United States
Employee benefits in the United States might include relocation assistance; medical, prescription, vision and dental plans; health and dependent care flexible spending accounts; retirement benefit plans (pension, 401(k), 403(b)); group-term life and long term care insurance plans; legal assistance plans; adoption assistance; child care benefits and transportation benefits. Benefits may also include formal or informal employee discount programs that grant workers access to specialized offerings from local and regional vendors (e.g., movies and theme park tickets, wellness programs, discounted shopping, hotels and resorts, and so on). Companies who offer these types of work-life perqs seek to raise employee satisfaction, corporate loyalty, and worker retention by providing valuable benefits that go beyond a base salary figure.
Some fringe benefits (for example, accident and health plans, and group-term life insurance coverage up to US$50,000) may be excluded from the employee's gross income and, therefore, are not subject to federal income tax in the United States. Some function as tax shelters (for example, flexible spending, 401(k) or 403(b) accounts). Fringe benefits are also thought of as the costs of keeping employees other than salary. These benefit rates are typically calculated using fixed percentages that vary depending on the employee’s classification and often change from year to year.
Normally, employer-provided benefits are tax-deductible to the employer and non-taxable to the employee. The exception to the general rule includes certain executive benefits (e.g. golden handshake and golden parachute plans).
American corporations may also offer cafeteria plans to their employees. These plans would offer a menu and level of benefits for employees to choose from. In most instances, these plans are funded by both the employees and by the employer(s). The portion paid by the employees is deducted from their gross pay before federal and state taxes are applied. Some benefits would still be subject to the Federal Insurance Contributions Act tax (FICA), such as 401(k) and 403(b) contributions; however, health premiums, some life premiums, and contributions to flexible spending accounts are exempt from FICA.
If certain conditions are met, employer provided meals and lodging may be excluded from an employee's gross income. If meals are furnished (1) by the employer; (2) for the employer's convenience; and (3) provided on the business premises of the employer they may be excluded from the employee's gross income per section 119(a). In addition, lodging furnished by the employer for its convenience on the business premise of the employer (which the employee is required to accept as a condition of employment) is also excluded from gross income. Importantly, section 119(a) only applies to meals or lodging furnished "in kind." Therefore, cash allowances for meals or lodging received by an employee are included in gross income.
The term "fringe benefits" was coined by the War Labor Board during World War II to describe the various indirect benefits which industry had devised to attract and retain labor when direct wage increases were prohibited.
Employee benefits provided through ERISA are not subject to state-level insurance regulation like most insurance contracts, but employee benefit products provided through insurance contracts are regulated at the state level. However, ERISA does not generally apply to plans by governmental entities, churches for their employees, and some other situations.
Read more about this topic: Employee Benefit
Famous quotes related to united states:
“The white American man makes the white American woman maybe not superfluous but just a little kind of decoration. Not really important to turning around the wheels of the state. Well the black American woman has never been able to feel that way. No black American man at any time in our history in the United States has been able to feel that he didn’t need that black woman right against him, shoulder to shoulder—in that cotton field, on the auction block, in the ghetto, wherever.”
—Maya Angelou (b. 1928)
“I thought it altogether proper that I should take a brief furlough from official duties at Washington to mingle with you here to-day as a comrade, because every President of the United States must realize that the strength of the Government, its defence in war, the army that is to muster under its banner when our Nation is assailed, is to be found here in the masses of our people.”
—Benjamin Harrison (1833–1901)
“Ethnic life in the United States has become a sort of contest like baseball in which the blacks are always the Chicago Cubs.”
—Ishmael Reed (b. 1938)
“Steal away and stay away.
Don’t join too many gangs. Join few if any.
Join the United States and join the family
But not much in between unless a college.”
—Robert Frost (1874–1963)
“Greece is a sort of American vassal; the Netherlands is the country of American bases that grow like tulip bulbs; Cuba is the main sugar plantation of the American monopolies; Turkey is prepared to kow-tow before any United States pro-consul and Canada is the boring second fiddle in the American symphony.”
—Andrei Andreyevich Gromyko (1909–1989)