Job Benefits

It isn’t uncommon for employers to provide additional insurance options, such as…

• Dental: coverage for routine checkups, preventative care, and larger dental procedures.
• Vision: supplements the cost of eye exams, glasses, and contact lenses.
• Disability: replaces part of your income if you become too sick or injured to work.
• Life: provides a payment to your loved ones if you die.

The downside of getting insurance through your employer is that you may be forced to go through a company that doesn’t suit all your preferences or choose between the available plans, rather than selecting the specific coverage you want.

PTO

What exactly is PTO? Well, PTO grants employees access to fully compensated vacation, personal, and sick leave. And since everyone needs to take a day off of work here and there, and maybe even some time each year for a much-needed vacations, PTO ranks among the most sought-after benefits for job seekers and new hires.

The specific way that PTO works varies from company to company, but most often you’ll have a set pool of time that you can draw from when you take time off throughout the year. At some jobs, you’re granted that full pool from day one, at others you earn more PTO the longer you work there. Some companies even offer “unlimited PTO.” But beware, these policies can be deceptive as they sometimes leave workers feeling compelled to spend less, rather than more, time away from work.

Some companies offer other forms of PTO or extended leave such as maternity or paternity leave when you have a baby, a sabbatical (extended break from work for personal or professional purposes), sick leave, and more. It’s not uncommon for companies to also give their employees paid time off on holidays that doesn’t impact their PTO hours.

Retirement

Many employers help their employees save toward the day they stop working by providing employer-sponsored retirement plans. These plans usually fall into one of two categories. First is a defined benefit plan, which provides retirees with a specific amount of money each month. The traditional example of a defined benefit plan is a pension. With a pension, the employer, rather than the employee, takes on the risk of investment as they handle how the funds are invested. Employees are essentially guaranteed a certain amount of money upon retirement, barring extreme circumstances. Contributions for pensions may be entirely made by the employer or shared with the employee. Pensions are less common than they used to be but still exist for some state and local government employees, teachers, public service workers, and other select companies.

The second, and more common, type of employer-sponsored retirement plan is a defined contribution plan, such as a 401(k). Under these plans, employees are not promised a set benefit at retirement, but instead, contribute to an individual account with investments they control. The account grows over the years, and then it’s up to the employee (and the rules of the account) to decide how to distribute it at retirement.

One powerful benefit offered by some companies is a contribution match up to a certain percentage. For example, let’s say a company offers a 5% match. If an employee contributes 5% of their salary to their retirement account (let’s say $1,500), the employer also contributes 5% (another $1,500), meaning the full contribution to the employee’s retirement account is 10% ($3,000). Employer matches never go above the set cap and only go as high as the employee contributes. So, if the employee contributes 6%, the employer still only contributes their match of 5%, and if the employee only contributes 3%, the employer would also contribute 3%.

There are also more complicated match formulas that won’t necessarily always match the employee’s contribution dollar for dollar. As an example, let’s say a company matches 100% up to 3% of the employee’s contribution and 50% up to the remaining 5%. So, with the same numbers from above, if the employee contributed the full 5% of $1,500, the employer would match the first 3% ($900) of that contribution dollar for dollar. The remaining 2% ($600) they match 50% ($300), meaning the employer’s full contribution is $1,200, rather than $1,500. As you can see, it’s wise to always at least contribute up to your employer match, if you have one, otherwise you’re leaving free money on the table.

Some employer matches don’t belong to the employee until they vest. This happens when the employee has worked at the company for a specified amount of time. If the employee leaves the company before that time, they may forfeit all or part of the money the employer matched. Vesting often happens in sections, meaning the employee will own a certain percentage once they pass predetermined milestones. As an example, an employer’s match may vest 80% once the employee has worked at the company for 3 years, 90% after 5 years, and 100% after 6. This only applies to employer matches, employees always own 100% of what they contribute toward retirement.

Quality of Life

There are many employer-provided benefits that are meant to improve employee quality of life by adding small perks or simplifying stressors. These can range from a stocked snack kitchen to on-site daycare to professional development opportunities to a transportation or relocation allowance. Ever since the Covid-19 pandemic forced many jobs to adapt to new working situations, benefits related to flexibility and work-life balance moved to the top of many job-seekers’ wish lists and extended into many more industries. Remote work opportunities, for example, are now much more common than they used to be.

Quality of life benefits can be a big help to employees, but it’s important to be careful that you aren’t lured in by flashy, “perky” benefits at the expense of things like a sustainable salary or robust insurance coverage. You should consider all parts of your compensation package and decide what’s non-negotiable and what’s an added benefit, but not a necessity.