Employee Benefits

Employers offer a variety of benefits or "perks" as a way to attract and retain quality employees. Such benefit programs boost morale and loyalty within the workforce and provide tax advantages for the employer. Though the types of benefits offered and the dollar amount for which the employer covers varies from company to company, most professionals agree that providing employee benefits is necessary to remain competitive in today's business environment.

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A comprehensive benefits package is a critical component of the total employee compensation package. This has become an increasingly important issue to employers, as benefits represent a significant portion of the overall compensation paid to employees. On average, employers spend between 20% to 33% of payroll on employee benefits.

For many employers, a benefit plan is an integral part of total compensation, because employers either pay the entire cost of a benefit plan or have employees contribute a small portion of premium costs for their coverage.

The full range of benefit programs is discussed in this section, including benefits that are required by law, such as COBRA, HIPAA, FMLA, Social Security and Workers' Compensation. Also included are time-off benefits, such as leaves of absence, vacation and holiday pay; 401(k) benefits; health and related insurance benefits, and a variety of other miscellaneous benefits commonly provided by employers, including tuition assistance plans, Direct Deposit, Premium Only Plans, Employee Assistance Program (EAP) and Flexible Spending Accounts.