Benefits Packages for Shop Employees

by WOHe

A few years back, one of our key shop guys and his wife were
expecting their second child. A premature delivery ensued, and a
very difficult one at that their little boy was born with cerebral
palsy. Several years and several hundred thousands of medical bills
later, the little guy passed on peacefully and painlessly, thank

If our company had not had medical coverage in place for these
folks, it would have meant a huge financial burden for them.

This sad case is hopefully not the norm, but things like this do
happen. Because of it, part of working at a good shop is being able
to receive a measure of protection against calamity as well as
benefits beyond just drawing a paycheck.

What level of employee “perks” and benefits you decide to
provide is up to you. Just remember that your benefits package may
be one of the best ways to retain your most valuable asset your
people. It may be what will stop them from leaving just because
they could get a couple of dollars an hour more somewhere

Health and time
Do you provide health
benefits at your shop? A few years back, a survey in K&BDN
revealed that about half of the shops polled provided health
coverage probably a national average for trades in the construction
industry. Usually, the better and more established companies do
offer coverage, some with a dental package, as well.

Most shops that provide health insurance are facing spiraling
costs. In fact, many are turning from private plans to Health
Maintenance Organizations usually a less expensive option. Some
HMOs offer different levels of plans, with different associated
costs lower or higher co-payments for doctor visits or prescription

Still more shops are requiring larger employee contributions to
offset the costs of health coverage, with the employee often paying
up to 25% of the total. And, not all shops are willing to pay for
family members, since it’s now so costly.

How about paying your staff for holidays, such as the Fourth of
July or Christmas Day? Here again, the better shops will often give
their employees pay for national holidays. The average seems to run
around six or seven paid holidays a year. It’s up to you to decide
which ones. Perhaps National Arbor Day should be included for us

For this paid time off perk, and for other benefits, you may
want to consider some kind of waiting period, or probationary time,
before your employees are eligible to receive these “extras.” A
standard probationary period after a person’s hire date is 90

A few shops pay their employees some version of sick pay. This
can get complicated, with employees “banking” days that are not
actually taken, or simply calling in sick to take advantage of
excess sick days.
Perhaps a better way would be to call it all “personal paid time
off.” That way, your people can use it for sickness, vacation,
their kids’ field trips, whatever is needed.

Make sure you’re clear in your Employee Manual how you define
what it is you’re offering and how it works.
And, speaking of vacations, quite a number of shops offer paid
vacation time usually after a certain period of employment. In our
case, the employee gets six days after a year’s full-time
continuous employment, 12 days after five years, and 18 days after
10 years of service.

Here, you may also want to have a policy in place that requires
that people have to take the time off (or the money); in other
words, they cannot “bank” time.

Pensions and Perks
Pensions can be an affordable way to encourage your employees to
save part of their paycheck tax-free. Your people can sock away
pre-tax dollars at minimal cost to your company, and at no cost to

Ask your insurance broker if he or she can help you out. Much
depends on the size of your shop, but there are some excellent
options even for small one- and two-person shops. You can also
match the contributions your people make to their pension funds.
This is a huge perk for your employees, assuming you can afford

Other pension plans can have a profit-sharing component to them.
This is a good way to get money out to your people if you have the
occasional “banner” year.

It may be in the area of “other perks” that your shop’s true
benefits lie. Often, it’s how far you can go beyond the regular
comp package that represents the true value for your people.

One example might be working a nine-hour day, with a shorter day
on Friday, or even every other Friday off. You need to be aware of
state and federal regulations here, and it may take an employee
vote to ratify such a change without your shop being obligated to
pay overtime. But, more flexibility in your working hours can be a
big plus for employees.

The use of the shop for personal projects is a great perk, too.
Watch out for insurance requirements, and keep an eye out for
employees who try to make money from side projects. If that’s the
case, you should charge them for use of the shop.

Providing a truck, gas, tools those, too, can represent a
significant benefit to your people. This, if offered at all, should
probably be limited to key employees only.

Don’t overlook insurance as a benefit. Some shops provide some
kind of inexpensive life insurance coverage to their employees. It
may be available as an optional rider with your health coverage
package. There’s also disability insurance, although that is
usually rather expensive, especially for older employees. There are
other forms of insurance, too such as the kind that provides some
form of deferred compensation for your key people.

Then, there are the little things, such as company tee shirts.
It may not sound like much, but it’s relatively inexpensive,
appreciated by the lesser-paid shop folks, and it looks good to
potential clients.

Your benefits package essentially is representative of who you
are as a shop. If you have a fair and generous deal, your people
will stick around.

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