5015 Fringe Benefits

Fringe benefits are the expenses for employment benefits that an employee receives in addition to his or her base salaries and wages. Fringe benefits include payments associated with the employee's labor that do not arise from the performance of work, but still arise from the employment relationship. Fringe benefits can be divided into the following four categories:

1. Employment Taxes: federal, Medicare, and Social Security taxes.
2. Health and Welfare Expenses: medical and dental insurance plans (to include hospital, surgical, and pharmaceutical plans); short- term disability and life insurance plans; workers’ compensation or Federal Employees Liability Act Contribution; and unemployment plans.
3. Retirement Costs/Pension Plans: pension plans, long-term disability plans, and other post employment benefits (OPEB).
4. Other Fringe Benefits: uniform and work clothing; tool allowances; employee and family transit passes; reimbursements for moving and education; assistance for dependent care, childcare, and adoption; employee discounts; and other fringe benefits not described in the categories listed above.

Services are the labor and other work provided by outside organizations for fees and related expenses. Outside organizations may be private companies or public entities. The agency reports work done by personnel within the reporting unit as salaries and wages and fringe benefits. For example, if the reporting unit is a city, then transit-related work done by city employees, even those outside the transit division, is reported as salaries and wages and fringe benefits, not services. Services provided by an outside organization are usually procured as a substitute for in-house employee labor, except in the case of independent audits, which could not be performed by employees. Agencies usually substitute services for in-house labor because the skills offered by the outside organization are needed for only a short period of time or internal staff does not have the requisite skills. This object class includes all costs that are part of the service agreement. For example, if in a contract for custodial service the custodial company provides the cleaning supplies, the cost of these supplies belongs to Services, not Other Materials and Supplies. Services expenses may apply to any sub-function.

The services object class does not include purchased transportation service. A contractor that provides vehicle operators is considered a purchased transportation provider, and any other labor or materials provided by that contractor, including fuel, parts, and maintenance, belong to the purchased transportation object class.