Category Archives: Human Resources

Tax-Free Employee Fringe Benefits

fringe_benefitsEmployer-provided fringe benefits can be an important part of an overall compensation package. Highly valued by employees, benefits are even more prized when they fall under an exception from being taxed. Below is a generalized, non-inclusive listing of some of the most commonly provided tax-free benefits. In most cases, they are not subject to social security or FUTA tax as well.

• Accident or health insurance premiums, including contributions to health savings accounts (HSAs)
• Achievement awards—property given for length of service or safety achievement
• Personal use of a company-provided cell phone provided primarily for business use
• Holiday gifts (non-cash) with a nominal fair market value
• Occasional parties or picnics for employees
• Coffee, doughnuts, or soft drinks provided on the employer’s premises
• Occasional meals or meal money provided to enable the employee to work overtime
• Group term-life insurance (limited)
• Educational assistance up to $ 5,250 under a formal written plan
• Reimbursement of deductible moving expenses
• Employee discounts on property or services you offer to your customers
• Qualified transportation benefits, including transit passes or qualified parking
• Reimbursed job-related expenses incurred by an employee under an accountable plan
• Contributions to qualified retirement plans
• Advice concerning the above retirement plan, and retirement planning in general

Note that cash and cash-equivalent fringe benefits (such as gift cards, prepaid cards, etc), no matter how small, are never excludable. They must always be included in the employee’s payroll amounts.

Many of the above items are tax-exempt only if paid under a formal, written plan which does not discriminate. Also, benefits are often limited for company owners, partners, and highly compensated employees.

If any of the above might be a useful addition to your company’s compensation package, be sure to contact your WVCO tax pro for details in implementing the benefit.

By: George Monger, Senior Manager

Employee Vacations

Beach_BottleWhen it comes to employee benefits, paid vacation time is a favorite. Although not legally required in the U.S. (as it is in most other economically advanced countries), most employers — about 77% of businesses in the private sector — provide their employees with paid vacation time.*

What’s in it for you?

But what is the business impact of letting your employees go on vacation? Isn’t it bad, especially for small businesses, when key employees are gone for a week or longer? Actually, it isn’t. While it may be disruptive in the short term, providing paid vacation time can benefit employers. In a recent survey of human resources professionals, a large majority ranked taking vacation as very or extremely important for employee performance (94%), morale (92%), wellness (92%), productivity (90%), a positive culture (90%) and employee retention (88%).**

Survival strategies

Vacations may be a win-win, but you still need to minimize disruption and maintain productivity when employees are away. Here are a few tips:

• If you don’t already have one, formalize a vacation policy that spells out how to request vacation time, how many employees may be gone at the same time, how disputes will be handled, etc.

• Create a master calendar and record all approved time off.

• Cross-train employees; try to have at least two people trained to cover each job.

• Have employees update their job descriptions and provide access to any passwords or other information that may be needed during their absence.

• Prior to leaving, make sure employees compose “away” messages for voicemail and e-mail and let key customers and contacts know how long they will be gone.

Benefits are the bottom line

A comprehensive, competitive benefits package is the best way to attract and retain employees. Top prospects want health insurance, voluntary benefits and a retirement plan in addition to vacation time. How do your benefits stack up? Your financial professional knows the marketplace and can provide guidance to help you make your benefits package more competitive.

No-Vacation Nation Revisited, Center for Economic and Policy Research, May 2013

** Vacation’s Impact on the Workplace, SHRM/U.S. Travel Association, November 12, 2013

How To Win at the Hiring Game

shutterstock_132759020Finding the best candidate to hire is often costly and time consuming. But, if your new hire turns into a loyal, hardworking, long-term employee, your investment may be worth every cent and minute.

Locate candidates – How do you find good people? In the past, people who were job hunting would look in the “help wanted” section of the newspaper or go from store to store filling out applications. Today, most people use a computer and a mouse and search the Internet for jobs. So if you’re not posting your openings on online job boards and industry blogs and websites, you may be missing talented candidates. Note: Running classified ads may still be a good way to reach out (especially to fill jobs requiring local candidates) since many local newspapers also have an online job board for posting classifieds.

Another way to attract candidates is to add a recruiting page to your website. In addition to posting job openings, you can use the page to attract qualified candidates by highlighting the benefits of working for your company.

And last, but certainly not least, you can use social media to announce openings and solicit job applicants. There’s no better way to reach a large number of people almost instantaneously.

Make an attractive offer – If you’re hoping to hire top talent, you’ll want to make sure the benefits you offer are competitive — or better. According to government analysis of private industry data, 85% of full-time workers had access to employer-provided medical care and 74% had access to a retirement plan.*

In a recent survey** of benefit decision makers for small, medium and large companies, almost half said they believe offering health insurance will become more important in attracting and retaining valued employees over the next five years.

Keep employees on board – Once you’ve assembled a group of valuable employees, an attractive and competitive benefit package will help ensure they stay. Your financial professional can provide insights and help you review your firm’s benefit package for cost efficiency and competitiveness.

* Bureau of Labor Statistics, March 2013

** The Role of Employer Benefits in Building a Competitive Workplace, ADP Research InstituteSM, 2013

Lighten the Employee Evaluation Load

Performance ReviewManagers and employees often dread annual assessments. But the process doesn’t have to be so difficult for everyone involved. Here are some options that might help give your organization’s entire staff a break and make the chore easier and more beneficial.

If evaluations are done near the anniversary of the date each person was hired, it can be a never-ending process. As a result, managers sometimes take shortcuts and overlook strengths, weaknesses and accomplishments that are critical to an employee’s future.

There’s another approach that might work better for your company. Instead of scrambling to prepare evaluations for the anniversary of each employee’s hire date, consider evaluating all your employees at the same time every year.

The advantages:

  • The appraisal process becomes an annual, high-priority project instead of a task that’s squeezed into a long list of duties. You can schedule research and preparation time for managers, just as you do with other important projects throughout the year.
  • You can manage the company budget better because pay raises that accompany appraisals occur at the same time.
  • With sufficient time to assess all subordinates at once, managers might be more likely to consider an entire year’s performance and less likely to be swayed by recent events.
  • Managers can give equal consideration to all staff members instead of concentrating on problem performers or standouts, who often receive an undue share of attention.

Evaluating employees at one time is certainly labor intensive. And you have to tailor appraisals for those who join the firm just before the evaluation period.

But in the end, you might wind up with better appraisals, a more satisfied workforce and better cash management.

Keep in mind: Employee evaluations should also measure the performance of your company. Suppose a large percentage of your employees are getting high scores in their evaluations. Presumably, your bottom line should be increasing. If not, it might be time to take a second look at your management philosophy, not to mention your performance appraisal methods.

Staff performance is the key to productivity and profits. Analyze employee evaluations and compare the analysis against your bottom line. This alerts you to trends, weaknesses and blind spots in your organization. It’s a good way to ensure that the staff and the company are moving in the same direction — up.

A Little Employee Appreciation Goes A Long Way

What’s the number one reason that employees stay with an organization? Usually, it is simply because they enjoy working with their supervisors, according to numerous studies. An employee who doesn’t feel appreciated may start looking for another job – and that can cost your company a small fortune. Don’t underestimate the value of saying “thank you” and “good job” to staff members.

Building good relationships between staff members and their bosses can pay off handsomely for your company. In fact, some experts estimate that the cost of replacing an employee ranges from 29 to 46 percent of the person’s salary.


The key to lowering your turnover rate is to tell employees when they’ve done a good job and let them know the company values them. While there are many ways to encourage a company culture that appreciates talent, here are seven effective suggestions:

Run profiles. Use your company newsletter to run brief stories about key employees. Make sure you include the people in the mail room to top management. Outline their accomplishments at work, as well as their personal interests or hobbies. Include a photo so everyone can recognize them.

Send memos. If someone from another department pitched in on an important project, thank the employee in a memo or e-mail and send a copy to his or her supervisor.

Put it in writing. Urge managers and supervisors to send hand-written thank you notes to individual staff members at least once a year. The notes should be thoughtful, with details of the employee’s contributions to the company and the department. A hand-written thank you makes a bigger impression than e-mail or typed letters.

Give praise in public. Acknowledge your staff members’ achievements in a public forum, such as a staff meeting. Or hold semi-annual ceremonies to publicly reward employees for their achievements. Be sure to recognize all kinds of excellence, from the receptionist who is complimented by customers to the janitor who goes the extra mile.

Take them to lunch. Provide a budget that supervisors can tap into once a month to take an outstanding employee to lunch. This helps develop relationships and a $20 lunch goes a long way toward making employees feel appreciated.

Tailor your appreciation. There’s no one way to pay tribute to your best employees. You can recognize outstanding staff members with a formal “Employee of the Month” program or use a less formal system such as a face-to-face compliment.

Promote two-way communication. Good managers spend more time listening than talking. Maintain an open-door policy. Employees who feel comfortable communicating with you will feel valued and be more inspired to deliver their best work. Get to know your team. Frequent interaction with your staff allows you to get to know each employee on a personal level.