BANGOR TRANSFER ABROAD PROGRAMME BENEFITS. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall13–2 Benefits Supplemental pay Executive

BANGOR TRANSFER ABROAD BANGOR TRANSFER ABROAD PROGRAMMEPROGRAMME

BENEFITSBENEFITS

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 13–2

BenefitsBenefits

Supplemental

pay

Executive services

Insurance benefits

Retirement benefits

Types of Employee Benefits


FIGURE 13–2 Private-Sector Employer Benefits Costs by Category, March 2009


TABLE 13–1 Some Required and Discretionary Benefits

* While not required under federal law, all these benefits are regulated in some way by federal law, as explained in this chapter.

Benefits Required by Federal or Most State Law

Benefits Discretionary on Part of Employer*

Social Security

Unemployment Insurance

Workers’ Compensation

Leaves under the Family Medical Leave Act

Disability, Health, and Life Insurance

Pensions

Paid Time Off for Vacations, Holidays, Sick Leave, Personal Leave, Jury Duty, etc.

Employee Assistance and Counseling Programs

“Family Friendly” benefits for Child Care, Elder Care, Flexible Work Schedules, etc.

Executive Perquisites


Policy Issues in Designing Benefit Policy Issues in Designing Benefit PackagesPackages

Policy Issues

Who will be covered

Coverage during probation

Degree of employee choice

Which benefits to offer

Whether to include retirees

How to finance benefits

Cost containment procedures

Communicating benefits options


Pay For Time Not WorkedPay For Time Not Worked

Vacations and holidays

Parental leave

Supplemental unemployment

benefits

Supplemental Pay Benefits

Unemployment insurance

Sick leave

Severance pay


Pay for Time Not WorkedPay for Time Not Worked• Unemployment InsuranceUnemployment Insurance

Provides for benefits if a person is unable to work through Provides for benefits if a person is unable to work through no fault of his or her own.no fault of his or her own.

Is an employer payroll tax that is determined by an Is an employer payroll tax that is determined by an employer’s rate of personnel terminations.employer’s rate of personnel terminations.

Tax is collected and administered by the state.Tax is collected and administered by the state.

• Vacations and HolidaysVacations and Holidays Number of paid leave days and holidays varies by employer.Number of paid leave days and holidays varies by employer.

Qualification for and calculation of holiday and leave pay Qualification for and calculation of holiday and leave pay varies by employer.varies by employer.

Premium pay for those who work on holidays.Premium pay for those who work on holidays.


Pay for Time Not Worked (cont’d)Pay for Time Not Worked (cont’d)• Sick LeaveSick Leave

Provides pay to an employee when he or she is out of work Provides pay to an employee when he or she is out of work because of illness.because of illness. Costs for misuse of sick leaveCosts for misuse of sick leave Pooled paid leave plansPooled paid leave plans

• Parental LeaveParental Leave The Family Medical Leave Act of 1993 (FMLA)The Family Medical Leave Act of 1993 (FMLA)

Up to 12 weeks of unpaid leave within a one-year period.Up to 12 weeks of unpaid leave within a one-year period. Employees must take unused paid leave first.Employees must take unused paid leave first. Employees on leave retain their health benefits.Employees on leave retain their health benefits. Employees have right to return to job or equivalent position.Employees have right to return to job or equivalent position.


Pay for Time Not Worked (cont’d)Pay for Time Not Worked (cont’d)• Severance PaySeverance Pay

A one-time payment when terminating an employee.A one-time payment when terminating an employee.

• Reasons for granting severance pay:Reasons for granting severance pay:

Acts as a humanitarian gesture and good public relations.Acts as a humanitarian gesture and good public relations.

Mirrors employee’s two-week quit notice.Mirrors employee’s two-week quit notice.

Avoids litigation from disgruntled former employees.Avoids litigation from disgruntled former employees.

Reassures employees who stay on after the employer Reassures employees who stay on after the employer downsizes its workforce of employer’s good intentions.downsizes its workforce of employer’s good intentions.


Pay for Time Not Worked (cont’d)Pay for Time Not Worked (cont’d)• Supplemental Unemployment Benefits (SUB)Supplemental Unemployment Benefits (SUB)

Payments that supplement the laid-off or furloughed employee’s Payments that supplement the laid-off or furloughed employee’s unemployment compensation.unemployment compensation.

The employer makes contributions to a SUB reserve fund.The employer makes contributions to a SUB reserve fund.

SUB payments are made to employees for the time the SUB payments are made to employees for the time the employee is out of work due to layoffs, reduced workweeks, employee is out of work due to layoffs, reduced workweeks, or relocations.or relocations.

SUB payments are considered previously earned SUB payments are considered previously earned compensation for unemployment calculation purposes.compensation for unemployment calculation purposes.


Retirement BenefitsRetirement Benefits• Social SecuritySocial Security

(Federal Old Age and Survivor’s Insurance)(Federal Old Age and Survivor’s Insurance) A federal payroll tax (7.65%) paid by both the employee A federal payroll tax (7.65%) paid by both the employee

and the employer on the employee’s wagesand the employer on the employee’s wages

Retirement benefits at the age of 62 Retirement benefits at the age of 62

Survivor’s or death benefits paid Survivor’s or death benefits paid to the employee’s dependentsto the employee’s dependents

Disability payments to disabled employees Disability payments to disabled employees and their dependentsand their dependents

The Medicare programThe Medicare program

Health services to people age 65 or olderHealth services to people age 65 or older


Retirement Benefits (cont’d)Retirement Benefits (cont’d)

Defined benefit plans

Defined contribution

plans

Qualified plans

Types of Pension Plans

Nonqualified plans


Pension PlansPension Plans

Membership requirements

Vesting schedule

Benefit formula

Plan funding

Policy Issues in Pension Planning


Personal ServicesPersonal Services• Credit UnionsCredit Unions

Separate businesses established with the employer’s assistance Separate businesses established with the employer’s assistance to help employees with their borrowing and saving needs.to help employees with their borrowing and saving needs.

• Employee Assistance Programs (EAPs)Employee Assistance Programs (EAPs) Provide counseling and advisory services:Provide counseling and advisory services:

Personal legal and financial servicesPersonal legal and financial services

Child and elder care referralsChild and elder care referrals

Adoption assistanceAdoption assistance

Mental health counselingMental health counseling

Life event planningLife event planning


Employee Assistance ProgramsEmployee Assistance Programs

1

Be aware of legal issues.

Ensure professional staffing.

Steps for Launching an EAP Program

Develop a policy statement.

Maintain confidential record-keeping systems.

2

3

4


Family-Friendly (Work–Life) Family-Friendly (Work–Life) BenefitsBenefits• Subsidized child careSubsidized child care

• Sick child benefitsSick child benefits

• Elder careElder care

• Time offTime off

• Subsidized employee transportationSubsidized employee transportation

• Food servicesFood services

• Educational subsidiesEducational subsidies

• Fitness and medical facilitiesFitness and medical facilities

• Flexible work schedulingFlexible work scheduling


Flexible Benefits ProgramsFlexible Benefits Programs• Cafeteria (Flexible Benefits) ApproachCafeteria (Flexible Benefits) Approach

Each employee is given a limited benefits fund budget Each employee is given a limited benefits fund budget to spend on preferred benefits.to spend on preferred benefits.

Types of plansTypes of plans Flexible spending accountsFlexible spending accounts Core plus option plansCore plus option plans

• Employee LeasingEmployee Leasing Professional employer organizations or staff leasing firmsProfessional employer organizations or staff leasing firms Handle human resources functions for leased employees Handle human resources functions for leased employees

of small firmsof small firms Can provide benefits by aggregating employees into Can provide benefits by aggregating employees into

larger insurable groupslarger insurable groups Can raise worker commitment, co-employment, and Can raise worker commitment, co-employment, and

workers’ compensation issuesworkers’ compensation issues


Flexible Work SchedulesFlexible Work Schedules• FlextimeFlextime

• Compressed workweek schedulesCompressed workweek schedules

• Workplace flexibilityWorkplace flexibility

• Job sharingJob sharing

• Work sharingWork sharing

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BANGOR TRANSFER ABROAD PROGRAMME BENEFITS. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall13–2 Benefits Supplemental pay Executive