Week 8: March 13, 2008

Topic this Week:
Employment (Fringe) Benefits
Instructions for this week:

• Come in to the Career Center on Thursday or Friday, March 13 or 14, and sign your Attendance Sheet. Place signed Attendance Sheet in Attendance box. Do not come in any earlier.

• Complete your Week 08 assignment (see below) which is due Thursday March 20, Room H-30.

• Work on updating your class notebook for turn in on March 20.

  • See updated Table of Contents / Dividers (Word) (pdf)
    Don't forget to add a Grade Report Divider

Assignment - Week 8 - Fringe Benefits
Read the article below and then complete the Week 8 Notes
Download the Week 8 Notes Here (pdf file)

Fringe benefits are compensations made to an employee beyond the regular benefit of being paid for their work. Some fringe benefits are fairly standard, such as offering a few days of sick time or paid vacation time. Others can be significantly greater, and more rare. Key executives in large companies might also enjoy fringe benefits like use of time-share condominiums, paid continuing education, use of a company jet, use of a company credit card, discounted or free health club memberships, and a significant amount of paid vacation.

Most people who work full time in the US could probably not get along without fringe benefits. For example, offering health insurance to employees, where the employer pays part of the insurance is a typical example of fringe benefits. According to the laws in some states, companies of a certain size must offer health insurance with some sharing of payment at least to a full-time employee. Some companies avoid this by employing more part-time workers.

Most companies, however, realize that fringe benefits like health insurance contribute to the well being of their employees. Whenever possible, they try to offer at least partially discounted insurance to an employee, even if they are not legally required to do so. Fringe benefits like sick or vacation time tend to be fairly standard as well, even if an employee does not work full time. These paid days off do tend to have a cap on them. For example, a new employee might get a week’s vacation time to start, and eight to ten days of sick time for year. Employees entering higher-level positions may be offered greater fringe benefits as incentive to join a company.

In fact, in fields where there is a high demand for workers, such as nursing and teaching, some unusual fringe benefits may be offered to attract employees. Small school districts have gotten quite creative in this respect, since teacher salaries are still relatively low. A few unusual fringe benefits offered by school districts have been paid housing, or use of private lakes for fishing. (Not in the Santa Barbara School District!) More likely are paid incentives for joining a teaching staff such as hiring bonuses, offers to fund continuing educatio so teachers get higher degrees and thus higher pay, or offering mentor programs for new teachers.

Registered nurses are badly needed due to new requirements on nurse/patient ratio. This has led to uncommonly large hiring bonuses, agreements to pay off student loans for new nurses, and generous health insurance and time off packages. Other fields with high demands for workers and low worker supply are likely to offer the most attractive fringe benefits packages.

Sometimes the fringe benefits turn out to be greatly needed. For example, the rising cost of private health insurance often makes obtaining a job with a good health plan highly desirable. Programs like 401k plans can help employees save money for the future. Where job compensation is not commensurate with money needed to live comfortably, housing allowances, or company housing can often make the difference between being able to take a job and looking elsewhere.

Some companies also pay fringe benefits for those who work night or swing shifts. These fringe benefits may be in the nature of a 10—30% increase of base pay for working a non-standard shift. This is called a shift differential and is quite common in the medical field and in manufacturing.

In years past, fringe benefits were plentiful. In recent times though, particularly with the rising cost of health insurance, benefits are not what they used to be.