Protect More Than Just Your Employee's Health
As competition heats up in the job market, companies are always searching for that one great perk that might sway a potential candidate to choose them over anyone else. Whether it's health insurance, retirement, paid time off, or even wellness, there's something that's more in demand today than there was yesterday. Companies now have a new benefit they can more easily provide to their employees -- identity theft protection.
According to an article on the website of Employee Benefit News titled, "Regulatory Clarity Makes ID Protection A More Attractive Employee Benefit," identity theft is not only the fastest growing crime in America, but also the fastest growing consumer complaint. The article states that more than 13 million Americans have their identity stolen every year. That equates to one person every three seconds.
Offering this type of theft protection to employees was only given a passing glance by companies a few years ago and was unheard of more than a decade ago. Yet today, employees are signing up for this protection themselves and looking to employers to add it as one of their benefits.
Fortunately, the IRS tried to clear up any confusion regarding how employees would be taxed for this perk if offered by their employer. By doing so, it paved the way for companies to reconsider this benefit. Before the end of 2015, the IRS said it would allow preferential tax treatment for employer-provided identity theft benefits regardless of whether there was an actual breach in data. Previously, this was only available if there was a data breach and then only if an individual's personal information might have been affected.
According to the article, it's anticipated that identity theft protection will be one of the fastest growing voluntary benefits. In addition, identity theft is, regrettably, most likely here to stay so it behooves companies to get ahead of the curve and offer it to their employees before a competitor does. Besides the benefit to employees of protection in the event of identity theft and assistance in restoring their identity, it also benefits employers. This is because an employee will be able to concentrate more on his or her job instead of worrying how they're going to fix the problem or even take time off from work.
The good news for both employer and employee is that if identity theft protection is offered, it should not increase their federal tax liability. State and local taxes may still apply and there are other exclusions such as if cash is received in lieu of protection. Because of all the various implications all parties should consult with a tax professional before implementing these benefits.