Benefits in kind, pay that does not say its name

The law distinguishes benefits in kind, goods or services supplied free or at reduced price and subject to contributions, from professional expenses, which reimburse spending incurred for the activity.

The boundary between the two is the object of regular litigation, and the administration publishes flat-rate scales for the most common cases, vehicle, housing, meals. The same phone or the same vehicle may fall into either category depending on how much it is used privately.

Several arrangements benefit from partial exemptions, notably meal vouchers, created in 1967, transport contributions and certain welfare benefits.

Those regimes explain the shape remuneration takes: a euro paid in an exempt form costs less than a euro of salary for the same net gain, which steers choices independently of employees' preferences.

Some items, moreover, are no longer a matter of choice. The extension of company supplementary health insurance to all employees on 1 January 2016 made it compulsory, which changes the comparison with situations where people insure themselves.

Economic work on non-monetary remuneration finds that employees generally value these items below their cost to the employer, except where they correspond to spending they would have incurred anyway. The reasoning is that of Joel Waldfogel in 1993 about gifts: a good chosen by someone else is often worth less to the recipient than its price.

That difference in valuation is the classic economic argument against generalising them, and it is offset in practice by the difference in social and tax treatment. The opposite argument exists: an employer sometimes obtains prices an individual would not, which can close part of the gap.

Two jobs at the same gross salary may offer very different material conditions depending on the associated benefits, which published pay comparisons do not capture.

Pay statistics incorporate some of these items, under conventions set out in methodological notes, but self-report surveys of employees capture them poorly. Many people do not know the exact value of what they receive in this form.

Access to these benefits is very unevenly distributed by firm size and sector, which adds a dimension to pay gaps measured on salary alone. It also separates employees from the self-employed, who fund most of these items themselves.

Work on job quality incorporates these items into composite indicators, whose construction poses the same weighting difficulties as other composite indices. Depending on the weight given to each benefit, two jobs may swap places in the ranking.