Essay about Exam 2 Study

Submitted By tline92
Words: 2059
Pages: 9

AEDE 3160 – HR

Exam #2

10/24/2013

Benefits and Compensation


Social Security – the federal old age, survivors, disability, and health insurance program o o


Combines: old age (retirement) insurance, survirvor’s insurance, disability insurance, hospital insurance (Medicare part A), supplementary medical insurance
(Part B)
Flat payroll tax on employees and employers

Unemployment Insurance – federally mandated program administered by states o Focuses on minimizing hardships of unemployment:





Help in finding new jobs

 o Payments to unemployed workers

Incentives to stabilize employment

Payroll tax on employers that depends on state requirements

Worker’s Comp - state programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors o o



No-Fault Liability – an employee does not need to show that the employer was grossly negligent in order to receive compensation
Employer is protected from lawsuits

Unpaid Family and Medical Leave - requires organizations with 50 or more employees to provide up to 112 weeks of unpaid leave o After childbirth or adoption, to care for seriously ill family member, an employee’s own serious illness

o

Employers must guarantee employee same or comparable job upon return **

Paid Time Off (PTO) – flexible approach to compensation in which employer pools personal days, sick days, and vacation days for employees to use as needs arise.


Insurance o Medical – 70% of workers in US receive medical benefits



May include: dental, vision, birthing, rx

 o Covers: hospital/surgical/physician expenses

Mental Health Parity Act (1996)

Term Life Insurance – if employee dies during the term of policy, employee’s beneficiaries receive death benefit payment (Usually 2x employee’s salary)

AEDE 3160 – HR

Exam #2


o

10/24/2013

Additional benefits possible: accidental death and dismemberment

Disability:





Short term – pays a % of a disabled employee’s salary as benefits to employee for 6 months or less
Long term – pays a % of disabled employee’s salary after an initial period and potentially for rest of employee’s life

Retirement Plans: about half of emplyees working in private sector have employer sponsored retitement plans o Contributory Plan – retirement plan funded by contributions from employer and employee o

Noncontributory Plan – funded entirely by contributions from employer

o

Defined Benefit Plan – pension plan that guanrantees a specified level or retirement income


Employee Retirement Income Security Act (1974) –employer must contribute enough for plan to cover all benefits to be paid out to retirees

o

o



Defined Contribution Plan – employer sets up indicidal account for each employee and specifies the size of investment in account (money purchase plans, profit sharing/stock plans, 401K plan)
Free employers from risks that investments will not perform

Selecting Benefit Plans


Must consider organizations goals, budget and the expectations of current employees



Lacking benefits deters employee interest

Developing a Pay Structure o Legal Requirements – equal pay for equal work, minimum wage, overtime

o

Market Forces – product/labor markets

o

Organization’s goals – quality workforce, cost control, equity and fairness

All play a role in pay level decisions (job structure/pay structure designs) o Equal Employment Opportunity - employers must not base difference in pay on employee’s age, sex, race or other protected status

AEDE 3160 – HR

Exam #2

10/24/2013

o o o

Differences in pay must tie to business-related considerations as job responsibilities or performance
Goal is for employers to provide equal pay for equal work

Product Markets – includes organizations that offer competing goods or services o o

o…