Comparing Fringe Benefits Package and Employee Compensation

Employee fringe benefits and perks in all form are offered to employees as well as their regular wages or salaries. Many instances where individual exchanges salaries for any other type of monetary benefit is commonly known as a “payout” or “wage replacement” agreement. Such agreements may be made between the employer and employee, or they may be made voluntarily by the employee. The latter type of agreement is usually entered into in response to a grievance settlement. In either case, an employee must have enough valid information to support the claim so that the arbitrator or court does not dismiss it.

fringe benefits


Employees are often confused about what types of fringe benefits are considered reasonable. The courts have repeatedly stated that an employee cannot receive any types of return benefits or salary increases under any circumstances. Return benefits include tips, free meals, discounts at stores, holidays, expense reports, free medical and dental care, etc. fringe benefits actually do cost the employer money, so it is important to carefully consider whether or not any such benefits are excessive or if they would benefit the employee in a substantial way.

Most employers are extremely particular about fringe benefits. They are not just an employee’s ticket to getting ahead. Most employers closely monitor the types of bonuses and income increases employees receive each year. They look closely at the amounts employees continue to earn after reaching a specific level of income so that they do not become enriched at the expense of the company. Even though an employee may receive a substantial amount of benefits that would be clearly considered fringe benefits, it may not be within the financial means of the employer.

Employers who are considering generous benefits for their employees should take steps to verify the employee’s eligibility for any planned benefit plan. Many employees mistakenly believe that all they need to do is to simply work harder and longer. While this may be true, this does not mean that an employee’s salary needs to be increased in order to meet an employer’s benefit requirements. It is imperative that both an employee’s compensation package and fringe benefits remain reasonable so that an employee is not subjected to unreasonable treatment.

Not only should an employee know his or her options concerning fringe benefits, but an employer must also make sure its benefits package and those of its competitors are comparable. Comparing benefits packages can sometimes be difficult because each company designs them in different ways. This means comparing one company’s benefits to its competitors is difficult because they differ significantly on almost every aspect from their benefits to their pricing and customer service. However, there are some basic areas that are usually similar for most employers.

One area of similarity is the cost of providing these benefits. Many companies provide these types of benefits without increasing the cost of employees’ compensation. Others increase the cost of compensation while failing to provide any additional benefits to employees. When comparing different benefits packages, keep these three things in mind: the cost of the benefits package, whether the employees’ compensation package will cover all of the costs, and whether the employees’ compensation package will allow the employees to get any of their out-of-pocket expenses paid for.

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