1. Section 5-4 Employee Benefits
Advanced Financial Algebra

2. What are the benefits of a job?
Required Benefits
Unemployment insurance – offers temporary assistance to people who are out of a job through no fault of their own
Worker’s compensation – offers assistance to employees who are injured while working at their job
Paid sick leave - Any employee who works in California for 30 days or more is entitled to receive paid sick leave. An employer is required to provide a minimum of 3 days, or 24 hours, of sick leave per year, and an employee may begin to take sick leave after 90 days of employment. Paid sick leave may accrue at a rate of 1 hour for every 30 hours worked, and must be reflected on each wage statement.

3. Other possible benefits (not required) - vary by job and company
Insurance (health insurance, life insurance, and disability insurance)
Check for family health care vs. individual only health care
Paid vacation time
Paid time off (PTO) – often holiday pay
Paid sick leave
Retirement plans
401k
Pension
etc
Stock ownership plans
Childcare leave
and more…

4. Example 1 – paid vacation time
Alan works for a printing company and is now making $54,080 per year. It has been a little over 4 years since he was hired. When he was hired, he was told that he had 5 days of paid vacation time. For each year that he worked at the company, he would gain another 2 days of paid vacation time to a maximum of 20 days. How many paid vacation days does he now get at the end of 4 years of employment and how much money will he earn while he is on vacation?
SOLUTION:
His weekly salary = $54,080/52 weeks = $1,040 per week
Since he has already worked for 4 years, he gets the 5 days of vacation he started with for the 4 years he worked = = 13 days of paid vacation.
# paid work weeks = 13/5 days he works per week = 2.6 weeks of paid vacation
$1,040 per week * 2.6 weeks = $2,704 paid vacation

5. Example 2 – employer contribution for health care
Frieda’s employer offers her family health care as an employee benefit. She must contribute 12% of the cost, and her employer will cover the rest. Frieda gets paid biweekly, and $88.50 is taken out of each paycheck for her portion of the family health care coverage. How much does Frieda’s employer contribute for her coverage?
SOLUTION:
Frida’s contribution (payment) = $88.50 per check * 26 paycheck in a year since she is paid every other week = $2,301 per year that she pays total from her check
She only paid 12% = .12 as a decimal
12% of the total = $2,301 (the amount she paid)
.12x = algebraic equation
x = $19,175 = total cost of her health care divide both sides by .12
Employer’s contribution = total – her part = $19,175 - $2,301 = $16,874

6. Example 3 – pension
Marina is the director of the Washington Performing Arts Center. Her employer offers a pension and Marina is planning on retiring at the end of this year after 25 years of employment. She will receive 1.5% of his or her average salary for the last 5 years of employment multiplied by the number of years worked. Marina would receive this amount each year until her death. Her salaries for the last 5 years are $88,900; $92,200; $96,000; $98,000; and $102,000.
SOLUTION:
Marina’s 5-year average salary = 𝑡𝑜𝑡𝑎𝑙 # 𝑜𝑓 𝑦𝑒𝑎𝑟𝑠 = 88,900+92,200+96,000+98, , = $95,420
Pension = 1.5% of that average * # years worked = (.015) * $95,420 * 25 years = $35,782.50
Marina will receive a pension of $35, per year until her death.

7. Example 4 – unemployment
In Reese’s state, the weekly unemployment compensation is 60% of the 26-week average for the two highest-salaried quarters. A quarter is 3 consecutive months. For July, August, and September, he earned a total of $9,024. In October, November, and December, he earned a total of $9,800. Determine Reese’s unemployment compensation.
SOLUTION:
26 weeks = half of a year = 6 months (July, August, September, October, November, December)
Total pay for those six months = $9,024 + $9,800 = $18,824
26-week average = 𝑡𝑜𝑡𝑎𝑙 # 𝑜𝑓 𝑚𝑜𝑛𝑡ℎ𝑠 = $18, = $724 Reese earned on average per week
He gets 60% of that average = (.60) * $724 = $ per week

8. Assignment: Pg 318 # 4, 6, 8, 9
4. When Luis started his job, his employer told him that he would receive 2 vacation days for each full year he worked. Let x represent the number of years he has worked for the company and y represents the number of paid vacation days he earned.
a. Write an equation that models the relationship between these two variables, x and y.
b. How long will it take him to earn 18 paid vacation days? Set the equation from a. equal to 18 and solve it. 6. 8. 9.