1. 13 Providing Employee Benefits What Do I Need to Know
Chapter
What Do I Need to Know
1. Discuss the importance of benefits as a part of employee compensation.
 2. Summarize the types of employee benefits required by law.
 3. Describe the most common forms of paid leave.
 4. Identify the kinds of insurance benefits offered by employers.
 5. Define the types of retirement plans offered by employers.
 6. Describe how organizations use other benefits to match employees’ wants and needs.
 7. Explain how to choose the contents of an employee benefits package.
 8. Summarize the regulations affecting how employers design and administer benefits programs.
 9. Discuss the importance of affectively communicating the nature and value of benefits to employees.

2. The Role of Employee Benefits
Employee benefits are compensation received in forms other than cash.
Benefits contribute to attracting, retaining, and motivating employees.
Organizations pay a growing share of compensation in the form of benefits for reasons that include:
Required by law
Favorable tax laws
Employers can secure a better deal
Can set employers apart in the competition for talent
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3. Benefits as a Percentage of Total Compensation
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4. Benefits Required By Law
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Benefits Required By Law
Federal and state governments require various forms of social insurance to protect workers from the financial hardships of being out of work such as:
Social Security
OASDHI
Covers 90 percent of employees
Unemployment compensation
Four primary objectives
Employer’s experience rating
To receive benefits, workers must meet four conditions
Workers’ compensation
Benefits fall into four major categories
Employers must provide unpaid leave for certain family and medical needs:
Family and Medical Leave Act (FMLA)
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5. Benefits Required By law
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Benefits Required By law
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6. Optional Benefit Programs
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Optional Benefit Programs
Other types of benefits are optional for the employer such as:
Insurances
Life
Term life policies
Medical
COBRA
HMO
PPO
Flexible spending accounts
Employee Wellness Programs (EWP)
Long-term care
Disability
Short-term
Long-term
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7. Health Care Costs In Various Countries
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Health Care Costs In Various Countries
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8. Optional Benefit Programs
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Optional Benefit Programs
Other types of benefits are optional for the employer such as:
Retirement plans
Contributory plans
Noncontributory plans
Defined benefit plan
ERISA
PBGC
Defined contribution plans
Cash balance plans
Paid leave
Vacations
Holidays
Sick leave
Personal days
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9. Sources of Income For Persons 65 and Older
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10. Value of Retirement Savings Invested at Different Ages
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11. 11 of 21
Percentage of Full-Time Workers Who Participate in Selected Benefit Programs
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12. Government Requirements for Vesting and Communication
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Government Requirements for Vesting and Communication
Vesting rights:
Earn a right to a pension upon retirement
Two standard schedules
Exceptions:
Top-heavy pension plan
Multi-employer pension plans
Summary plan description
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13. “Family-Friendly” Benefits
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“Family-Friendly” Benefits
Family-friendly benefits include:
Family leave
Child care
College savings
529 savings plans
Elder care
Information and support
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14. Percentage of Employers Offering Various Levels of Child-Care Benefits
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15. Selecting Employee Benefits
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Selecting Employee Benefits
Employers have wide latitude in creating the total benefits package they offer employees.
Decisions about which benefits to include should take into account:
The organization’s goals
The organization’s budget
The expectation of the organization’s current employees and those it wishes to recruit in the future
A logical place to begin selecting employee benefits is to establish objectives for the benefits package.
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16. An Organization’s Benefits Objectives
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An Organization’s Benefits Objectives
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17. Cafeteria-Style Benefits
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Cafeteria-Style Benefits
Cafeteria-style plans offer employees a set of alternatives from which they can choose the types and amounts of benefits they want.
Advantages include:
Employees become more aware of the value of the benefits
Employees can match their needs to the benefits
Avoids the cost of non-valued benefits
Disadvantages include:
Higher administrative costs
Selection of frequently used benefits
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18. Costs of Employee Benefits
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19. Legal Requirements for Employee Benefits
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Legal Requirements for Employee Benefits
Organizations looking for ways to control staffing costs may look for ways to structure the workforce so as to minimize the expense of benefits such as:
Requiring overtime rather than hiring new employees
Hiring part-time workers
Using independent contractors
Other legal requirements involve:
Tax treatment of benefits
Qualified plans
Antidiscrimination laws
PDA
ADEA
ADA
Accounting requirements
FASB
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20. Communicating Benefits to Employees
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Communicating Benefits to Employees
Organizations must communicate benefits information to employees so they will appreciate the value of their benefits.
Communication is essential so that the benefits can achieve their objective of attracting, motivating, and retaining employees.
An investment of creativity in employee communication can reap great rewards in the form of committed, satisfied employees.
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21. Techniques for Communicating Employee Benefits
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Techniques for Communicating Employee Benefits
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