Mgmt 343 Final Ch. 13

Front 1

Legally required employee benefits

Back 1

- social security
- unemployment
- workers compensation insurance

Front 2

Social Security

Back 2

includes provision for old-age insurance, unemployment insurance, survivors' insurance, disability insurance, hospital insurance, and supplementary medical insurance.

- full benefits begin at age 65 or a reduced benefit can begin at age 62
- both employers and employees are assessed a payroll tax
- the eligibility age for benefits and any tax penalty for earnings influence retirement decisions

Front 3

Unemployment

Back 3

Unemployment insurance has the following objectives:
- to offset lost income during involuntary unemployment
- to help unemployed workers find new jobs
-to provide an incentive for employers to stabilize employment,
-to preserve investments in worker skills by providing workers with income during short-term layoffs.

Unemployed workers are eligible for benefits if they:
-have a prior attachment to the workforce,
-are available for work,
-are actively seeking work,
-were not discharged for cause, did not quit voluntarily, and are not out of work because of a labor dispute.

Front 4

Workers' Compensation

Back 4

laws cover job-related injuries and death

- the system is based on no-fault liability
- approximately 90% of US workers are covered

Front 5

Health Insurance

Back 5

- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
- COBRA

Front 6

Health Maintenance Organization (HMO)

Back 6

requires that patients have primary care physicians (PCP) who refer to them to specialist as needed; low out of pocket costs for employee

Front 7

Preferred Provider Organization (PPO)

Back 7

no PCP requirement; don't need referrals; more out of pocket costs as compared to HMO

Front 8

COBRA

Back 8

requirement that employers extend health/dental insurance coverage to terminated employees for up to 36 months after termination

Front 9

Retirement

Back 9

- Defined Benefit Plan
- Defined Contribution plan

Front 10

Defined benefit plan

Back 10

(often referred to as pension plan; a retirement plan)

- guarantees a specified retirement benefit level to employees
- insulates employees from investment risk, which is borne by the company
- PBGC guarantees basic retirement benefit in case of financial difficulties
- ERISA increased the fiduciary responsibilities of pension plan trustees, established vesting rights and portability provisions, and established

Front 11

Defined Contribution Plan

Back 11

(401K most popular retirement plan)

- does not promise employees a specific benefit level upon retirement
- employers shift investment risk to the employee
- there is no need to calculate payments based on age and service
- most prevalent in small companies

Front 12

Funding, Communication, and Vesting Requirements

Back 12

- A summary plan description (SPD) obligates employers to describe the plan's funding, eligibility requirements, risks, and so on.

- ERISA guarantees that employees, after working a certain number of years, earn the right to a pension upon retirement.
-- These are referred to as vesting rights.

- Vesting schedules that may be used are as follows:
--Employees are vested after five years of service.

Front 13

Pay for Time Not Worked

Back 13

- In the European Community, as many as 30 days of mandated vacation is common.
- In the United States, there is no legal minimum, although 10 days is common.
- Sick leave programs often provide full salary replacement for a limited period of time, usually not exceeding 26 weeks.
- The amount of sick leave is often based on length of service, accumulating with service.

Paid Time Off (PTO) - time off to be used by employees for any reason

Front 14

Historical context of unions

Back 14

- unions came into existence prior to the labor laws that protect us today, i.e. Fair Labor Standards Act, Civil Rights Act, etc...

Front 15

Family and Medical Leave Act

Back 15

The 1993 act that requires employers with 50 or more employees to provide up to 12 weeks of unpaid leave after childbirth or adoption;

to care for a seriously ill child, spouse, or parent;

or for an employee's own serious illness

Front 16

Employee wellness programs (EWPs)

Back 16

focus on changing behaviors both on and off work time that could eventually lead to future health problems

ex) health education program, fitness facility

Front 17

Child care

Back 17

lowest level (36%) - organization supplies and helps employees collect information about the cost and quality available

mid-level (5%) - organizations provide vouchers or discounts for employees to use at existing facilities

highest level (9%) - firms provide facilities at or near work site