Employee benefits are commonly classified as mandatory, customary, or optional. According toHuman Resource Management, 16th Editionby Gary Dessler,customary benefitsare those that are not legally required but arecommonly provided by employersand therefore often expected by employees. Examples include retirement plans, paid vacations, and health insurance coverage. These benefits help organizations remain competitive in the labor market.
In contrast,optional benefits-often referred to as voluntary benefits-are offered entirely at the discretion of the employer and may be selected or declined by employees. Dessler explains that optional benefits typically allow employees to tailor their benefits package to their personal needs, such as additional life insurance, vision coverage, or supplemental disability insurance, often at the employee's own cost.
The key difference lies in employee expectations and organizational norms. Customary benefits are widely anticipated as part of standard employment, while optional benefits provide flexibility and choice. Therefore, the correct distinction is thatoptional benefits are discretionary, while customary benefits are commonly provided and expected.
Source:
Gary Dessler,Human Resource Management, 16th Edition, Chapter on Employee Benefits and Total Rewards