Essay about Exam 2 Study

AEDE 3160 – HR

Exam #2

10/24/2013

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

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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.
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Insurance o Medical – 70% of workers in US receive medical benefits
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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
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10/24/2013

Additional benefits possible: accidental death and dismemberment

Disability:
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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

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Defined Benefit Plan – pension plan that guanrantees a specified level or retirement income
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Employee Retirement Income Security Act (1974) –employer must contribute enough for plan to cover all benefits to be paid out to retirees

o

o

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

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Lacking benefits deters employee interest

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

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Market Forces – product/labor markets

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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

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