Types of Fringe Benefits
Fringe benefits can be grouped into two main categories: those required by law and those offered at the employer’s discretion.
1. Legally Required Fringe Benefits
These mandatory benefits ensure employees have medical care, financial support if they lose their job, and income during retirement. Here are some key mandatory fringe benefits:
- Health Insurance: According to the Patient Protection and Affordable Care Act, businesses with more than 50 employees must provide health insurance plans. These plans cover visits to doctors, specialists, and emergency care.
- Unemployment Insurance: Under the Federal Unemployment Tax Act (FUTA), employers pay federal and state unemployment taxes. This helps provide wages, training, and career guidance to employees who lose their jobs through no fault of their own, offering short-term financial assistance.
- Medical Leave: The Family and Medical Leave Act (FMLA) requires businesses with over 50 employees to provide up to 12 weeks of unpaid, job-protected leave for employees who have worked at least one year. This leave can be used for family or medical reasons.
- Worker’s Compensation: Managed by the Department of Labor, this benefit provides medical treatment, wage replacement, and rehabilitation to federal workers injured on the job or suffering from work-related illnesses. Requirements vary by state, so employees need to contact their state worker’s compensation board for details.
2. Employer-Provided Fringe Benefits
These are benefits that employers offer at their discretion to attract and retain employees. Examples include:
- Bonuses: Financial rewards based on performance or company profits.
- Flexible Work Arrangements: Options for remote work, flexible hours, or compressed workweeks.
- Employee Discounts: Reduced prices on company products or services.
- Professional Development: Funding for education, training programs, or certifications.
- Wellness Programs: Gym memberships, fitness classes, and health screenings.
- Commuter Benefits: Subsidies for public transportation, parking, or bike commuting.
- Childcare Assistance: On-site childcare services or subsidies for childcare expenses.