Do You Have to Offer Everyone Identical Benefits?
BY Suzanne Lucas
Everything doesn't need to be equal, but it does need to be fair.
Dear Evil HR Lady,
I have two exempt employees, who currently have the same benefits (vacation pay, sick pay, retirement). One employee is requesting the ability to buy an additional week of vacation.
I'm happy to allow her to do this, but this then brought up a question for me if it wouldn't simply make more sense moving forward to offer her an additional week of vacation and reduce her salary in general to offset that cost. This would then make the benefits no longer equal (note: Both employees became full time and eligible for vacation at the same time).
So the question is: Do I need to offer the exact same benefits to all salaried employees that are at the same level in company hierarchy?
Fortunately, everything does not have to be equal. People negotiate different salaries and benefits all the time. And I agree with you that simply reducing the overall salary and adding on a week of vacation is the best way to go about it.
I'm guessing you're concerned that this drop in salary will affect other areas, such as the amount contributed towards retirement. Well, that's fine. You just need to explain what the consequences of this deal are.
What you cannot do is offer different salaries and benefits based on things such as race or gender. You can do them differently based on performance, experience, or just being willing to ask. After all, not everybody prefers a lower salary in exchange for more vacation, just as some people like to telecommute and other people do not.
What I do recommend, however, is that you make this an official policy that is available to all similarly situated employees. That is, if Jane is allowed to purchase an extra week of vacation, John should be allowed to as well. Then it becomes all about the employee's choice and there are no worries about fairness.
Personally, I'd like to see more companies offer such things. Vacation can be a valuable negotiating tool when hiring. Vacation also allows people much needed downtime that can make them better workers when they are at work. But some people prefer money over time off.
In fact, some companies offer vacation plans in which employees can either buy or sell vacation days. That is, your policy allows for two weeks vacation, standard. An employee then has the option to use the two weeks vacation, buy a third week of vacation, or sell some of the two weeks in exchange for an increased paycheck. Flexibility is an awesome retention and recruitment tool.