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13 Cards in this Set

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  • Back
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Purpose of Benefits
Provide security for employees and their family members
Companies believe benefits
 Attract good employees
 Increase morale
 Reduce turnover
 Increase job satisfaction
 Enhance organization’s image
Legally Required Benefits
Workers Comp
SS
Unemployment Insurance
Workers’ Compensation
Form of no-fault insurance
 Employees are eligible even if their actions caused the
accident
Covers work-related injuries, diseases
 Medical care for work-related injuries
 Temporary disability benefits
 Permanent partial and permanent total disability benefits
 Survivor benefits
 Rehabilitation
 Covered by State, not Federal laws
Social Security
• Provides a foundation of basic security for American
workers and their families
◦ Old age or disability benefits
◦ Benefits for dependents of retired or disabled workers
◦ Benefits for surviving members of a deceased worker
◦ Lump-sum death payment
 Tax on employee earnings
 4.2% paid by employee on earnings up to $110,100 (2012)
 6.2% paid by employer on earnings up to $110,100 (2012)
 If self employed, individual pays 10.4%
Medicare (funding part of SS)
 Tax on employee earnings
 1.45% paid by employee on all earnings
 1.45% paid by employee on all earnings
 If self employed, individual pays 2.9%
Unemployment Insurance
 Unemployment compensation is financed exclusively by
employers that pay federal and state unemployment insurance
tax in the majority of states
 Federal tax amounts to 6.2% of the first $7,000 earned by each
worker
 States additionally impose a tax above the $7,000 figure
 The extra amount a company pays depends on its experience rating
 Eligibility requirements to receive benefits
 Must meet state requirements for wages earned or time worked
during an established (one year) period of time referred to as a
“base period”
 Must be determined to be unemployed through no fault of your
own and meet other eligibility requirements of State law
Family and Medical Leave Act (FMLA)
 What employers?
 Employers with 50 or more employees
 Which employees?
 Must have worked at least 1,250 hours for the employer in the previous
year
 When?
 Care for a new child (birth, adoption, or fostering)
 Care for a seriously ill family member (parents, spouse, child)
 Recover from one’s own serious illness
 To care for an injured service member in the family
 To address qualifying exigencies arising out of a family member’s deployment
 What?
 Continuance of group health insurance benefits
 Restoration of position
 Protection of benefits
 Protection from retaliation
 12 weeks unpaid leave
Retirement Plans
 Employees rank pensions as one of the more important
benefits
 Two generic types of plans
 Defined benefit plans (pension) - employer provides a specific pension
level
 Defined contribution plans - contributions by employer I401(k),
ESOPs, etc.]
Life Insurance
 One of the most common benefits
 Most companies offer term policies
 Value of 1-2 times an employee’s salary
 Most plan premiums paid completely by employer
 Companies make retiree coverage forfeitable at the time of
departure
 Is heavily affected when shifting to flexible benefit program
Health and Medical Benefits
General Health care
Heath care: cost control startgeies
Short and long term disability
denatl
vision
Main reason firms do not provide health coverage
high premiums
Short- and Long-Term Disability
 Workers’ compensation covers disabilities that are workrelated
 Social security has provisions for disability income to those
who qualify
 Private sources of disability income
 Employee salary continuation plans
 Long-term disability plans