Presentation on theme: "Legally Required Benefits. Types of Benefits u Name the benefits you think should be offered by companies u Which of these benefits are required by law?"— Presentation transcript:
Types of Benefits u Name the benefits you think should be offered by companies u Which of these benefits are required by law? u Why would a company offer benefits if not required by law? – Employee expectations and satisfaction – Attract, motivate, retain – Competitiveness
Legally Required Benefits u Social Security u Workers’ Compensation u Unemployment Compensation u Family Medical Leave Act (FMLA)
Social Security u For death, retirement, disability, benefits for dependents of retired/disabled worker, survivor benefits u Employer and employee both pay (~7%) u Current dollars pay current expenses--it is not a savings account u Shortfall expected about 2020 A.D.
Social Security: Projected Surpluses and Shortfalls (In billions of dollars) 0 -100 200 300 100 -200 -300 -400 1987 1990 1995 2000 2005 2010 2015 2020 2025 Annual Surpluses Annual Shortfalls
Workers’ Compensation u For work related injuries: permanent and temporary total disabilities, permanent partial disability, survivor benefits, medical expenses, rehabilitation u Insurance paid for by employers
Exhibit 10-5 Primary Obligations of State Workers’ Compensation Programs u 1. Take initiative in administering the law. u 2. Continually review performance of the program and be willing to change procedures and to request the state legislature to make needed amendments. u 3. Advise workers of their rights and obligations and assure that they receive the benefits to which they are entitled. u 4. Apprise employers and insurance carriers of their rights and obligations; inform other parties in the delivery system such as health care providers of their obligations and privileges. u 5. Assist in voluntary and informal resolution of disputes that are consistent with law. u 6. Adjudicate claims that cannot be resolved voluntarily. Source: J.V. Nackley, Primer on workers’ compensation (Washington, DC: The Bureau of National Affairs, 1987).
Unemployment Compensation u For subsistence between jobs, employer provides stability u Varies by state u Financed by employers u Experience rating u Eligibility, coverage, duration, amount
Exhibit 10-1 Eligibility Criteria for Unemployment Insurance Benefits u To be eligible for unemployment insurance benefits, an individual must: –1. Not have left a job voluntarily –2. Be able and available to work –3. Be actively seeking work –4. Not have refused an offer of suitable employment –5. Not be unemployed because of a labor dispute (exception in a few states) –6. Not have had employment terminated because of gross violations of conduct within the workplace
Exhibit 10-2 Unemployment Benefit Amounts for Selected States STATE Alabama California Florida WEEKLY BEN. AMOUNT (WBA) MINIMUM BASE PERIOD AND QUALIFYING WAGES WAITING PERIOD MAXIMUM TOTAL BENEFIT INCLUDING EXTENDED BENEFITS $22 min., $180 max. eff. 7/3/94 $40 min., $230 max. $10 min., $250 max. Lesser of 26 times WBA or 1/3 base period wages 26 times WBA, up to 1/2 base period wages 1/2 of weeks worked in base period 1 1/2 items high quarter wages; at least $774.02 $1,300 in high quarter, or $900 in high quarter and total base period wages of 1 1/4 times high quarter wages 20 times claimant’s average weekly wages (at least $20) None One week
Family Medical Leave Act (FMLA) u 12 “work weeks” of unpaid leave during 12 mo period u Reasons: --Birth or adoption of a child, foster child – Care for close family member with serious health condition – Your own serious health condition makes you unable to perform your job u Firms with 50 or more employees (5% of employers, 60% of workers are covered) u Key exemptions for highly compensated employees u Return to an “equivalent position”