employee benefits
are the 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., health insurance, paid leave, pension, workers’ compensation, etc.
types of benefits
1.Legally Required Benefits
2.Retirement and Savings Plan Payments
3.Life Insurance
4.Medical and Medically Related Payments
5.Payments for Time Not Worked
- Paid time off; vacations & holidays; sick leaves
6.Miscellaneous Benefits
- Employee continuous education
- Child care; Elder care
legally required benefits
- social security
- unemployment insurance
- workers’ compensation
- family and medical leave
- health care
social security tax?
flat payroll tax on employees and employers
social security – insurance types
- Old age (retirement) insurance
- Survivor’s insurance
- Disability insurance
- Health insurance
–> Most (over 90%) US employees are covered
how to qualify for social security benefits?
–> by working in covered employment, and earning a specified amount per quarter
- The amount needed for a credit in 2022 is $1,510.
- You can earn a maximum of four credits for any year.
- For retirement benefits, the required number of credits is 40 (equivalent to 10 years of work if you earn the maximum number of credits per year)
social security – funding
Employers and employees share Social Security cost through a payroll tax. The percentage is set by law
- current tax rate for social security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total
current contributions pay current beneficiaries
unemployment insurance tax?
Payroll tax on employers that depends on state requirements and experience rating
unemployment insurance
Federally mandated program administered by states to minimize unemployment hardships
what is unemployment?
unemployed IF:
- do not have a job,
- have actively looked for work in prior 4 weeks,
- and are currently available for work
- persons who were not working and were waiting to be recalled to a job from which they had been temporarily laid off are also included as unemployed
Receiving benefits from the Unemployment Insurance (UI) program has no bearing on whether a person is classified as unemployed
what eligibility requirements do workers have to meet to receive benefits for unemployment insurance?
- You must meet the State requirements for wages earned or time worked during an established period of time referred to as a “base period”. (In most States, this is usually the first four out of the last five completed calendar quarters prior to the time that your claim is filed.)
- You must be determined to be unemployed through no fault of your own(determined under State law), and meet other eligibility requirements of State law
unemployment insurance – funding
- most funding comes from federal and state taxes on employers
- Size of unemployment tax imposed on each employer depends on the employer’s experience rating:
* Number of employees a company has laid off in the past and cost of providing them with unemployment benefits.- Careful workforce planning can minimize layoffs and keep their experience rating favorable
workers’ compensation – employer requirement
Provide coverage according to state requirements; Premiums depend on experience rating
worker’s compensation – definition
State programs that provide benefits to workers who suffer work-related injuries or illnesses, or to their survivors.
Benefits fall in four major categories:
- medical care
- temporary or permanent disability payments
- survivor death benefits
- rehabilitation and training services
worker’s compensation operate under what principle?
no-fault liability
no-fault liability
- Employee does not need to show that the employer was grossly negligent in order to receive compensation.
- Employer is protected from lawsuits
worker’s compensation – funding
- Some states have a single state fund.
- Most states allow employers to purchase coverage from private insurance companies.
- Most also permit self-funding by employers
what are the costs workers’ compensation insurance depend on?
- Kinds of OCCUPATIONS involved: low-risk occupations have low premiums
- STATE where company is located
- Employer’s EXPERIENCE RATING: Unfavorable experience ratings lead to higher insurance premiums
family and medical leave – employer requirements
Up to 12 weeks of unpaid leave for childbirth, adoption, or serious illness
family and medical leave act (FMLA) of 1993
Requires organizations with 50 or more employees to provide up to 12 weeks of UNPAID leave:
- After childbirth or adoption;
- To care for a seriously ill family member;
- For an employee’s own serious illness;
Employers must guarantee these employees SAME OR COMPARABLE JOB when they return to work
family and medical leave – when employees experience pregnancy and childbirth, employers must also comply with??
pregnancy discrimination act – If an employee is temporarily unable to perform her job due to pregnancy, the employer must treat her in the same way as any other disabled employee
e.g.,
modified tasks, alternative assignments, disability leave, or leave without pay
health care – employer requirements
For employers with at least 50 employees, payment of a fee to the federal government if the employer does not meet conditions for providing health insurance benefits.
health care – patient protection and affordable care act
Congress passed the act in 2010
law requires medium-sized and large comanies to choose b/w offering health insurance that meets its standards or paying a penalty, which took effect in 2015
