Do you get any cool perks as part of your job? One of the cool perks at my new job is a free happy hour each month with free food and free drinks, which was light years better than any perks I had at my old job. But a free happy hour each month doesn’t compare with some of the ones highlighted on a list by The Independent. If you worked at New Belgium Brewing in Ft. Collins, Colorado, you get a free case of beer a week, a free bike after one year of service, and after five you get a trip to Belgium!
Employees of marketing firm Brogan & Partners in Michigan go on a mystery trip each year and at Rockville, Maryland business publisher UCG, the thousand employees and significant others go on an all-expenses-paid long weekend every five-years. Chipotle gives $30/month for vet insurance and insurance company Acuity has a stocked pond (keep what you catch) and $100 towards Weight Watchers. Free vacations? Free beer? Those are some pretty sweet perks.
What is a highly compensated employee
No matter what you make, you probably don’t feel like a highly compensated employee (what’s that old saying – happiness is making a dollar more than your wife’s sister’s husband?) But you might just be one. Whether or not you’re a highly compensated employee has an impact on your employer’s retirement benefits package. The retirement program has to prove that there is no bias towards highly compensated employees or it could lose the tax breaks it gets for having a retirement package.
A highly compensated employee is someone who owns more than a 5% interest in your business at any time during the year. Or, they could be considered highly compensated if they, in the preceding year, received compensation in excess of a specified amount (see the list below) and, if you choose to add these criteria, be in the top 20% of employees when ranked by compensation.
Highly compensated employee compensation limits:
- 2016-2017: $100,000
- 2018: $105,000
- 2019-2020: $110,00
So if you earned more than $110,000 last year (2018) then you could be considered a highly compensated employee. Congratulations!
The bias becomes a factor because many companies contribute to a defined benefit or defined contribution plan based on the employee’s salary. Those earning more will naturally get a bigger benefit from the employer’s retirement package and the IRS wants to avoid this bias towards more richly compensated employees. They compare the amount the company contributes to the pool for highly compensated employees to the amount the company contributes to the remaining employees. if the difference is too great, then the company could lose its tax benefits.
OK so what? If you are a highly compensated employee, you might be limited in how much you can contribute to your retirement plans. While the typical 401(k) plan limits employee contributions at $16,500, your employer may drop that limit to account for potential pension (defined benefit) contributions they are making on your behalf because of your salary.
Online businesses like SimplePayday are reporting that they are offering staff higher wages and more benefits than this time last year – due to market demand and an increase in competition for the best staff. The scope for online businesses and in particular online money lenders to offer more cash for the right employees is based on a small group of skilled individuals operating within the industry.
One-way employers are luring in new prospective candidates to the field are the employee perks mentioned earlier.
Employee Perks You Should be Getting and Using
U.S. workers have never been good at taking vacations, one of the best “perks” of working, if you can call a few days off during a year a perk rather than a right (the article discusses how little vacation days we get compared to Europeans but how it’s self-inflicted). When the economy tanked, many workers took even less time off for fear of losing their jobs. It’s a normal reaction, if there need to be cuts, it’s better to fire someone who is less productive and folks on vacation aren’t very productive (since they’re not at work); though I suspect few employers think that way.
That being said, while we may not be taking as many vacations days, there are still many employee perks that can be safely taken advantage of without fear of losing your job. These different perks may not be available to everyone but they’re available to most, depending on the size of your employer, and should be given serious consideration if you aren’t taking advantage of them.
If your employer offers a 401(k) plan with a contribution match and you aren’t contributing, you’re leaving money on the table. At my first job, my employer would match 100% of your contribution up to 2% of your salary and then 50% on the next 2%. So if you contributed 4% of your salary towards your 401(k), the company would kick in 3%. That’s a 3% raise, which is about what we got each year, right off the bat. Not only do you get free money, which would vested immediately in that plan (not as common), but you also get tax benefits for contributing to your 401(k). 401(k) contributions are tax deductible and since they usually come out of your paycheck, you get the benefit almost immediately.
I have an MBA that was almost entirely paid for by my first two employers. I started the program at my first job, which paid for any class I took towards a higher degree as long as I got a B or higher, and completed it at my second, which had the same reimbursement program but I had to pay some back if I left before a year and a half. I forget how much classes were at Johns Hopkins, where I got an MBA, but it was easily several thousand dollars a year in benefits that I wouldn’t have received if I didn’t start taking classes. Unlike the 401(k), this one costs a lot of your time.
If you get health insurance through your employer, one of the most overlooked perks are the regular routine visits you get. With dental insurance, you can visit your dentist for routine cleanings. I go twice a year and while no one really enjoys the dentist, going that often (all covered by insurance) make each visit faster and less painful. With medical coverage, you can probably get an annual exam and other preventative procedures done for free or a small co-pay depending on your age. Regular routine visits can ensure any health issues can be identified and remedied early.