If you have a job and you are not familiar with your employee benefits, we suggest you call HR immediately and find out what they are! Most employers offer a range of different benefits to their employees, so talking with them is important for understanding employee benefits available to you!
In fact, some benefits are required by law. Understanding employee benefits available to you is crucial in becoming a financially savvy lady!
Keep in mind that most benefits apply only to employees, not contractors. We are going to cover the most common types of employee benefits, and some of the great benefits offered by larger companies and corporations.
If any of the benefits interest you, take notes and talk to the HR department. They can provide you with all of the details on what is available and when you can start taking advantage of the benefits.
Common Benefits
Vacation and Sick Time
The most common type of benefits offered to employees of any business is vacation and sick time. The amount of vacation and sick time allotted is usually determined by your job role and years of service.
Some companies increase your annual vacation allotment as you grow within the company. Vacation and sick time is usually lost at the start of the next year if you don’t use it. However, California, Rhode Island, Illinois and Montana require vacation carryover from year to year.
Sick time is generally never rolled over. If you are feeling guilty about using your personal time, read our tips on how to skip the guilt and take your day off!
401(k)/403(b) and Pension
Investing in a 401(k) or other retirement plan is one of the best ways to help financially secure your future. Most companies offer a selection of 401(k) plans to their employees. A 403(b) is a similar plan, often provided by non-profit organizations or schools.
After a certain amount of time, your employer may even match your 401(k) contribution. Check out the Finance 101: Retirement Plans article for more information on why you need a 401(k).
Pensions aren’t as common anymore, but some employers still participate. A pension is a retirement fund that is set up for you, which your employer funds. The more time you spend with the company, the higher your pension will be. A pension is distributed when you retire.
Health Insurance
While you don’t need an employer to get health insurance, it is often cheaper when purchased through your work. Companies buy health insurance and offer it to employees at lower rates.
Having your insurance payment taken out of your paycheck makes it easier to maintain. You also get a lower rate if you have dependents. Medical, dental and vision plans are the most common types.
Some employers may also provide employees with an HSA (health savings account) to help cover out of pocket medical costs.
Medical, Personal and Maternity Leave
Under FMLA, or the Family and Medical Leave Act, as an employee, you are protected from job loss and loss of health insurance for a specific family or medical reason. The time allotted can be as high as 6 months.
Common reasons include: a serious health condition, caring for a spouse, parent or child with a serious health condition, and active military duty emergencies. Maternity leave is also protected under FMLA, usually 3 months.
It is possible for employers to continuing paying employees on approved leave; however, it is not required that pay continue during the leave.
Reimbursed Expenses and Commuter Benefits
Reimbursed expenses are often a benefit of working from home, or paying for a work related item or trip. Expenses incurred during business trips, business meetings, and doing business at home are often reimbursed quickly.
You can deduct un-reimbursed expenses on your tax return. Commuter benefits are common for employees working in large cities that have to commute to work. For example, a person living in New Jersey may have to commute via train to work in New York, and this can get costly.
Discounted rates are granted to employees who take advantage of commuter benefits from their work. Commuter fees may be taken directly out of employee paychecks as well.
Additional Benefits
Child Care Expense Reimbursement
Day care reimbursement and adoption assistance is a benefit offered by some employers. There is usually a cap on how much can be reimbursed, but with the high costs of childcare anything can help.
Companies may also have approved providers that offer discounts to their employees. If you have children and day care expenses, it is worth looking in to.
Tuition Reimbursement
Depending on what you are studying or majoring in school, your company may reimburse you up to a certain amount each year for tuition. Depending on the maximum amount reimbursed by your company, this can make a big difference!
Free Therapy/Counseling
If you are dealing with stress, depression or any other feeling that may require counseling or therapy, your company may pay for a few sessions. Payment would typically take place directly between the counselor/therapist and the company’s insurance.
Bereavement
Another possible employee benefit is paid bereavement time. Bereavement is the time you take to mourn the loss of a loved one, as well as attend the funeral. This time does not take away from your sick or vacation time, and is generally still paid for.
Related: Taking Advantage of Employee Stock Options
You will be surprised at all of the benefits companies can offer their employees. So, understanding employee benefits can save you time and money! If you are looking for a job, do an online search on your prospective workplaces to get an idea of what type of benefits they provide.
If you already have an employer, but you are not taking advantage (or don’t know of) any benefits, make sure you find out! Benefits can make certain situations that much easier to deal with, and if they are there for the taking, what is stopping you?
Do you get great benefits from your company? Do you struggle with understanding employee benefits? Are there any special benefits you are receiving or received in the past? Share your thoughts and experiences with the community by leaving a comment below!
2 thoughts on “Understanding Employee Benefits”
I definitely take advantage of the all the benefits that I can!
And I have for quite some time! It does pay off 🙂