Employee fringe benefits and advantages in form include various kinds of non-wage compensations offered to employees as well as their regular salaries or wages. Such instances where individual exchanges salaries for any other form of advantage is known as “salary packing” or “pay for performance” agreement. Such agreements are common in the healthcare industry where health care providers often offer their employees inexpensive benefits that they can use against any paycheck that does not contain enough money for them to survive on. However, the practice of offering such non-wages to workers is highly controversial especially in the United States where companies are usually conservative by nature and cannot afford to lose any employee. Despite this, many companies throughout the world continue to make this kind of agreement so that they can avoid lawsuits as well as employee protests.
There are different forms of fringe benefits that an employer may offer to its employees. Most of these benefits include housing, meals, medical benefits, paid time off, paid holidays, paid social security, and paid Disability Insurance. However, most employees do not consider them as fringe benefits because the payment for these perks usually comes from their own pocket. This is why it is important for employers to carefully review all the options that they have for offering employee perks and decide whether or not to go with them.
The fringe benefits that are covered in by the employee contract or agreement are usually listed and described in the employment agreement. The most common is the provision of accommodation allowance, meals, medical expenses and insurance. However, some companies add other benefits such as paid time off, holidays, paid social security, and paid Disability Insurance as fringe benefits. Depending on the laws of the country, these fringe benefits may also be deducted from the gross salary of the employee.
These types of agreements between the employer and the employee are generally very carefully drafted. Therefore, it is advisable for both parties to go through the contract carefully before they sign. Most employers understand the importance of having a positive and binding contract between them and their employees, which ensure that both parties’ needs are met and that the employees’ rights are protected. However, some companies still manage to get themselves into trouble by including extraneous provisions which could be considered to be against the employee’s interests.
The first thing that an employee should look out for when signing any contract or agreement is the term of the fringe benefits. An employee should make sure that the agreed upon fringe benefits will be effective only during the term of his employment with the company. If an employee joins the company after a particular period of employment, he may not be entitled to the said benefits. Similarly, an employee should know the exact term of the notice period of the fringe benefits. This is critical, as most employees do not like to wait for a specific period of time just so they can claim their benefits.
Apart from this, it is important for employees to read over the entire contract or agreement very carefully. They should check for any ambiguous words or clauses that might be interpreted in a negative manner by their employers. Most employers do not provide fringe benefits unless employees ask for it, but this is not always the case. In such a scenario, it is advisable for employees to negotiate for the inclusion of fringe benefits. The entire agreement must include every stipulation that applies to the fringe benefits. It is advisable for employees to work out the terms of compensation and benefits with their respective employers before they sign on the dotted line.