can rest easy knowing that your benefits needs are being taken care of.
If you'd like to find out more information about why
fringe employee benefits are an avenue that you should be exploring, or if you'd just like to discuss your own needs with someone in a bit more detail,
please contact the team at AEIS today.
We're here to help.
Schedule a free phone consultation today.
P: 650.348.6234
E: team@aeisadvisors.com
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