Benefits are one part of the COMPENSATION AND BENEFITS package that an employee receives as a member of the workforce of a particular company. Total compensation costs to an employee include salary or wages, incentives, and benefits. During the time around World War II, the description was “fringe benefits,” because the benefits constituted a minor part of an employee’s compensation, but this has changed overtime. As the new millennium dawns, employee benefits can add an average 40 percent or more of salary (payroll) costs to the employer’s costs. In current economic times, shrinking of benefit packages through cost cutting, cost sharing, deductibles, and fewer benefits offered is occurring. Some major categories of benefits are discussed below, although the list of possibilities is broad, and employers have the flexibility to customize for their specific company needs. Benefit packages called CAFETERIA PLANs or flexible-benefit packages are common today. With these the company pays a certain dollar amount per pay period for the purchase of various benefits. Any coverage chosen above the company limit can be purchased by the employee at the company’s group rates. Thus the employee has a benefits package that is tailored to his or her needs. INSURANCE is a broad category that includes such items as hospital, medical, dental, vision, life, disability, and long-term care coverage. Each of these can include several choices as to level of coverage. For the medically related insurances, usually several options are offered involving a range of costs for employees. In general a higher deductible and co-pay are associated with a lower premium for the employee. Preferred Provider Organizations (PPOs) and HEALTH MAINTENANCE ORGANIZATIONS (HMOs) are common options offered by most employers today. RETIREMENT PLANs, if offered, are guaranteed when an employee becomes vested with a company. Vesting traditionally comes after a designated number of years of service, although it can be part of a phased-in system. For example, an employee can earn 20 percent per year with full vesting at five years or another time schedule designed by the company. Pension plans can be fully funded by the employer or be proportionately funded by both employer and employee. Some companies are using the option of a 401K program as their total pension benefit for employees. In this arrangement the employer contributes some dollar amount such as 30 or 50 cents per dollar contributed by the employee up to a certain limit—for instance, 6 percent of earnings. This is further capped by law as to the maximum amount that can be contributed to a 401K plan per year. It is possible and preferable for a company to offer both the traditional pension plan and a 401K plan. In many companies, “leave banks” have replaced the traditional separate programs for vacation, sick leave, and holidays. Commonly these forms of paid absence from work have been combined into a maximum number of days per year for the employee in his/her leave bank. Whether an employee uses these days for vacation, sickness, or other purposes is immaterial to the employer. The FAMILY AND MEDICAL LEAVE ACT is a separate issue. This is unpaid leave that, by law, an employee may take under certain circumstances and within certain specified guidelines. Finally, additional leave areas that are traditionally paid by the employer include jury duty, leave due to death of an immediate family member, and military service. A partial listing of other areas for benefits would include memberships in various clubs like Sam’s Club or country clubs; paid educational expenses; paid travel expenses; programs or assistance for child care and elder care; employee discounts; food services; use of a company car; membership in CREDIT UNIONs; and EMPLOYEE-ASSISTANCE PROGRAMS for such items as counseling, financial planning, or legal advice. Legally required benefits include SOCIAL SECURITY insurance, UNEMPLOYMENT compensation (most employees are eligible), and WORKERS’ COMPENSATION (compulsory in most states). Leanne McGrath