oh 12-1 agenda article reviews chapter 9 – employee compensation & benefits chapter 10 –...
TRANSCRIPT
OH 12-1
Agenda
• Article reviews
• Chapter 9 – Employee Compensation & Benefits
• Chapter 10 – Managing a Safe & Healthy Workplace
OH 12-2
Employee Compensation and Benefits
Hospitality Human Resources Management and Supervision9
OH 12-2
OH 12-3
Learning ObjectivesAfter completing this chapter, you should be able to:
List and describe three federal laws that impact compensation policies and programs.
Explain the types of voluntary benefits that can be included in a compensation package.
Identify and describe three retirement and health benefit laws that impact voluntary benefits.
Describe five employee benefit programs that are mandated by federal laws.
OH 12-4
Learning ObjectivesAfter completing this chapter, you should be able to:
Explain the procedures that help ensure the correct compensation will be paid to employees.
Explain the basic procedures that can be used to control labor costs.
OH 12-5
Legal Aspects of Compensation
Compensation management involves all of the activities related to planning, implementing, and monitoring wages, salaries, and benefits for employees.
Compensation and benefits must be administered legally and fairly.
Managers must understand the laws that govern their workplace and the policies and procedures to comply with them.
OH 12-6
Legal Aspects of Compensation continued
Managers need to keep current with changes; below are resources available and should be checked regularly for changes: U.S. Department of Labor and state websites
http://www.dol.gov/dol/topic/wages/
The National Restaurant Association and State Restaurant Associations
Local chambers of commerce
Various human resources newsletters
OH 12-7
Ensuring Legal Wages
Fair Labor Standards Act
Provides minimum wage and overtime pay with exceptions for Tipped employees minimum wage: tipped
employees may receive a lower wage when their tips are enough to ensure the basic minimum wage is met
Youth minimum wage: Employees under 20 years of age may be paid youth minimum wage of not less than $4.25 an hour during the first 90 consecutive days of employment.
OH 12-8
Ensuring Legal Wages continued
Fair Labor Standards Act Subminimum wage: Employers may pay certain
people a lower minimum wage under specific circumstance Students placed in a job as part of a vocational
or educational program Individual with a reduced capacity to be
productive because of a physical or mental disability.
In both of these circumstance an employer needs a certificate from the Wage and Hour Division of the Department of Labor and must post by the minimum wage poster
OH 12-9
Tip Income Details
Employees and employers must report tip income at least monthly.
Employers must allot tip income amounts to employees who reported tips of less than 8 percent of sales
Employers must report tip income from each employee and withhold taxes on tip income.
OH 12-10
Legal Wages
Full-time employees are generally expected to work forty (40) hours per week. If an employee works more than 40 hours, it is considered overtime.
Non-exempt employees (hourly) receive overtime pay (one and a half times hourly rate).
OH 12-11
Legal Wages continued
Exempt employees (salaried employees) are not required to receive extra pay for overtime. Exempt employees must make a minimum of
$23,600 per year (a few exceptions apply)
Exempt employees must perform exempt job duties:
Management or supervision is a primary responsibility
Exempt employees must have genuine input into the job status of other employees such as hiring, firing, and promoting.
OH 12-12
Legal Wages continued
Compliance Actions Job descriptions should be created and reviewed
regularly to: Assure exempt and non-exempt employees are
classified and paid fairly. Child labor law requirements are met. Americans with Disability Act (ADA) requires that
anyone who performs the essential duties of the position is paid the same
Positions are evaluated and assigned a salary grade and all employees are consistently compensated
OH 12-13
Consumer Credit Protection Act
The Consumer Credit Protection Act (CCPA) is administered by the Wage and Hour Division of the Department of Labor. It prohibits employers from terminating or
disciplining employees (in some cases) when a court or a government mandates that their wages be paid in part to a third party. This happens when: A creditor obtains a court order to receive
payments directly from an employee’s earnings. When a government tax agency, such as IRS,
seizes wages to pay for back taxes, fines or penalties.
OH 12-14
Employment Cycle & Benefits
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Basics of Employee Benefits Plans
Employee benefit plans describe the non-wage compensation an employee is eligible to receive.
Employees must enroll for benefit plans.
Plan providers offer the benefits.
A participant is a member of a plan; a beneficiary is entitled to receive benefits under the plan.
OH 12-18
Employee Benefit Programs Mandated by Federal Government
Family and medical leave
Healthcare coverage after termination (if covered before termination)
Military leave
Social Security
Unemployment insurance
Workers’ compensation
OH 12-19
Common Voluntary Benefits
Uniform benefits
Meal benefits
Medical/Dental benefits
EAP
Retirement
OH 12-20
Common Voluntary Benefits
Uniform benefitsUniforms and dress
codes provide a professional look that impacts the customers’ impression of the operation.
Proper uniforms also provide some measure of personal protection.
OH 12-21
Common Voluntary Benefits
Meal benefits Many operations
provide meal benefits by offering meals to employees at a reduced or no cost.
OH 12-22
Common Voluntary Benefits—Healthcare Plans
Common types
Fee-for-service plans
Preferred provider organizations (PPOs)
Health maintenance organizations (HMOs)
Flexible spending accounts
OH 12-23
Common Voluntary Benefits— Employee Assistance Programs (EAPs)
EAPs provide counseling and other services to individuals and families to help them deal with problems that impact their ability to work effectively.
OH 12-24
Common Voluntary Benefits—Retirement Benefits
Retirement benefits provide regular payments to employees who retire because of age.
Defined benefits (DB) The employee is guaranteed certain payments upon
retirement (the final value of the benefit is defined).
Defined contribution (DC) Payments are made into an account owned by the
employee (the employer’s or employee’s contribution is defined).
OH 12-25
Common Elements of Retirement Benefits
Both have rules for eligibility.
Benefits belong to the employee and cannot be revoked even if the employee leaves before retirement.
OH 12-26
Saving for Retirement
This young employee is probably not thinking about retirement. However, he should recognize the importance of financial independence after retirement and begin saving for it now.
OH 12-27
Employee Retirement Income Security Act (ERISA) of 1974
Protects employee pensions and healthcare plans from incompetent, unethical, and unfair administration
ERISA helps ensure that benefits promised to employees will be available when the employees need them.
Participants must receive a Summary Plan Description and notification about any changes in the plan.
OH 12-28
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Consolidated Omnibus Reconciliation Act (COBRA) of 1986
Extends healthcare coverage for people who would otherwise lose healthcare insurance
COBRA enables eligible people to continue their employer’s healthcare group plan for a limited time if they pay their own and the employer’s share of the cost, plus, sometimes, an administrative fee.
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Consolidated Omnibus Reconciliation Act (COBRA)
COBRA requires plan administrators to communicate open enrollment and cancellation procedures to employees.
COBRA also requires that employers notify the plan administrator when an employee
leaves the operation loses healthcare coverage due to reduction in hours dies becomes eligible for Medicare other qualifying life events: divorce, separation, etc.
OH 12-32
Health Insurance Portability and Accountability Act (HIPAA)
Three main functions:
1. To give people the right to add family members to their group healthcare plan at times other than open enrollment, under certain circumstances
2. To protect people from being excluded from healthcare plans or denied coverage because of a preexisting conditions
3. To protect people from discriminatory pricing or treatment under a plan because of preexisting condition or other health status factors
Requires healthcare plans to provide Certificate of Credible Coverage
OH 12-33
Ensuring Mandatory Benefits
Benefits required by federal and state law: Social Security
Worker’s Compensation Insurance
Unemployment Compensation Insurance
Unpaid leave of absence (in some cases)
Managers need to understand their legal responsibility for providing and administering these mandated benefits.
OH 12-34
Mandatory Benefits—Social Security
A federal pension program providing
Retirement benefits
Survivor benefits
Disability benefits
Medicare
Both employers and employees pay for Social Security benefits through a payroll tax.
OH 12-35
Mandatory Benefits—Unemployment Insurance
Provides a temporary reduced level of income to employees who lose their jobs involuntarily.
Some employees are typically not eligible for unemployment insurance including those who Are fired Turn down a job offer of suitable work Go on strike or do not work because of a labor dispute Accept certain types of income such as workers’
compensation, retirement or Social Security pension, or Social Security payments
OH 12-36
Workers’ Compensation
Kitchens can be dangerous places to work if equipment is improperly operated and/or if operating procedures are not consistently followed.
OH 12-37
Mandatory Benefits—Family and Medical Leave Act (FMLA)
Allows qualified employees to take up to twelve weeks of continuous or intermittent unpaid leave in a twelve-month period for certain medical or family-care situations.
FMLA requires employees to allow unpaid leave when employees Have a serious medical condition Must take care of a child, spouse, or parent with a
serious medical condition Have a newborn child or adopted child
OH 12-38
Mandatory Benefits—Family and Medical Leave Act (FMLA)
If the employee has health insurance through the employer, the employer must continue to provide this benefit during the leave, and the employee must pay any premiums that he/she would normally pay, including healthcare insurance premiums.
Employers must comply with FMLA if they have fifty or more full-time employees who live within seventy to seventy-five miles of the business.
To be eligible for FMLA benefits, covered employees must have worked for the operation for one year and a minimum of 1250 hours in the previous 12-month period.
Military leave must also be provided for applicable employees
OH 12-39
Mandatory Benefits—Uniformed Services Employment and Reemployment Rights Act
Protects employees from workplace discrimination based upon an obligation to, application for, or interest in military service.
While on military leave, USERRA requires the employer to continue all of the employee’s benefits as if the employee were not on leave. Note: employers must communicate information about USERRA to their employees.
OH 12-40
Mandatory Benefits—Uniformed Services Employment and Reemployment Rights Act
USERRA poster illustrated in Exhibit 9.11 (page 289).
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SUMMARYMandatory Benefits Voluntary Benefits
Social Security Health Insurance
FMLA Vision Insurance
COBRA Dental Insurance
Unemployment Insurance Retirement Plan
Military Leave EAP
Workman’s Compensation Uniforms
Meals
OH 12-42
Keeping Current on Benefitsand Related Laws
This manager and employee must know about many work-related concerns. The wide array of voluntary and mandatory employee benefits that (seemingly) always change are high on this list.
OH 12-43
Keeping Current on Benefits and Related Laws continued
Benefit laws are numerous and complex.
Noncompliance can be expensive (or worse!). http://www.dol.gov/compliance/guide/minwage.htm#Penalites
All managers must be trained in employee benefits, policies, procedures, and workplace laws.
OH 12-44
Ensuring Accurate Compensation
Managers must ensure that employees receive a correct paycheck.
Tracking the length of time and dates an employee has worked is also important to ensure proper vacations, retirement benefits, etc.
Payroll administrator must ensure that all applicable items are deducted from each employee’s wages and forwarded to the correct agency, company, or account.
OH 12-45
Payroll System
A method for recording and tracking employees’ time and issuing paychecks
Managers must ensure that employees report the correct number of hours.
Methods range from manual timecards to electronic card readers.
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Payroll Administration Options
Many operations outsource payroll administration.
Small operations may use a part-time bookkeeper and/or bookkeeping software.
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Controlling Labor Costs
Set Pay Rates Pay rates must be competitive with the local job
market.
The operation’s total labor needs must be carefully considered.
Legal aspects of compensation must be considered as wage rates are established.
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Controlling Overtime
Overtime must be approved before it is incurred.
Employee hours worked should be monitored.
OH 12-49
Key Term Review
Beneficiary Someone who is entitled to receive a benefit under an insurance or retirement plan because of his or her relationship with the plan’s participant.
Deductible The amount of money an insured party must pay before the insurance company’s coverage plan begins.
Defined benefit (DB; retirement) A retirement benefit in which an employee is guaranteed certain payments on retirement.
Defined contribution (DC; retirement) A retirement program that guarantees certain payments will be made into an account owned by an employee, such as a 401(k) plan.
Employee assistance program (EAP) A program that provides counseling and other services to help employees deal with a wide range of problems that hinder their ability to function effectively at work.
OH 12-50
Key Term Review continued
Employee benefit plan A program of nonwage compensation that an employee is eligible for and the situations under which the employee will receive the benefits.
Enrollment The signing up of an employee for a benefit plan.
Exclusion period The exclusion of coverage for preexisting conditions for a certain time after enrollment in an insurance plan; it is allowable as long as it is applied equally to all plan participants.
Exempt employee An employee who is not required to receive extra pay for overtime.
Garnishment Payments ordered by a court that are directly deducted from an employee’s earnings.
Group plan (benefits) A plan that provides essentially the same benefit to multiple people, such as a life insurance plan offered to all employees.
OH 12-51
Key Term Review continued
Individual plan (benefits) A plan that provides a benefit for one person or family.
Levy Payments taken by a government agency such as the IRS from an employee’s earnings.
Medicare A federally insured healthcare plan for people aged 65 or older.
Nonexempt employee An employee paid an hourly wage who is entitled to overtime pay when working more than 40 hours in a week.
Open enrollment period (benefits) A limited time period during which employees are typically able to change benefit plans and coverage and add or remove family members.
Participant Someone who is a member of a benefit plan.
Payroll administrator The person, department, or external company that ensures paychecks are issued.
OH 12-52
Key Term Review continued
Plan administrator (benefits) A designated person, department, or company that is responsible for handling administrative tasks for group plans.
Preexisting condition A medical condition for which a person has sought medical treatment before applying to join a healthcare plan.
Premium (healthcare) The monthly insurance fee; in most cases both employers and employees share its cost.
Self-insured A situation in which some very large employers pay all covered healthcare costs with their own funds.
Social Security A federal government program that provides retirement and disability income and other financial benefits to those who qualify.
Subminimum wage A wage below the minimum wage that employers may pay certain people, such as students placed in a job as part of a vocational or other educational program.
OH 12-53
Key Term Review continued
Summary plan description (SPD) An explanation of a retirement or healthcare plan’s benefits and participants’ rights and responsibilities.
Tip credit (FLSA) The choice given to operations that employ tipped employees to pay the basic minimum wage or to pay a reduced cash wage and use a tip credit.
Tipped employee An employee who may be paid a lower cash wage when his or her tips are enough to ensure that the basic minimum wage is met.
Youth minimum wage A wage that employees younger than 20 years of age may be paid, of not less than $4.25 an hour, which is lower than the basic minimum wage, during their first 90 consecutive days of employment.