Benefit Determination Process
Factors Influencing Choice of Benefit Package
- employer factors - employee factors
Tax reforms --1982, 1986
- permit individual retirement accounts (IRAs) for eligible employees. - established 401(k) program
Why the growth in employee benefits?
- wage and price controls ( during WWII and Korean war) - unions -employer impetus - cost effectiveness of benefits - government impetus
Benefit growth
25% of payroll in 1959...more than 40% today ...4 trillion per year
Family Medical Leave Act 1993
Mandates 12 weeks of leave for all workers at companies that employ 50 or more people
Discrimination Legislation (age discrimination in employment act, civil rights act, pregnancy disability act, various state laws)
benefits must be administered in a manner that does not discriminate against protected groups (race,color,religion, sex, national origin, age, pregnancy)
Fair Labor Standards Act 0f 1938
created time-and-a-half overtime pay
Consolidated Omnibus Budget Reconcilliation Act (COBRA) 1984
employees who resign or are laid off through no fault of their own are eligible to continue receiving health coverage under employer's plan at a cost borne by the employee
Employee Benefits
part of the total compensation package, other than pay for time worked, provided to employees in whole or in part by employer payments e.g. insurance, vacations, etc.
Employee Retirement Income Security Act 0f 1974
plan must vest after 5 years' employment. provides worker some financial coverage when a company and its pension plan go bankrupt
Health Maintenance Act of 1973
required employers to offer alternative health coverage (HMOs)