Business Contracts Kit For Dummies by Richard D. Harroch

Author:Richard D. Harroch
Language: eng
Format: epub
Publisher: Wiley

Make sure to integrate your program into your other benefit programs so that your total benefits package is attractive and motivates employees.

Bonuses

Sometimes the greatest motivational tool is a cash bonus for a job well done when the company has had a good year. Or consider awarding extra vacation time, extra personal leave time, or a gift. Even small, unexpected bonuses or gifts can be real morale boosters for employees.

Cafeteria Plans

Cafeteria Plans are employer-sponsored benefit packages that offer employees a choice between taking cash and receiving qualified benefits (such as accident and health coverage, group-term life insurance coverage, or coverage under a dependent care program). No amount is included in a participant’s income if she chooses among the plan’s benefits; however, if a participant chooses cash, it can be included in gross income as compensation. If the employee chooses qualified benefits, they are excludable from taxes to the extent allowed by law.

Cafeteria Plans are especially popular among employees because of the flexibility they provide. For example, if one spouse is already working at another company that provides health coverage, the employee can choose to instead obtain group-term life insurance, dental or vision coverage, or even cash.

A human resources professional or labor law attorney should design any Cafeteria Plan to make sure that it complies with all the legal requirements.

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