Introduction To Legislation, Unions, And A Changing Workforc ✓ Solved
Introduction1legislation Unions And A Changing Workforce Have Expand
Legislation, unions, and a changing workforce have expanded benefit offerings. Employee benefits have grown in importance and variety as membership-based rewards offered to attract and keep employees. While these benefits do not directly affect a worker’s performance, inadequate benefits can lead to employee dissatisfaction. Some of the benefits we enjoy today were established under Franklin Roosevelt’s New Deal in response to the Great Depression, most notably unemployment insurance and social security. Benefit and service offerings can add about 30% to an organization’s payroll cost, making benefits a focus of negotiations with employees when large wage and salary increases are not feasible.
Contemporary Benefits Offerings
Contemporary benefits offerings reflect a diverse workforce challenge, as organizations must design benefits packages that are both lawful and attractive. Such packages may include legally required benefits like social security, unemployment compensation, workers’ compensation, the Family and Medical Leave Act (FMLA), health insurance, retirement plans, time off, disability, and life insurance.
Legally Required Benefits
Social Security is financed by equal employee and employer contributions based on a percentage of earnings. It provides income for retirees, disabled workers, and surviving dependents, as well as some health insurance coverage through Medicare. Unemployment Compensation is funded by employers who pay a combined federal and state tax imposed on the taxable wage base, with coverage typically lasting for 26 weeks. Workers’ Compensation pays expenses and/or compensates losses resulting from work-related accidents or illness, regardless of fault, while the FMLA requires employers with 50 or more employees to allow up to 12 weeks of unpaid leave for family or medical reasons.
Voluntary Benefits
Voluntary benefits include health insurance, which has become critical due to rising healthcare costs. Traditional health insurance covers hospitalizations, major medical expenses, and medical/surgical needs but is typically the most expensive. Alternative options such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) also exist, offering different levels of coverage and cost-sharing structures. Consumer-driven health plans aim to make healthcare decisions less daunting for employees.
Health Insurance Continuation
The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides a way for employees to continue their health benefits for up to three years after leaving a job, with costs borne by the employee. The Health Insurance Portability and Accountability Act (HIPAA) also imposes regulations on confidentiality of employee health information.
Retirement Benefits
The Employee Retirement Income Security Act (ERISA) of 1974 introduced rules regarding pension benefits, enabling portability of pension rights and establishing the Pension Benefit Guaranty Corporation (PBGC). Employees can benefit from both defined benefit plans, which provide a guaranteed payout at retirement, and defined contribution plans, where the amount received depends on the success of account investments. Individual Retirement Accounts (IRAs) and 401(k)s allow workers to save for retirement with tax benefits attached.
Paid Time Off
Paid time off policies, including vacation and holiday leave, are often linked to the length of employment. Similarly, disability insurance programs provide salary continuation for employees who find themselves unable to work due to injury or illness.
Survivor Benefits
Group term life insurance is a typical survivor benefit, and additional travel insurance may also be provided for business-related fatalities. Employee assistance programs, credit unions, and tuition reimbursement are other types of benefits that may be offered as part of a comprehensive employee package.
Flexible Benefits
Flexible benefits programs allow employees to choose the benefits that best suit their needs. This includes flexible spending accounts, where employees can set aside a portion of pre-tax income for specific services. Modular plans and core-plus options also provide pre-designed benefits packages that employees can select from.
Conclusion
In summary, the landscape of employee benefits has evolved significantly from the New Deal era to the present day. Organizations face the challenge of designing benefits packages that not only comply with legal requirements but also attract and retain a diverse workforce. As healthcare and retirement needs continue to reshape the workforce, employers must remain mindful of these changing dynamics and strive to provide comprehensive benefit offerings.
References
- United States Social Security Administration. (2023). Social Security Basic Facts.
- U.S. Department of Labor. (2023). Unemployment Insurance.
- National Safety Council. (2023). Workers’ Compensation.
- U.S. Department of Labor. (2023). Family and Medical Leave Act (FMLA).
- HealthCare.gov. (2023). Health Insurance Marketplaces.
- U.S. Department of Labor. (2023). Employee Retirement Income Security Act (ERISA).
- Internal Revenue Service. (2023). Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).
- U.S. Department of Labor. (2023). Paid Leave.
- American Council on Exercise. (2023). What is a Flexible Benefits Plan?
- Centers for Medicare & Medicaid Services. (2023). HIPAA Privacy Rule: Overview.