Helen Oswald

What types of employee benefits should you be looking for in new work?

Finding a job

What types of employee benefits should you be looking for in new work?

Artwork by: Aleksandra Zabnina

  • What are employee benefits?
  • Why are employee benefits important to companies?
  • 20 Different types of employee benefits
  • What types of employee benefits are perks?
  • Bonus - Ten questions to ask about employee benefits
  • Key takeaways

Wondering what types of employee benefits you should be looking for in a new job? Employee benefits have evolved from the traditional salary and pension plan to more complicated and unique package offerings. Here is our essential guide to better understand employee benefits.

Employee benefits have never been more important as job seekers look for opportunities that fit into their lifestyle. As employers recognize this trend, employee benefit packages are becoming more complicated than in the past when your salary and retirement were pretty much the full package. So, what types of employee benefits should you be looking for in new work?

Employee benefits can be made up of a multitude of things, some of which are required by law, others that are industry standard, and some that are perks or fringe benefits which may be a pleasant surprise! When you are deciding whether to accept a job offer, it’s important to have a good understanding of the different types of employee benefits that fall under these categories so you can make the right decision for your career.  

In this article we will explore:

  • What are employee benefits?

  • Why are employee benefits important?

  • 20 different types of employee benefits

  • Bonus - Ten benefits questions to ask an employer

What are employee benefits?

Employee benefits are privileges and non-monetary compensation that are offered over and above a regular salary. This usually includes medical insurance, life insurance, vision and dental coverage, retirement plans as well as many other ad-hoc “perks” that a company can decide to offer their workforce. These perks could include:

  • Learning and development benefits

  • Employee stock options and/or profit sharing

  • Health and wellness benefits

  • Volunteer opportunities

  • Remote/hybrid working

  • Flexible spending accounts (FSAs)

Clearly, if an employer is offering over and above the standard benefits packages then it can be an attractive proposition. Base pay and bonus structure added to benefits and compensation over time can be invaluable.

Why are employee benefits important to companies?

Whether you are a newly launched startup or an established organization, a great employee benefits program is well worth the investment. This is due to the fact that:

  • Companies can attract and retain key talent by offering great benefits.

  • Employees are attracted to organizations that offer amazing benefits, so it makes sense that they will accept a job and then stay with this type of company long term.

As a job seeker, finding such a company is gold. 

Statistical Insight


According to research by SHRM, the COVID-19 pandemic caused many employers to revisit and revise their employee benefits. The top five expanded employee benefits included:

Employee options for telework - 78%


Telemedicine services - 43%


Leave to care for children - 39%


Leave to care for adult family - 27%


Mental health services - 25%

20 Different types of employee benefits

There are three main types of employee benefits:

  • Benefits that are required by law

  • Benefits offered as an industry standard

  • Benefits given as a perk or fringe benefit

What types of employee benefits are required by law?

There are several employee benefits that employers are required to provide to their employees by law, so it’s good to know in advance what should be a standard. Employment laws do differ by country and state, but these are the specific federal requirements for the US:

  1. Social Security and Medicare contributions

  2. Workers compensation insurance: Covering employees who get sick or injured at work by covering the costs of medical care, rehabilitation, and loss of income

  3. Minimum wage and overtime pay

  4. Unemployment compensation contributions: Partial replacement of income is given to you for a short period in the event you involuntarily lose your job.

  5. Disability insurance (in some states)

  6. Employers with 50+ full-time employees

If you are working for a larger company with 50 or more full-time staff members, then your employer is required to provide:

  • Health insurance packages (under the Affordable Care Act)

  • Family and medical leave (under the Family Medical Leave Act)

What types of employee benefits are regarded as industry standards?

These types of employee benefits are not required by law, but you should expect to see them to some extent in an employee benefits package: 

2. Medical insurance The most common type of employee benefit is health or medical coverage. There isn’t a standard medical insurance package as this differs from provider to provider, so this is more of an umbrella term for:

  • Health insurance This typically covers costs related to doctors appointments, regular checkups, and basic medical procedures as well as emergency room visits and various surgical procedures. Prescription coverage can vary from employer to employer. 

Dental and vision insurance are often viewed as optional premiums so they won’t usually be included on a standard health insurance plan.

  • Vision insurance Vision insurance will cover annual eye tests, contributions to new glasses or contact lenses, and medically necessary eye surgeries. Check out the extent of the glasses and lens coverage, as you may have to pay out of your own pocket if you want a more stylish look or top of the range option.

  • Dental insurance Along with vision insurance, dental coverage ranks high in as one of the most important benefits rated by employees. Typical areas covered under dental insurance include:

  • Routine dental examinations

  • Dental cleaning

  • X-rays

  • Dental procedures (root canal, fillings and oral surgery)

Dental insurance won’t cover all costs. Usually the plans offer 100% cost coverage for preventative work and approximately 50% of all other dental services and procedures, but plans vary greatly.

Employers can also opt in to provide a health spending account for their employees, where money is taken directly from an employee’s pay (pre-tax) to be used for services that are not covered or only partially covered by a health plan. 

Each one is different and some can be complex, so be sure to get a clear explanation of what is provided.

 There are three types of these plans:

Health Savings Account (HSA)

Health Reimbursement Account (HRA)

Flexible Spending Account (FSA)

Who does the account belong to?

Employee

Employer

Employer

Does the employee need a high-deductible health plan?

Yes

No

No

Does the employer contribute?

Yes

No

Yes

Does the employee contribute?

Yes

Yes

Yes

Does the employee need to report this account on their tax return?

Yes

No

No

2. Family and medical leave (FMLA)

As mentioned earlier in this article, companies with 50+ full-time employees must provide Family and Medical Leave (FMLA) to any employee who qualifies. 

This permits eligible employees to take up to 12 working weeks of unpaid leave within a 12-month period to care for a new child, a sick family member, or to handle any family-related emergency without the potential of losing their job.

Expert Tip


Eligibility for FMLA is dependent on meeting the following three criteria:


Employee must have worked for the employer for at least 12 months


Employee must have worked at least 1,250 hours in the past 12 months


Employee must work for a company with at least 50 employees

3. Life insurance

Life insurance policies are a staple in terms of employee benefits. Many companies opt for a group-term life insurance policy, where the insurer provides an overarching contract that delivers life insurance coverage to all staff over a predetermined time period. Your life insurance policy will usually last as long as you work for your employer.

There are some different types of life insurance policies that you may come across:

  • Split-dollar life insurance - Employee and employer split the cost of insurance premiums, cash value, and death benefits from the life insurance policy.

  • Accident insurance - Covers death, injury, or paralysis while on business premises or traveling for business.

  • Group accidental death and dismemberment - A group-term life insurance policy that is specific to a situation where death or dismemberment occur.

4. Disability insurance

This insurance offers wage protection in the event of unforeseen circumstances that may prevent you from working for an extended period of time. You can have either short-term or long-term disability insurance coverage.

  • Short-term disability insurance covers injury or circumstances that can put an employee out of work for a short period of time, from a few weeks to a couple of months. This could be something like a broken limb, outpatient surgery requiring recovery time, or even pregnancy or maternity leave.

  • Long-term disability insurance covers disabilities that require a longer period of recovery, such as cancer, mental health issues, or medical issues requiring several surgeries. Time frames are usually around three to six months.

Expert Tip


There are currently six states (plus Puerto Rico) that require disability insurance to be provided by employers. If you reside in California, Hawaii, New Jersey, New York, Puerto Rico, or Rhode Island, move this from your “standard”  to your “must be offered” benefits list.

5. Retirement plans Many companies provide retirement plans, with 401k plans proving a popular retirement planning option. A matching 401K plan is attractive due to the fact that both employee and employer usually contribute. However this isn’t always the case, so it’s worth checking whether the potential employer will actually match or make contributions to your retirement fund.

Eligibility for pension plans will usually depend on the length of time you have been with the company, so there may be a stipulation that you can only join once you have worked for the company for a set time period. 

Here is a comparison of the features of both a 401k and traditional pension plan:

401(k)

Pension Plan

Popular option

Less common

Employees contribute and employers can match contributions fully or partially. Funds are only available once the employee reaches retirement age; a penalty is imposed if money is taken before then.

Employers give a guarantee they will pay a specific pension sum when an employee retires.

Employees can invest in funds (usually mutual funds and ETFs), and they are responsible for investment risk.

Employees cannot invest in funds and so assume no investment risk.

What types of employee benefits are perks?

Attracting and retaining top talent is a key driver to a company’s success, so to set themselves apart from the competition many organizations look to offer unique perks or benefits. 

While these perks are not required legally or as an industry standard, they are likely to be the next big thing in terms of employee benefits, so it’s worth looking out for them if you are debating whether to accept a job offer.

1. Wellness programs

Considering the amount of time we spend at work, it makes sense that an employer invests in their team's wellbeing. Corporate wellness programs can include employee assistance programs, access to therapists and crisis counselors, mental health assistance, healthy snacks at work, discounted gym memberships and much more.

Research has shown that investment in wellness programs is a win-win for both employers and employees in terms of employee happiness, wellbeing, productivity and cost savings.

Statistical Insight


Findings in a research study (University of California & Washington University) showed that employees participating in wellness programs secured an additional workday of productivity each month. A cost savings of $6 for every dollar spent on wellness programs in terms of healthcare and absenteeism was another positive outcome!

2. Stock options

An employee stock option is when an employee is given the right to buy company stock at a predetermined price. This is a popular option for startups looking to attract talent to their business or as part of larger corporations’ benefit packages.

Companies provide a vesting period for the shares, which is a specific period of time that the employee has before they can exercise the right to buy shares (usually one year). This means that employees are more likely to stay with the company and be incentivised to work hard so they can contribute to the company’s success.

If the company performs well, the stock may be worth a significant amount more than the employee actually pays for it. In this scenario, the employee will gain financially once they exercise the stock option, but there are tax implications in terms of receiving a large sum. Conversely, the company may not perform well so there is potential for loss too.

3. Education 

Employers can offer tuition reimbursement and student loan repayment programs to their employees. This can lessen a financial burden on an employee wanting to pursue studies as well as encourage career advancement which in turn benefits the employer. 

Employees are more likely to stay with the company that is funding their studies, and these studies will also bring additional value to the job itself.

4. Relocation and housing options

Relocation and housing options are typically offered as a financial incentive for employees looking to relocate for a job opportunity. This could also include partnering with local housing agencies to help out-of-state employees find temporary or permanent living space. 

Companies benefit as they have a wider pool of talent to draw from, and potential employees are more incentivised to move due to this financial support that minimizes the expense of relocation. 

5. Paid Time Off (PTO)

Paid time off (PTO) is an increasingly popular type of employee benefit that is a definite draw for a job seeker. This could be set up as 10 paid days off per year for a specific reason (sickness for example) or for whatever the employee decides. Typical reasons for using paid time off include:

  • Sick days

  • Vacation

  • Personal leave 

  • Volunteering or service days

Unlimited PTO is becoming a hot trend in employee benefits. This policy does not give a predetermined number of days off, so employees can take as many sick, vacation, personal, or mental health days as they need as long as their manager approves this time off. While there are risks for an employer offering this perk, it is actually proving to be a great recruiting and retention tool when managed properly.

6. Childcare costs

Childcare costs can be challenging for parents looking to join or return to the workforce and thus having to foot the bill for childcare providers. Employers offering contributions toward these high costs is a major plus for any employee. From the perspective of the employer, this also negates the need of rehiring to fill a role if an employee needs to leave due to childcare issues.

Statistical Insight


According to Census Bureau data, the average family with children spent $7,131 of their income in 2020 to pay for childcare. Childcare costs were 28% higher in 2020 than in 2010.

7. Remote or hybrid working

Remote working refers to any role that an employee does out of the office. Hybrid working is a mix of both working from home and in the office. For example, employees may work three days from home and two days in the office via the hybrid model. 

Remote working allows employees to work from literally anywhere, and this offers flexibility, saves time and money, and boosts motivation. This means maximized productivity for the employer too - so a true win-win!

Do

Don't

Maintain regular contact with your colleagues and office if you are remote working as this will make you feel part of the team. Tools like Zoom, MS Teams, Slack, and Workforce by Facebook will keep you in touch!

Work from just anywhere if you are a remote or hybrid worker. Having a routine and dedicated workspace is important, or try co-working spaces where you can network with other professionals. 

8. Commuting expenses

Employers can offer a contribution toward the cost of an employee’s daily commute as a fringe benefit, which can help ease the burden of travel costs to and from work. There are tax cost savings for employers too! The pre-tax commuter benefit offers employees the monthly cost of their commute deducted from pay before taxes, leading to more take-home pay for employees and reduced payroll taxes for employers. 

10. Company equipment Employers may offer company equipment to staff members depending on their role or industry. This could be a computer, cell phone, and/or tablet which enables the employee to complete their job. Equipment is usually handed back to the employer in the event of the staff member leaving the company.

Bonus - Ten questions to ask about employee benefits

When you have a job offer on the table, it’s good to know what types of employee benefits are on offer too in order to make an informed decision. If a benefit reduces or eliminates the cost of something you need (such as insurance), provides educational opportunities, or improves work/life balance then it’s a definite win!

Here are ten bonus questions to ask your potential employer so you can get a better sense of whether accepting the role is the right decision for you.

  1. Does the company offer medical insurance?

  2. What kind of coverage is there for dental, vision, and disability insurance?

  3. Does the company offer flexible spending accounts?

  4. What type of pension plan does the company offer?

  5. Does the company offer the opportunity to buy shares?

  6. Is there an employer match in terms of my 401K pension plan?

  7. Does the company pay for life insurance coverage or offer reduced premiums for employees?

  8. Are there any education opportunities or career development programs available with the company?

  9. Is it possible to work from home or another remote location some or all of the time?

  10. I was really impressed when I heard you offer workplace wellness programs such as [state what ‘perk’ is relevant to the role]. Are there any other great supplemental benefits that you currently provide?

Key takeaways

  1. When evaluating a job offer, you should factor in the benefits and compensation on the table as well as the salary and any bonuses you have been offered.

  2. While you are not going to be offered every benefit outlined in this article, those required by law and industry standard plus some “perks” is a perfect mix.

  3. Don’t be afraid to negotiate for a benefit that you feel is a deal breaker. If hybrid working is that deal breaker, sell this to the employer by explaining how beneficial this was to your previous employer and how productive you were.

Helen Oswald

Helen is an experienced content writer, with expertise in corporate law, business, sales, marketing and education. Prior to this, she worked in recruitment and human resources, so she has a strong sense of what recruiters are looking for in terms of a potential employee. Helen loves exploring new places, writing blogs of her travel across Europe and enjoying trips to the US, Thailand and the Middle East. She is an avid reader of fiction, poetry, self-help books and factual content and also enjoys creative writing in her spare time, including poetry and children’s fiction.

Share this article