COMPENSATION

STRUCTURE
DEVELOPMENT

legal requirements
for employees
benefits both
employee and
employer
 INTRODUCTION

BENEFIT AND SERVICE OFFERINGS ADD BENEFITS BECOME THE FOCUS OF

ABOUT 30% TO AN ORGANIZATION’S NEGOTIATIONS WITH EMPLOYEES WHEN
PAYROLL COST LARGE WAGE AND SALARY INCREASES
ARE NOT FEASIBLE
 INTRODUCTION
Meets Legal Attracts Contemporary Benefits Offerings
Requirements Applicants
and current • benefits today reflect a diverse
workers workforce
Social Security Health Insurance • challenge -- designing a benefits
package that is lawful and attractive
Unemployment Retirements plans
compensation
Workers Compensation disability
 Employee Benefits have grown in
importance and variety

EMPLOYEE
AND Employee Benefits are typically
membership-based rewards offered
EMPLOYER to attract and keep employees
BENEFITS

Employee Benefits do not directly

affect a worker’s performance, but
inadequate benefits lead to
employee dissatisfaction
 SOCIAL SECURITY:
• financed by equal employee and
employer contributions, based on a
LEGALLY percentage of earnings
REQUIRED • provides income for retirees,
BENEFITS disabled workers and surviving
dependents
• provides some health insurance
coverage through Medicare

Requirements to Receiving Unemployment
Benefits:
1. involuntary loss of job (but not having
been fired)
2. must have worked a minimum number of
weeks
3. have applied to a state agency for
unemployment
4. have registered for available work
5. are willing to accept any suitable job
offered through the state agency
L E G A L LY
REQUIRED
BENEFITS:
Unemployment compensation:
• funded by employers who pay
combined federal and state tax
imposed on taxable wage base
• tax varies based on
organization’s unemployment
experience: the more layoffs,
the higher the rate
• provides employees with
some income continuation
during periods of involuntary
unemployment
 Workers Compensation
• paid for by the organization
LEGALLY • rates based on likelihood of accidents,
REQUIRED past history, and the type of industry
BENEFITS: • benefits pay expenses and/or
compensate for losses resulting from
work-related accidents or illness,
regardless of fault
 Family and Medical
Leave Act:
• requires employers with 50
LEGALLY
REQUIRED or more employees to allow
BENEFITS: up to 12 weeks of unpaid
leave for family or medical
reasons
• specifies record-keeping and
communication requirements
 Health Insurance
• increases in healthcare costs have
made health insurance a critical
benefit
VO L U N TA RY
BENEFITS • healthcare costs are growing faster
than wages
• purpose is to protect employee
from catastrophic loss should a
serious illness occur.
 Disability Insurance Programs
• provides salary continuation for:

• short-term disabilities (sick leave)

• long-term disabilities (coverage

PAID TIME usually effective after 6 months)
OFF • some companies provide financial
incentives to employees to not use
their sick leave
• long-term disability plans usually
replace a portion of the employee’s
salary, often 60%
 Group Term Life Insurance
• benefit is usually based on one’s
annual rate of pay

SURVIVOR • supplemental insurance increases

coverage to two to five-times the
BENEFITS: employee’s salary
Travel Insurance
• life insurance for business travel-
related deaths
 • Flexible Spending Accounts
• under Section I25 of the Internal
Revenue Code employees can set aside
a designated dollar amount before
taxes for specified services such as
AN
I N T E G R AT I V 1. health-care premiums
E 2. medical expenses
PERSPECTIV 3. dependent child or elder care
E ON 4. group legal services
EMPLOYEE
BENEFITS • IRS requires that accounts for
different purposes be separate and that
all money be spent during the year or
forfeited
• not subject to federal, state, and social
security taxes
 Modular Plans
I N T E G R AT I V E • employees choose a pre-designed
PERSPECTIVE package of benefits from several options
ON Core-Plus Options Plans
EMPLOYEE
BENEFITS • employees given core coverage (e.g.
medical, life, disability) with option to
select other benefits
THANKYOU