chapter #13 benefits and services. oklahoma 1907 - 2007

Chapter #13

Benefits and Services

Oklahoma 1907 - 2007

www.netstate.com/state_seals.htm

Benefits

Indirect financial and non financial payments employees receive for continuing their employment with the company.

28% of payroll $ $888.00 per family monthly 7.00 per payroll hour

Legally Required– Workers Comp– Unemployment– FMLA– SSI

Optional– 401K– Health, Dental– Sick– Vaction– Retirement– Life insurance– Childcare– Profit sharing– Pensions

Classifications of Benefits

1. Pay for time not worked 2. Insurance benefits 3. Retirement 4. Services

Pay for time not worked Look page #481

Supplemental benefits– Most costly– Paid time off 30% of total benefits

• Holidays– Vacations

» Jury duty» Funeral leave» Military leave» Personal days» Sick days» Sabbatical leaves» Maternity leave» unemployment

Know Your Law

ERISA– Requires ers to have plans in writing

Job Creation and Workers Assistance Act• ROIs, ers must use in pension funds

Newborn Mothers Protection Act• Minimum stays in hospitals

Mental Health Parity Act• Insurance companies can not set limits

HIPAA FMLA ADA

HIPAA• Protection of health information

Survey of benefits

89% received paid holidays

96% paid vacations 77% medical

coverage 80% retirement 87% life insurance

Sick Leave

provides pay to employees when they are out of work due to illness– Usually full pay for # of days– up to 12 per year– 45 % of actually sick days are actually for the sick– Family issues 27%– Personal needs 13%– Mental problems 9%– Stress 6%– Other reasons

Unemployment 26 weeks

If a person is unable to work through some fault other than his or her own.

Derived from tax .1% to 5% of payroll

Depends on rate of terminations

Release through no fault of ee

Vacations and Holidays

US average 10 days per year Mexico 6 days Sweden 25 days France 25 days

Sick leave cont.

Very expensive Solutions

• Leave banks PTO• Well pay

Family Medical Leave Act FMLA Bill Clinton Parental Leave (1250 hours to qualify) (1/2 of all worker today are women and 80%

will become pregnant during their work lives)– Private ers of 50 or more– 12 weeks unpaid leave– Ers can require ees to take unused paid sick leave

or annual leave as part of the 12 weeks– EE are entitles to insurance– EE guaranteed return to previous status with no

loss of benefits

Severance Pay

A one time payment some employers provide when terminating an employee.– Humanitairan

• Since ers require a two week notice from ees• To avoid litigation• 82% firms have it• Either salary or lump sum• Depends on length of employment I wek for

each pay year unless you are an exec and its 39 average

Supplemental unemployment

For temporary shutdowns– GM for remachining– Supplements unemploymenet

Workers Comp

Pay for work related injury Pay for death to survivors Paid by % of injury Temporary – partial or total Permanent – partial or total Costs depend on type of industry and

probable danger – Increases with # of claims– High costs to business that add no value

Hospitalization, Health and Disability Insurance HMO

– A prepaid health care system that generally provides routine routine the clock medical services as well as preventive medicine in a clinic type arrangement for ees. Who pay a nominal fee in addition to the fixed annual fee the er pays

PPO– Groups of health care providers that contract with

ers, insurance co. or third party payers to provide medical are at a reduced fee.

Reducing Health CostsLook # 487 “Cost Savings”

Have a deductible Increase amount of

deductibles Use gatekeepers Encourage prevention

Wellness programs Form coalitions Treat AIDS victims in

the home

Pregnancy Discrimination Act

Pregnant women can not be discriminated against. Ers have to give same benefits as anyone else. weeks

COBRA

Private employers must continue to make health benefits available to terminated or retired ees for 18 months

Ee must pay at same rate.– Use acknowledgement

form to show that ees have been told COBRA rights

– Look # 490 Recordkeeping

SSI

Paid on EE wages Shared equally between ee and er 7.65% of gross salary up to 80,400$ Self employed pay 15.3% 67Yr to get it if born after 1960

Social Security

Federal program that provides three types of benefits– $ age 62– Survivors– Dependents– Disability– EE has to be insured to

get them– Medicare is also

administered through SSI– 7.65% of f irst $87,900

ERISA Pension funds are to be protected and insured (Pres Ford 1974)

Vesting after 5 years service funds cannot be forfeited by ee. Contributions are always there plus ers contribution

Pension Benefits Guarantee CORP– Insurance pension plans

against bankruptsy– Portability

Pensions Plans

Defined Benefits• Ee knows exactly how much

Contribution Plans• 401K pretax deduction

» New law increased to 15,000 yr 2006

Deferred Profit sharing• ESOP

Golden offerings• Early retirement benefits• Be careful of discrimination

Personal Services and Family Benefits

Credit Unions EAPS Childcare Subsidized health care Compressed work weeks

Benefits cont.

Job sharing Eldercare Telecommuting Education tuition reimbursements Transportation to work