The Distribution of Fringe Benefits

fringe benefits or non-wage compensations paid to employees consist of a number of types of monetary benefits, which an employee is entitled to receive as part of his employment. The list of fringe benefits available to an employee includes his entitlement to paid vacations, holidays, bonuses, health and medical insurance, childcare benefits, child care, paid relocation assistance, paid time off, retirement benefits, prorated retirement pay, etc. These are just some of the fringe benefits that an employee is entitled to receive as a regular employee of an organization. However, there are also many other fringe benefits, which an employee can become entitled to when he becomes an employer. These other fringe benefits include profit sharing, stock options, deferred commission, etc.

fringe benefits

Fringe benefits in the form include various kinds of non-wage compensations provided to employees as well as their normal wages or salaries in addition to various other forms of advantage such as paid time off, holiday bonuses, etc. An employee can become entitled to these fringe benefits by becoming an employer. For the employers, there are two main ways in which these benefits can be channeled – directly or indirectly.

In terms of direct payroll distribution, employers generally give all employees who become employees automatic fringe benefits as per the rules set forth by the company. Usually, this distribution takes place when an employee has reached his / her first anniversary with the company, at which point the company would issue a card, a cheque or a voucher, etc. In order to make employees aware of their inclusion in this distribution, the employer would issue a notice regarding the distribution of fringe benefits. This notice may be in the form of a formal written notification, oral communication or a leaflet that is given to all employees. It is important for both the employee and the employer to keep track of the distribution schedule, especially since some companies do not follow this practice.

The second means through which fringe benefits can be distributed are indirectly. This occurs through the various forms of incentives provided to employees. These incentives may come in the form of special discounts on merchandise, free food items, free services such as cleaning, laundry, hair care, etc. or any other similar reward or benefit that would increase an employee’s profitability.

This system of indirect distribution is often abused by some employers who resort to cheating the system. There are two distinct ways in which an employee could be cheated if he or she does not follow the rules laid down by their employer. In the first instance, an employee can be tricked into buying goods that he or she does not need. The other could involve an employer diverting benefits meant for employees to himself or herself, thereby not being taxed on them. Some employers take advantage of their employees’ ignorance about the rules.

With regards to the first instance, this normally takes place if an employer uses deception or dishonesty to get an employee to buy goods that he or she does not actually need. This could include a ploy to get an employee to purchase more benefits than he actually needs or an employer promising an attractive incentive package but failing to deliver on it. In the latter instance, an employee could be forced to purchase goods or services that he or she does not want or need. Fringe benefits are meant to provide employees with a way to properly distribute their retirement and health care benefits to their dependents so as not to leave them high and dry.

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