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Employee Stock Ownership Plans. Some companies offer employees a partial ownership interest in the company through an employee’s stock ownership plan (“ESOP”) . Here’s how it works: the employer contributes shares of the company’s stock into an account. The shares are allocated to individual employees. When the employee leaves the company, they receive their stock, which the company must buy back from the employee at fair market value . ESOPs are built around the belief that when an employee has an ownership interest in a company, they are motivated to do a good job. Through ESOPs, a lot of companies, such as Round Table Pizza and Kelly Moore Paints, are 100% owned by employees.
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I’ll Take the ESOP Department of Labor studies show that ESOPs
usually outperform standard 401(k) retirement plans.
Flexible Spending Account (FSA). A Flexible Spending Account (FSA) is a special account into which an employee may contribute up to $2550 of their their salary each year in pretax dollars . The account can be used by the employee for a variety of purposes such as childcare expenses or medical costs not covered by insurance. It’s also called a cafeteria plan because it allows employees to choose from among a variety of different uses for the money. The money is deducted in pretax dollars which has the effect of lowering the employee's income taxes. Perks! Some employers offer additional perks . These are 100% optional and vary by industry. In industries with a tight labor market, like the tech industry, employers must go all-out to compete for talent. The perks can get pretty awesome: Paid Family Leave. This is similar to the legally required Family Medical Leave Act, except that the employee continues to collect a paycheck while they are on leave. Also, the employer may offer a longer leave period, or a combination of paid and unpaid leave. For example, an employee may combine 12 weeks of paid leave with 8 or more weeks of unpaid leave. This is particularly popular as a means of extending maternity or paternity leave. Tuition Assistance. Some employers offer education benefits to their employees in the form of a tuition payment/reimbursement arrangement . For example, Starbucks reimburses their employees' tuition for attending college through an online program. Some employers even pay for their employees to attend graduate school to obtain advanced degrees. Public Service Loan Forgiveness (PSLF). This benefit may be available to an employee working in public service and government such as state and municipal government agencies, school districts, public hospitals, and non-profit organizations. PSLF provides that, under limited circumstances, a student loan may be forgiven in exchange for public service . Generally, an employee must have made 120 payments (about 10 years) on the student loan before the remaining balance will be forgiven. Flextime. Flextime is an increasingly popular perk that allows employees to work a schedule that is an alternative to the traditional 9 to 5, 40-hour work week. Flextime employees may vary the times they start and finish their workday as long as they maintain a set number of hours during the workweek . Some companies allow employees to request a flexible schedule for personal reasons such as having young children at home or to avoid a rush hour commute. PRODUCT PREVIEW
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Chapter 4 | Pay. It’s More Than a Salary
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