Common Workplace Benefits

Many jobs not only pay you directly for the work that you do, but also provide other cash and non-cash benefits.  Employers offer cash and non-cash benefits as incentives to stay in their current position, rather than looking for a job with a new company. Taking full advantage of employer-sponsored benefits can save you money each month.

What are some common workplace benefits and how do they work?

Paid Time Off:  Paid time off may include holidays, sick days, personal days, and vacation days.  Employers continue to pay employees their wages even though they are not working.  While most unused paid time off stays with the employer when an employee leaves a job, sometimes employees are able to “cash out” unused vacation time and convert it to pay.  Likewise, most paid time off is forfeited by the employee if he or she decides not to use it, with the exception of vacation time. Sometimes vacation time up to a limit of hours may be “rolled over” to the next calendar year.

Insurance:  Employers may offer health, life, and/or disability insurance to their workers.  These insurances are generally less expensive for the worker than having to buy them in the open marketplace because employers are able to negotiate “group plans” on behalf of their workers.  Furthermore, employers may choose to pay for some or all of their employees’ insurance premiums, leading to a great cost savings to workers.

Retirement Plans:  Employers may provide defined benefit plans (pensions) or defined contribution plans (401Ks) to their workers.  Years ago employees of large corporations could count on pensions to pay most or all of their expenses in retirement, but today people rarely see pensions in their benefit packages.  Defined contribution plans, also called 401K plans, are more common.  These plans enable workers to take part of their pre-tax wages and invest them in a special account.  The employer might even match the employee’s contributions up to a certain amount.  The employee’s contributions and the employer’s match, in addition to all of the earnings from this principal, are available at the time of retirement.