Non wage compensations that are provided to the employees are called fringe benefits. These benefits can be like housing, insurance policies like health insurance, dental insurance, life insurance, group insurance etc.
Fringe benefits can be also given in the form of retirement benefits. If the employee is a senior position, such an employee may also be given a car, lunches, vacations, executive benefits like golden handshake etc.
The purpose of the benefits is to increase the economic security of employees. Fringe benefits can also be considered as a labor policy as fringe benefits is a way to attract employees and to motivate them to do their work with more interest, dedication and responsibility. The efficiency and productivity power of the employee increases.
These are the reasons for which most of the governmental organizations and multinational companies provide their employees with multiple fringe benefits. The only disadvantage that has been seen is that in some countries for example the UK these benefits are often taxed at the individual’s normal tax rate, which can prove expensive if there is no financial advantage to the individual from the benefit
The minimum hourly, daily or monthly salary that an employee gets is called the minimum wage. Many people are in favor of minimum wage whereas many are against this. Supporters of the minimum wage say that it prevents the exploitation of workers. Opponents say that it causes inflation.