CH 6 - Comp and Benefits
Federal Insurance Contributions Act (FICA)
1939, transferred responsibility of collecting social security/medicare taxes to the IRS
12 weeks of unpaid leave w/in 12 month period (26 for military caregiver leave), continuation of health benefits, reinstatement of same position or equivalent upon return
3 Benefits covered by FMLA
Unemployment Compensation Amendments of 1992
A law in the United States that allows a terminated employee to take employer-sponsored retirement savings and place them into a retirement plan of their choice.
Consolidated Omnibus Budget Reconciliation Act
COBRA
Examples of Monetary Compensation
Cash, 401(k) matching, medical care premiums, paid time off
16 years old
Child must be how old to work in most nonfarm jobs
Total Rewards
Compensation and Benefits
$7.25 per hour
Current federal minimum wage, set by FLSA
False
Employers are not required to pay employees who are called to Jury Duty
all public agencies, schools (regardless of size) and to private employers with 50 or more employees working w/in a 75 mile radius for 20 or more calendar work weeks of the year
Employers covered by FMLA
Admin assistant or accountant
Example of Benchmark Positions
True
Federal Government first began regulation compensation during the Great Depression
3 to 6 months
How long can short term disability be in effect
102% of the group premium
How much can employers charge ee's for premiums under COBRA
Base Salary / Midpoint of Salary range X 100
How to calculate Compa-Ratio
Provide salary adjustments for the incumbent population
How to reduce wage compression
False (they can)
If the ee has more than one garnishment for more than one debt the employer is not allowed to terminate
DOL poster in an area frequented by ee's, rights and responsibilities must also be in the ee handbook/collective bargaining agreement or other written documents
Informational Notice (FMLA), two formats
Narrower
Is the pay range narrower or wider at entry level grades
True
PTO is viewed as earned leave that must be paid out upon resignation
False (top 5)
SEC requires public companies to fully disclose compensation for the top 3 execs
False (they do are are compensated by the federal government)
States don't have their own unemployment insurance administration and fund
True
Stock options are only valuable if the company stock rises over time
emergency travel from home to work, one day offsite assignments, travel between job sites, travel away from home
Times when you have to compensate a nonexempt ee for travel
Grantor or Rabbi Trusts and Excess Deferral Plans...not required to meet ERISA or IRS requirements
Two Types of Nonqualified Plans
legally mandated and voluntary
Two categories of benefits in orgs
WH-382, WH-381
Two forms employers must provide ee's of their eligibility, rights, and responsibilities under FMLA Leave
inform ee of the FMLA rights, specific info must be provided in response to an FMLA leave request
Two notice obligations employers have regarding FMLA
base pay equals the midpoint of the salary range
What does a Compa-Ratio of 100 mean?
Cafeteria Plan
a large employer with diverse ee population may offer these plans with a wide variety of benefit options in response to various need of different employee groups
Key Employee Exception
a provision in FMLA that states key ee's may be denied reinstatement to the position they held or an equivalent position if the employer demonstrates that reinstatement would cause "substantial and grievous economic injury"
Defined Benefit Plan
a traditional pension plan in which the employer provides specific benefit upon retirement
Hazard Pay
additional pay for dangerous and/or extremely uncomfortable working conditions
Internal Conditions
affect an org's willingness and ability to pay; for example financial constraints or poor business results, organization structure
Flexible Spending Accounts FSAs
allow employees to set aside pretax funds for medical expenses they plan to incur during the calendar year
Participant
an ee who has met the eligibility requirements for the plan
Defined Contribution Plan
an individual plan in which the amount of funds contributed is known, but the amount of the benefit that is eventually paid out isn't known because it depends on the investment returns that are earned
Monetary Compensation
any costs the org incurs for benefit of ee's
Imputed Income
any indirect compensation paid on behalf of ee's; this happens when employer's pay for this premium for life insurance coverage
Strike Price
based on the market price at the time the options are issued (Common to vest over 3 to 5 years)
Government Salary Survey
compensation data from the Bureau of Labor Statistics (BLS); independent national statistical agency whose mission it is to collect, analyze and distribute statistical data for the DOL
Exclusive Provider Organizations EPOs
consists of a network and includes a hospital; these physicians may see only those patients who are part of the network/plan
Indirect Compensation
consists of any employee payments not associated with wages and salaries (vacation, sick time, holiday pay, premiums, etc)
Administrative Services Only Plan (ASO)
contracting with an insurance company to manage and pay claims
Cost of Labor
cost to attract and retain individuals with the skills needed by the org to achieve it's goals
Family Medical Leave Act (FMLA)
created to assist ee's in balance the needs of their families with the demands of their jobs; intent was for ee's to not have to choose between keeping their jobs and attending to seriously ill family members
Preexisting Conditions
defined as conditions for which treatment was given within 6 months of enrollment in the plan; insurers may exclude those conditions from coverage for 12 months
Vacation Pay
earned as employees complete time on the job; many companies require employees to work a specific period of time before they're eligible to use any accumulated (___)
Gross Earnings
earnings before taxes
True
employees may not be reimbursed for expenses in excess of the amounts that have been withheld from their paychecks
True
employers are required to define the pay status of all positions within the org; including which positions are exempt from FLSA
True
employers aren't required to use the government forms WH-381, 382, but their forms must include all information required by the regulations
True
employers can legally pay overtime to exempt workers working over 40 hours per week but aren't required to
True
employers can require medical certifications to verify requests for any qualified leave
True
employers match the amount of social security and medicare taxes that are withheld from ee's
Wage Garnishments
employers may be required by a court order or tax levy to withhold additional funds from ee paychecks to satisfy debt owed
True
employers must comply with FMLA until they drop below 50 employers for 20 consecutive work weeks in the year
15 days
employers must give ee this amount of time to obtain a medical certification
those pay employees who aren't farm or household workers, empmloyers who paid wages of $1500 or more in any calendar quarter or who employed one or more employees for a portion of a day in 20 or more different weeks during the previous or current year
employers subject to FUTA (Federal Unemployment Tax Act)
Geographic Pay
ensure that ee's in different locations are paid at rates competitive in the labor market for specific jobs and locations
Graded or Gradual Vesting
establishes a vesting schedule that provides for partial vesting each year for a specified number of years
EEOC
federal agency responsible for OWBPA (Older Workers Benefit Protection Act)
examples of professions receiving hazard pay
firefighters, police officers, working with infectious disease
Examples of Nonmonetary Compensation
flex time, telecommuting, onsite childcare, work life balance
the calendar year, any fixed 12 month period, 12 month period beginning when the FMLA leave begins, a rolling 12 month period that is measured back from the date the FMLA leave is used by an ee
four methods for employers to use in calculating the FMLA year
COLAs Cost of Living Adjustments
generally used during periods of high inflation to reduce the effects of wage compression
Gainsharing
group incentive program that involves ee's and managers in proving the org's productivity and sharing the benefits of success
Graveyard Shift
hours from 12am to 8am
Procedural Justice
how fair the internal process and procedures in determining pay scales are perceived to be
2 years until age 65
how long can long term disabillity be in effect
25% of annual comp
max amount of contribution that can be made for an individual ee each year on a profit sharing plan
Party in Interest
may be a fiduciary, a person or an entity providing services to the plan, an employer or ee organization, a person who owns 50% or more of the business, any relatives of those above or corporations that are involved with the plan in any of these functions
Engaged to Wait
means that ee's have been asked to wait for an assignment and this time is compensable
Compensation as a Percent of Operating Expenses
metric that provides info about the cost of human capital relative to other operating expenses (divide total comp costs by total operating costs)
True
midpoint progression is generally narrower for lower grades and increases for higher grades
Midpoint Progression
midpoints are established for each grade; difference between midpoints of consecutive grades
$455 per week or $23,660 per year
minimum amount an ee must make in order to be classified as exempt
use a fixed dollar amount or percentage of base pay
most common method for calculating a pay increase
Executives and outside members of the BOD
most common recipients of phantom stock
Title III of CCPA (Consumer Credit Protection Act)
protects ee's from being terminated if their wages are being garnished, sets limits on the amount of weekly garnishment, defines how disposable earnings are to be calculated
Commissions
provide incentives to sales ee's by paying them a percentage of the sale price for products and services sold to a customer
Stock Option
right to purchase an employer's stock at a certain price (strike price) at a future date within a specified period of time
Breaks
short periods lasting less than 20 minutes are considered compensable time
Profit Sharing
similar to scanlon plan; incentive based program that shares company profits
Workers Compensation
these laws require employers to assume responsibility for all ee injuries, illnesses and deaths related to employment
Review Process (incentive plans)
these typically correspond to the end of the org's fiscal years; sometimes they can be paid more frequently if ee's have a direct influence on revenue generation
Enterprise and individual
two categories of employers subject to requirements of the FLSA
key employee concentration and dependent care test
two discrimination tests for FSA plans
Cliff and Graded
two types of Delayed Vesting
garnishment of up to 25% of disposable earnings or multiplying the federal minimum wage by 30
two ways to calculate a garnishment
HMOs Health Maintenance Organization
type of managed care plan that focuses on preventative care and controlling health costs; generally use a gatekeeper like PCP
PPOs Preferred Provider Organization
use a network of health care providers for patient services and don't require patients to be referred by a gatekeeper; make copayments to providers in the network
Foreseeable Leave
when need for leave can be seen in advance, ee must give the employer at least a 30 day notice prior to anticipated start of leave
minimum wage, overtime, which jobs are exempt from FLSA, working conditions for children, info employers must keep about ee's related to payroll
FLSA established requirements in these 5 areas
False (only applies to workers not covered by another law)
FLSA regulations apply to all workers
False (has to be w/in 12 months of birth)
FMLA leave can be completed a year and a half after the birth of a child
False (can be kept w/ee file)
FMLA leave records must be kept in a file separate from the personnel file
Retirement Equity Act of 1984
REA lowered age limits for participation and vesting in pension plans
birth of a child/caring for infant, placement of adopted/foster child, spouse/daughter/son/parent care with a serious health condition, ee serious health condition, provide care for a covered service member with a serious injury/illness sustained while on active duty (26 weeks), leave for qualifying exigencies for families of members of the national guard/reserves
Reasons for FMLA Leave
analyze jobs, evaluate jobs, price jobs, create salary structure, place jobs in grades, communicate plan to org, administer plan, evaluate results
Steps in the compensation/salary administration process
False (accepts both positive and exception)
The DOL only accepts exception reporting for non exempt employees
Private Letter Ruling
This is a written statement issued to a taxpayer that interprets and applies tax laws to the taxpayer's represented set of facts. A PLR is issued in response to a written request submitted by a taxpayer. A PLR may not be relied on as precedent by other taxpayers or by IRS personnel.
summary plan description, an annual report and reports to individual participants of their benefit rights
Three types of reports required by ERISA
30 days
Under COBRA, when there is a qualifying event the employer has this many days to notify ee's of availability of COBRA
Bill Clinton, 1993
Who signed FMLA into office
False (you can!)
You are not allowed to use FSA funds for copays or deductibles
Prudent Person Standard of Care
a common law concept that requires all actions be undertaken with the care, skill, prudence and diligence...that a prudent man acting in like capacity, would use
401(k) Plans
a common type of deferred compensation plan; established by the Revenue Act of 1978
Target Benefit Plan
a hybrid plan; actuarial formulas calculate the contribution amount needed to reach a predetermined benefit amount at retirement
Sales Bonus Plan
a percentage of base pay compensates the ee for sales targets achieved
Fiduciary
a person or corporation or another legal entity that holds property or assets on behalf of, or in trust for, the pension fund
Qualified Deferred Compensation Plan
a plan that meets all ERISA requirements and protects ee's from loss of benefits due to employer mismanagement of pension funds
Example of Compensatory Time Off
a road maintenance worker employed by a city government may work 20 hours of overtime during a snow storm; instead of being paid time and a half for the overtime, the ee may receive 30 hours of additional paid time off to be used as paid vacation
Key Employee Definition
a salaried employee among the highest-paid 10% of ee's at the worksite
Bonus
additional compensation for performance above and beyond expectations and is paid in addition to an ee's base salary or hourly rate; considered discretionary
Shift Premium
additional compensation provided for ee's who work other than the day shift; can be paid as a percentage of base or can be factored into the hourly rate
Profit Sharing Plans (Discretionary Contributions)
allow employers to contribute deferred compensation based on a percentage of company earnings each year
Salary Survey
allow orgs to gather comp and benefits data that reflects current trends in the labor market; often provided by professional services vendors or comp consulting firms
Employee Stock Purchase Plans (ESPPs)
allows ee's to use after tax payroll deductions to purchase company stock at a discounted price; typically an offering period in which the ee deductions are accumulated until the purchase date, when the money is used to purchase company stock at a discounted rate
401(k) Plans
allows for contributions from both employees and employers; may not provide greater benefits to highly compensated ee's
COBRA
amended ERISA in 1986; requires businesses with 20 or more ee's to provide health plan continuation coverage under certain circumstances
HIPAA
amendment to ERISA, prohibits discrimination on the basis of health status as evidenced by an indivdiual's medical condition or history, claims experience, disability, etc.
Portal-to-Portal Act 1947
amendment to the FLSA; clarified what was considered to be compensable work time and established that employers aren't required to pay for ee commute time
Base Pay
amount of comp that the employer and the ee agree will be paid for the performance of particular job duties
every 5 years
an SPD reflecting all changes made must be prepared and distributed this often; unless no changes have occured
Funding of Plan (ERISA)
an actuary determines how much money is required to fund the accrued obligations of the plan, ERISA requires that these funds be maintained in trust accounts separate from business operating funds
Continuous FMLA
an ee is absent from work for an extended period of time, would require this type of leave
Intermittent FMLA
an employee is absent from work for multiple periods of time because of a single illness or injury
example of a seniority based compensation
an organization with a union representing it's workers ; in a union environment, annual increases are determined by what typically
Annual ERISA Reports
annual reports to be filed for all ee benefit plans (include financial statements, number of ees in the plan, name/addresses of the plan fiduciaries, etc.
Section 125 plans
another name for FSAs
Shift
any scheduled block of time during the work week when ee's perform job-related duties; have a specific start and end time and are most applicable to nonexempt ee's but can also affect exempt
Meal Periods
any time longer than 30 minutes are compensable unless you are working, like a receptionist that has to stay at the desk
Salary Level Test
anyone making less than 23,600K per year cannot be considered exempt
Nonexempt EE
anyone other than exempt under FLSA and must be paid in accordance with FLSA requirements
Enterprise Coverage
applies to businesses employing at least two ee's with at least $500K in annual sales and to hospitals, schools and government agencies
Individual Coverage
applies to org's whose daily work involves interstate commerce (includes those who have contact by phone with out of state customers, vendors or suppliers, assembly worker)
Restricted Stock
are actual shares, not the option to buy shares, like stock options; usually follows a vesting schedule designed for retention
Nonqualified Deferred Compensation - defer a portion of your comp until a later date
aren't protected by ERISA and are generally made available only to a limited number of employees at the exec level (top hat plans)
Dependent Care Account
authorized by section 129, employees may set aside a maximum of $5,000 to be used for dependent children or elders
Merit Increases
based on demonstrated performance, calculation is more complex; annual performance rating is the key determining factor for the amount of this
Cash Balance Plans (CBPs)
benefits are determined by using a hypothetical personal pension account; each month, the account is increased by a set rate, the account also accumulates interest
Accidental Death and Dismemberment Insurance (AD & D)
can provide insurance for ee's and their dependents in the event of an accident that results in the death of a covered person or loss of a bodily function (does not cover death due to illness)
Ragsdale vs. Wolverine Worldwide Inc, 2008
case that demonstrated what happens when an employer fails to designate leave as FMLA-qualified in a timely manner
Compensable Factors
characteristics that define and distinguish jobs from one another (example includes degree requirements or years of experience)
18 years old
child must be how old to work in nonfarm jobs that have been identified as hazardous by the law
14 and 15 years
children at this age can work in nonfarming, nonmining and nonhazardous jobs outside of school hours if they work no more than 3 hours per day or no more than 18 hours per work week, no more than 8 hours on a nonschool day
HAY System
classification method to uses a complex point factor system; jobs are evaluated using three factors: knowledge, problem solving and accountability
Restricted Stock
common stock offered to ee's; typically for execs or ee's who exhibit outstanding performance
Merit Matrix
commonly developed by HR as a tool for managers to use in planning increases for their work units; combines a performance rating with the ee's position in the salary range to recommend the amount of increase
Organization Incentives or Group Incentives
commonly used to increase productivity, foster teamwork and share financial rewards with ee's; several different kinds
ERISA Employee Retirement Income Security Act of 1974
created by Congress to set standards for private pensions and some group welfare programs such as medical and life insurance; requires orgs to file three types of reports each year
Employee Stock Ownership Plans (ESOPs)
defined contribution plan that allows ee's to own company stock
Comparable Worth/Pay Equity
describes the concept of minimizing pay disparities between jobs traditionally held by women, such as teachers, with higher paying jobs traditionally held by men, such as carpenters
Duties Test
determining the job responsibilities or duties of a position for purposes of defining exemption status
Profit Sharing
distribute pre-tax dollars to eligible ee's, typically based on a percentage of an ee's base salary; distribution typically occurs annually
External factors in developing compensation plans
economic factors, labor market, product market competition, tax and accounting
True
ee's must provide verbal notice of request for leave so the employer is aware of the need for FMLA-qualified leave, the expected timing/length and information about the medical condition (reasons for medical leave)
Positive Time Reporting
ee's record the actual hours they're at work along with vacation, sick or other time off
On-Call Pay
ee's who are required to respond to work-related issues on short notice, typically emergencies, and who must be available via pager, phone or email may be paid an hourly or daily premium
Board of Directors/ BOD
elected by shareholders to oversee the management of the corporation on behalf of its stockholders; can be members of the org or external to the org
External Conditions
exec team must decide whether the org's comp and benefits programs will lead, meet or lag in the market
teachers, sales ee's, attorneys, medical doctors
exempt from the minimum amount an ee must make in order to be classified as exempt
Statutory Deductions
federal tax, state tax (if required), Social Security, Medicare, Unemployment (if required), disability (if required), other local tax
Retention Bonus
financial incentive to make sure specific execs or key ee's from the company being acquired stay with the new org or if an org is shutting down and you need key folks to stay until the end
Improshare
form of gainsharing, sharing productivity gains with employees, this pays a bonus when time in production process is reduced
Golden Handcuffs
form of retention pay designed to keep key ee's from leaving the company
Benefits as a Percent of Operating Expenses
helps view increased benefit costs in the context of other expenses (divide total benefits cost by total operating expenses)
Total Rewards Philosophy
high-level mission statement used to guide the development and implementation of compensation and benefit programs that attract, motivate, and retain employees
Swing Shift
hours from 4pm to 12am
26 weeks, while seeking new employment
how long is unemployment compensation paid
6 years
how long must ERISA reports be maintained from the date they were due to be filed with the DOL
50% of ee's disposable income
how much for a child-support garnishment
7 days
if additional information is requested on the medical certification, employees have this long to return it to the employer
Reporting Pay/Reporting Premium
if an ee is called into work and there is no work available, the employer may be required by law to pay for a minimum number of hours of work
True
if an employee leaves the company before their FSA funds have been withheld and they've been reimbursed, they are not required to pay the company back
On Call Time
if the ee is on call off of the worksite then not compensable, but a medical intern waiting for an emergency is considered compensable time
Employer can delay coverage until 30 days after the date the ee provided notice
if the leave is foreseeable more than 30 days in advance and an ee fails to provide notice, what happens?
Federal Unemployment Tax Act (FUTA)
in 1939, moved unemployment taxing authority to the IRS; this rate is set by statue as a percent of workers' salaries
Line of Sight
in a performance based culture this is used and occurs when ee's know that their performance, good or bad, impacts their pay
100 participants
in order to benefit from simplified filling through ERISA you must have less than this number of participants
True
in states where the minimum wage is lower than federal minimum wage, federal supersedes
Self Funded Plan
in this plan the employer assumes the risk for unusual claims that may exceed the amount budgeted for the plan
POS Point of Service PLans
include network physicians but allow for referrals outside of the network; like HMOs these plans require ee's to select a PCP from doctors in the network; refers patients to specialists after PCP visit
Direct Compensation
includes payments made to the employee that are associated with wages and salaries
Communication and Implementation (incentive plans)
individual incentive plan objectives are ideally shared with the ee before or at the beginning of the review period; it is critical ee's have access to a plan doc to understand bonus plans
Medicare
instituted in 1965 by Lyndon Johnson, wanted to raise the standard of living for the poor and elderly in America; provided medical and hospital benefits for the elderly
Social Security Act of 1935
introduced by FDR, old age survivors or disability insurance to be paid to qualified workers upon retirement or disability or to their survivingng dependents in the event of a worker's death
Classification Method
involves identifying key benchmark positions (jobs common to orgs regardless of size or industry); once a job is matched to a benchmark position, it may be organized according to value on a vertical scale
Domestic Partnership
is a legal or personal relationship between two people who aren't legally married or in a legally recognized civil union
True
it's up to the employer to request additional info from the employee if they cannot determine if the leave is for a reason protected by FMLA; it's up to the ee to provide this additional info
Qualified Domestic Relations Orders (QDRO)
legal orders issued by state courts or other state agencies to require pension payments to alternate payees
Involuntary Benefits
legally mandated benefits
36 months
length of COBRA coverage if ee death, divorce/legal separation, dependent child no longer covered
29 months
length of COBRA coverage if reduction in hours when disabled or terminated when disabled
18 months
length of COBRA coverage if terminated, reduction in hours, or eligible for SSA benefits
True
light duty work assignments upon return to work are NOT counted against an employee's FMLA entitlement
Sabbaticals
long standing benefit provided in educational institutions in which after working for a specified period of time, they receive a year off with pay to pursue further education/conduct research or write books
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA)
made a number of changes to contribution limits, increasing many and allowing for catch-up contributions for ee's older than 50
Labor Market
made up of any sources from which an organization recruits new employees; a single org could recruit from several of these depending on the availability of skills
Seniority Based Compensation
makes pay decisions based on the length of time ee's have been in a position and on years of related experience; representative of an entitlement compensation philosophy
Paid Time Off (PTO)
many companies have combined all forms of time off into a single bucket / bank that ee's can use as they see fit to handle illness, vacation, personal, etc.
Point Factor Method
measures internal equity; provides org with a system of points that are assigned to the position being evaluated; based on total number of points a position receives a pay grade
WH-380 E
medical certification for ee with serious health condition
WH-384
medical certification for exigency leave for military families
WH-380 F
medical certification for family member with serious health condition
WH-385
medical certification for serious injury or illness to covered service member
5 business days
medical certification must be requested within this amount of time of an employee's leave request
Voluntary EE benefits
medical insurance, pension plans, time off, EAP, FSA, etc.
Legally Mandated Benefits
medicare, social security, unemployment insurance, FMLA, COBRA, workers comp
Qualified Plan
meets ERISA Requirements and provides tax advantages to both ee's and employers
True
most employer's fund work comp obligations by purchasing coverage through private insurance companies or state sponsored insurance funds
Golden Handshake
most often used when a CEO takes a position that entails a high risk of termination due to restructuring or change in direction or incentive to retire early
False
nonexempt ee's are not required to be paid the minimum wage for all compensable time
2 years
number of years in statue of limitations for back-pay recovery
Garbage removal, custodial services, food and lodging
occupations protected by the SCA (Service Contract Act)
Promotions
occur when ee's are moved into new positions with different duties and greater responsibilities or when they develop a level of experience and skill enabling them to assume added responsibilities in their current positions
Job Pricing
occurs when a new job is created or an existing job has undergone changes and is a common practice when administering compensation
Immediate Vesting
occurs when ee's are 100% or fully vested as soon as they meet the eligibility requirements of the plan
Wage Compression
occurs when new employees are hired at a rate of pay greater than that earned by incumbent employees for similar skills, education and experience
Reduced FMLA
one in which an ee's regular work schedule is reduced for a period of time
Extrinsic Reward
one in which esteem is achieved from others, such as fulfillment form working with a talented team of peers
Self Funded Plan
one in which the employer creates a claim fund and pays all claims through it; must conduct annual discrimination tests to ensure that HCEs aren't using the plan disproportionately to non-HCES
Defined Benefit Plan
one in which the employer provides a pension for ee's based on a formula; formula looks at salary and length of service; company is committed to paying a specified benefit amount when an ee retires
Scanlon Plan
one of the earliest pay for performance plans; 30s; ee's receive a portion of cost savings achieved through productivity gains and cost savings
Intrinsic Reward
one that encourages the individual ee self esteem, such as satisfaction from challenging and exciting assignments
Nonforfeitable Claim
one that exists because of a participants service
Fiduciary Responsibility
one that requires confidence or trust; HR professionals who have responsibility for advising, managing or administering TR programs find themselves in a role that requires the confidence and trust of both management and ee's to be effective
Exception Reporting
only changes to the regular work schedule are recorded , such as vacation, sick, or personal time
Call-Back Pay
paid to ee's who are called to work before or after their scheduled hours
Cliff Vesting
participants become 100% vested after a specified period of time (ERISA sets the max period at 5 years for qualified plans)
Participant Benefit Rights Reports
participants may request a report of the total benefits accrued on their half along with the amount of the benefit that is nonforfeitable; entitled to receive the report no more than once a year
Green Circle Rate of Pay
pay that falls below the minimum of the salary range
Plan Administrator
person designated by the plan sponsor to manage the plan
Physician Hospital Organizations PHOs
physicians join with a hospital and together rely on the structure to develop and market their services and to negotiate and sign contracts
True
positions may be exempt from one or all of the FLSA requirements (min wage, OT, child labor, etc)
Job Evaluation
process used traditionally to determine the value of jobs relative to each other in the org; it's an inexact science that attempts to remove subjectivity from the process as much as possible
Variable Compensation/Pay for Performance/Incentive Pay
programs that reward ee's for individual and/or organizational results; provides a line of sight between desired performance and the reward
Sick Pay
provided for ee's to use when they are ill or whne they need to care for a sick child/family member
Pay Differential
provides additional pay for work that is considered beyond the minimum requirements of the job; encourage ee's to perform work that is uncomfortable, out of the ordinary or hazardous
Salary Structure
provides an organized, systematic way of identifying base pay for employees in different jobs throughout the org; consists of a specified number of salary grades with a range of comp attached to each
Summary Plan Description (SPD)
provides plan participants with information about the provisions, policies and rules established by the plan and advises them on actions they can take in using the plan
Golden Parachute
provides significant benefits to an executive whose employment is terminated; usually under specific conditions such as a change in control of the company
2008 by the National Defense Authorization Act, NDAA
provision to FMLA incorporating military family leave provisions
Compensatory Time Off
public employers may compensate employees with this instead of cash payment for overtime worked
Red Circle Rate of Pay
refers to employees whose pay falls above the maximum of the salary range
Deferred Compensation
refers to tax-deferred retirement plans, such as individual retirement accounts, 401k programs or traditional employer pension plans
Pay Openness
refers to the degree of secrecy that exists around pay issues
Vesting
refers to the point at which ee's own the contributions their employer has made to the pension plan, regardless of whether they remain employed with the company
Salary (defined by DOL)
regular, predetermined rate of pay for a weekly or less frequent basis
Distributive Justice
relates to how closely pay reflects actual performance
Defined Contribution Plan
relies on contributions form ee's and employers to fund IRAs; the amount of the contribution is fixed but the amount of the benefit available upon retirement can vary based on type of investments made and returns earned
Small Business Job Protection Act of 1996
relieve the costs of administering qualified plans for small businesses, this act simplified actual deferral percentage tests for 401k plans and redefined highly compensated employees
Fair Labor Standards Act of 1938
remains a major influence on the basic compensation issues for businesses in the US
Omnibus Budget Reconciliation Act (OBRA) of 1993
require that health plans honor court issued qualified medical child support orders for dependent children of ee's; also group health plans required to provide coverage for dependent adopted children
must work for an employer covered by FMLA, employed for 12 months (need not be consecutive), worked for 1250 hours during the 12 months
requirements of employee to be eligible for FMLA
Service Contract Act 1965
requires any federal service contractor w/ a contract exceeding $2500 to pay its employees the prevailing wage and fringe benefits for the geographic area in which it operates, provide safe and sanitary working conditions and notify ee's of the minimum allowable wage for each job classification
Pension Protection Act (PPA) of 2006
requires employers to fully fund their pension plans to avoid future cash shortfalls in the plans as employees retire ; allowed employers to automatically enroll employees in 401k plans
Ranking Method
requires evaluators to compare the value of jobs to one another
Walsh-Healey Public Contracts Act 1936
requires government contractors w/contracts exceeding $10K (for other than construction work) to pay their ee's the prevailing wage for their local area as established by the sec of labor
Mental Health Parity Act of 1996
requires insurers to provide the same limits for mental health benefits in their plans as they provide for other health benefits
Salary Basis Test
requires that salaried ee's receive a predetermined amount of payment on a regularly set schedule, the ee's comp can't be reduced because of the variations in the quantity or quality of work
Entitlement Philosophy
rewards seniority or ee longevity; performance becomes secondary to time with the company or time in a particular job
Plan Design (incentive plans)
should be simple and make it easy convenient for ee's to understand and recall performance goals; research has found that a minimum bonus target of 10% is required to influence or change behavior
Compa-Ratio
simple calculation that compares an employee's base pay to the midpoint of the pay range; commonly used for comparison against a group of ee's and is especially useful when providing recommendations for pay increases/promotions/merit etc.
Golden Life Jacket
sometimes offered to execs of a company being acquired to ensure they remain
Broadbanding
splits positions in the company into just a few specific pay ranges, each range includes a variety of jobs; helps orgs remain flat and facilitates lateral career movement
EAP Employee Assistance Program
sponsored by the employer as a benefit; often as advantageous for employers as they are for employees because they're generally a low-cost benefit that provides a resource for ee's with problems that aren't work related and can't be solved in a work context
Pay Range
spread between the minimum and maximum pay for the job grade
True
state unemployment insurance rates different between various states
Incentive Stock Options (ISO)
stock options that can be offered only to ee's; don't face taxes at the time the options are exercised (don't have income to report until the stock is sold at a later date)
plan design, review process, communication and implementation
successful incentive-plan programs have these three critical phases
True
taxes to support social security and medicare are paid equally by the employer and employee
True
the IRS requires discrimination testing of FSA plans each year
True
the SCA expands the requirements of the Davis-Bacon and Walsh-Healthy Acts to contractors providing services to the federal government
Equal Pay Act (EPA) of 1963
the first antidiscimination act to protect women; prohibits discrimination on the basis of sex
Davis-Bacon Act 1931
the first federal legislation to regulate minimum wages
False (the employer, not government)
the government is responsible to designate leave requests as FMLA-qualified based on info received from ee's or someone designated by the ee to speak on their behalf
true
the maximum amount of a garnishment is the lesser of the two calculations
True
the rolling 12 month FMLA period is often the best for many ee's
Nonmonetary Compensation
these are intrinsic and extrinsic (blank) rewards
Top Hat Plans/Nonqualified Deferred Compensation
these benefits provide retirement funds that supplement qualified retirement benefits and aren't subject to ERISA discrimination testing requirements
Partially Self Funded Plan
these plans use stop-loss insurance to prevent a single catastrophic claim from devastating the claim fund; employer agrees to a preset maximum coverage amount that will be paid from the claim fund for each participant before the insurance company begins to pay the claim
Portal-to-Portal Act of 1947
this act requires employers to pay nonexempt ee's who perform regular work duties before or after their regular hours or for working during their lunch
Social Security Act of 1935
this also established unemployment insurance for workers for the first time
Older Worker Benefit Protection Act of 1990
this amends the ADEA to include a prohibition on discrimination against older workers in all ee benefit plans unless any age based reductions are justified by significant cost considerations
Performance Based Pay Programs
this can include merit increases or promotions; based on how well individual employees perform against the company's process for measuring performance
Cash Balance Plan
this is a portable pension plan; when an ee resigns, the funds may be withdrawn in one lump sum payment, maybe converted to an annuity or may remain the employer's account and be withdrawn at a later time
Overtime
this is paid to nonexempt workers for time worked exceeding 40 hours in one work week; one and one half times their regularly hourly wage rate
Nonsubscriber Plan
this is when companies self-fund work comp programs; paying the total costs of an injury or illness when they occur instead of paying insurance premiums (rare)
Fitness For Duty Certification
this may be required by employers; a certification from the ee's health care provider, attesting to their ability to return to work
Substitution of Paid Leave
this permits ee's to request or employers to require, the use of all accrued paid vacation, perosnal, family, medical or sick leave concurrently with the FMLA leave
Fee For Service Plans FFS
this plan is typically the most expensive to employers and ee's because it places no restrictions on the doctors or hospitals available to the patient ; requires patients to pay for services out of pocket and submit claims for reimbursement
Competency Based Compensation
this program focuses on ee's KSAs, tying individual pay to increased ability; place responsibility for advancement on each ee; greater the level of competence the higher level of pay
Nonqualified Plan
this type of retirement plan is one in which the benefits exceed the limitations of qualified plans or don't meet other IRS requirements for favorable tax treatment
example of a pay differential
this would be compensation you receive should your employer send you to a dangerous part of the world for work
continuous, reduced leave and intermittent
three types of FMLA leave
Compensable Time
time an ee works that is suffered or permitted by the employer; a nonexempt ee who is permitted to continue to work on an assignment after the end of business day to finish a project
Waiting to be Engaged
time spent by an ee who arrives at work 15 minutes early and reads the paper
True
time spent to prep for or clean up after a shift is considered compensable time
True
to be considered a qualified plan, a pension plan can't provide additional benefits for officers, shareholders, execs, supervisors or other highly compensated employees
Health Purchasing Alliances (HPAs)
to take advantage of economies of scale, smaller employers may form these with other employers in the geographic area; HPA negotiates and contracts for the plans on behalf of all members in the group
Performance Based Philosophy
use comp to shape a key component of the corporate culture, ee behavior, by rewarding performance or behavior that moves the org closer to achieving goals established by leaders
Nonqualified Stock Options
used for consultants and external members of the BOD, as well as for ee's; org receives a tax deduction when options are exercised and ee's pay tax on any gain they realize from the sale; income from the stock is treated as compensation
Compensation Strategy
used to determine how the resources available for rewards programs can be used to best advantage in attracting, motivating and retaining ee's
Money Purchase Plan
uses a fixed percentage of ee earnings to defer compensation; works well for orgs with relatively stable earnings from year to year...like profit sharing but not variable
Phantom Stock
usually in privately held companies to provide the benefits of ee ownership without granting stock
Internal Equity
value of jobs to each other relative to their value to the org
Salary Administration/Compensation Administration/Pay Administration
way an org develops pay structures and uses them to administer pay on a day to day basis
Revenue Act of 1978
what Act authorized FSAs
Disposable Earnings
what is left in an ee's paycheck after all legally mandated deductions have been made
1 hour
what is the shortest amount of intermittent leave time you can take for FMLA
exception reporting
what type of hour tracking/reporting is best used for exempt employees?
5 business days
when an employee requests leave, the employer must respond by when
bona fide seniority system, merit system, a system that measures quality or quantity of production, anything that measures factors other than sex fairly
when does the EPA allow for differences in pay?
Retroactive Designation (FMLA)
when leave is retroactively designated as FMLA-qualified by employers, as long as sufficient notice is given to the ee and doesn't cause harm to the ee
210 days of the end of the plan year
when must ERISA annual reports be filed
EEOC
who administers and enforces the EPA (equal pay act)
The State
who enacts and enforces work comp laws
