Every year, every employee of your organization or church should receive a personnel compensation letter. This letter is a summary of all that the church pays in order to have this person as an employee. There are several reasons for creating this letter each year:
- It provides documentation for the employee for his/her own knowledge. Otherwise, some employees would never learn if they got a pay raise or not.
- It provides documentation for the employee's personnel file in the finance office in case the auditor or Department of Labor investigator wants to see it.
- It helps the employee to see what the "total cost" of him/her working at the church is. Many employees grumble because they're not paid enough. This document will show that while their wages may be lower than they want, the employer provides a significant number of additional benefits. The letter explains how much those benefits would cost the employee if he/she had to buy them personally.
- Previous Year Gross Salary Figure
- Next Year Salary Increase
- Next Year Gross Salary Figure
- List of benefits with a brief description of each and how much they cost for that specific employee
- Employer FICA/Medicare (many employers forget this but it is a cost of having an employee)
- Health insurance
- HSA contribution by the employer
- Dental insurance
- Other insurances: life, long-term disability, short-term disability, workers' comp
- Total Estimated Compensation (BTW, you should insert the word "estimated" or "anticipated" lest any employee leaving in the middle of the year demand to be paid the "Total Compensation" this letter might imply).