The Free Coffee Test, or Lefkowitz’s Law of Corporate Financial Health (2013)

Re:The Free Coffee Test, or Lefkowitz’s Law of Corporate Fin... by albi_lander on Friday November 16, 2018 @05:37AM (#18467847)

This law is only true for companies that poorly understand the value of perks. I work in startup where one of the main perk is that we have free lunch. This has been the case since I joined the startup, back then there were 10 people. We are now 75. Every time I tell my friends that my lunches are paid by the company, I get the same reaction which essentially is: "Man, that's so cool!" Well, you don't know what my salary is. What if I have free lunches, but I'm paid 20% less than the industry average ?

The lesson I've learned through this, is that from the company POV, money spent in perks is worth more than money spent in salary, i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary.

It is in the interest of the company to provide good perks, as the overall perceived employee benefits will be higher than the equivalent in 100% salary.

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Re:The Free Coffee Test, or Lefkowitz’s Law of Corporate Fin... by jasode on Friday November 16, 2018 @06:32AM (#18468038)

>i.e. employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary.

I agree that companies sometimes spend money on questionable so-called "benefits" (e.g. company-paid bowling party or motivational speakers) -- that employees would rather have as extra cash in their pocket.

That said, I think company-paid lunch is an advantageous financial deal for employees since it's not taxed as income[0][1] and employees have to eat anyway.

I also hate having to get into a 150-degree hot car in the summer or fight freezing snow in the winter just to go buy a lunch. The alternative of bringing my own brown-bag lunch also has hassles because of the extra prep & planning at home. Sure, an on-site catered lunch benefits the employer -- but it also benefits the employees. It's a win-win.

[0] https://www.bizjournals.com/sanjose/news/2015/08/14/exclusiv...

[1] daily free meals may be a gray-area tax loophole (it's not "occasional") but IRS isn't enforcing a strict interpretation of the law: https://www.irs.gov/government-entities/federal-state-local-...

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Re:The Free Coffee Test, or Lefkowitz’s Law of Corporate Fin... by albi_lander on Friday November 16, 2018 @08:25AM (#18468540)

I think you misunderstood what I meant, as my overall point is indeed that having good perks is most of the time a win-win for both the company and the employees.

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Re:The Free Coffee Test, or Lefkowitz’s Law of Corporate Fin... by narag on Friday November 16, 2018 @07:08AM (#18468189)

In Spain, for historical reasons, lunch is had later and is the biggest meal of the day, often in the middle of work day. There have been talk to end this anomaly but many (most?) companies are very reluctant. For a long time it was very usual to include meal tickets as compensation (it was about six euros in 2000, raising to 10 or so in 2010) because, since it was considered expenses instead of salary, their treatment for taxes was much better both for the company and the employees. There were a few companies that managed the tickets contacting restaurants to accept them and employers to use them.

In their infinite wisdom, the government decided to control the system a little too much, so most companies no longer use them. Even in the good times I didn't like the tickets at all. It was difficult to cash them if you couldn't use them (when we were deployed at customers' premises or sick, we organized diners to "laundry" the tickets) and they forced me to eat too much: I can't eat two courses + dessert in the usual restaurants every day without going overweight very quickly. Give me the money instead! Or a parking spot, or a ping pong table.

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Re:The Free Coffee Test, or Lefkowitz’s Law of Corporate Fin... by pawelk on Friday November 16, 2018 @06:02AM (#18467937)

> employees implicitly would rather have 300$ of free lunches paid by the company every month than +300$ on their salary.

I know I would. It'd take the burden of thinking about what to have for lunch every day off me. When I was working in an office I'd either bring my own lunch (most of the time), decide to order (which usually required to join a group ordering from some place, or create and manage a pool), or to go out - again, where, what time, and with whom? Each of those options was a waste of time, energy and context.

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