1. Curtis Pfaehler
12/04/2008
Fringe Benefits
In today’s business world, compensation of salary and how people get paid vary
greatly. Our textbook defines fringe benefits as being “nonmonetary forms of
compensation such as health insurance and retirement plans.” Basically, fringe benefits
are compensations made to an employee beyond the regular benefit of being paid for
work. Some fringe benefits are fairly standard, such as offering a few days of sick leave
or paid vacation time. There are some other forms of fringe benefits that are greater
than others but far less common. Key executives in large companies might also enjoy
benefits like use of time-share condominiums, paid continuing education, use of a
company jet or company credit card, discounted or free health club memberships, and a
significant amount of paid vacation. This does not happen for most people in the
business world but it does exist. Honestly, most people who work full time in the United
States could probably not get along without the help of fringe benefits to their salary.
Most companies realize that fringe benefits, such as health insurance, contribute to the
well-being of their employees and therefore help the company as a whole. Whenever
possible, companies 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 time or vacation
time tend to be fairly standard as well, even if an employee does not work with the
company full time. These paid days off do tend to have limitations so that employees do
not take advantage of companies. For example, a new employee might get a week’s

2. 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.
Fringe benefit packages can be 30 percent or more of an employee’s salary.
The main options that are usually included deal with disability protection, health and life
insurance, and retirement plans. Both employees and employers benefit from the use
of fringe benefits. Employees are given protection and stable life conditions so that
there is not nearly as much to worry about. This, in turn, allows for the employee to be
more effective at work, which helps benefit the employer. There are some problems
that are coming about for employers, however. The rising costs of fringe benefits such
as those dealing with medical issues, is certainly a worry for employers. Employers
have started to try to gain control of this problem. Many employers are attempting to
lower the amount of money that they are spending on health care costs by becoming
more active in their employees’ choices of health care providers and by encouraging
healthy lifestyles. For example, companies are often paying for memberships at health
clubs and gyms to try to ensure that their employees are healthier. This would cut down
on health costs, in the long run. An approach that is now being used more commonly
than before is flexible benefits options. Our textbook defines flexible benefits as
“programs that allow employees to choose from a range of benefit options within a
certain dollar amount.” Work-life balance is also more prominent today than in the past,
so this also must be accounted for. Family-friendly benefits are used to try to help
employee’s better balance work and non-work responsibilities. Because people are so
busy in today’s world, having these types of benefits is a big help. Some family-friendly

3. benefits include child care, elder care, flexible scheduling, parental leave, and part-time
employment options. Some people are also offered employment assistance programs
to help the employee deal with troublesome personal problems. Some of these
programs may include help in terms of stress, alcohol and substance abuse, referrals
for domestic violence and sexual abuse, family and marital counseling, and advice on
community resources. All the benefits that are not directly monetary offered to
employees are examples of fringe benefits. Any little thing that employers can do to
help their employees ends up being a positive thing for both parties.