1: Employee Benefits: The Environment Flashcards
Functional approach to employee benefit planning
A method that provides a framework for evaluating and designing benefits on a risk-and-need basis and following a total compensation approach
Broad view of employee benefits (general definition)
The broad view considers employee benefits to be virtually any form of compensation other than direct wages paid to employees.
It includes both government-mandated benefits and private plans. Thus, such things as the employer’s share of Social Security tax on behalf of an employee, paid vacations and pension plans are considered to be employee benefits under the broad view.
Categories of benefits that generally are considered to fall under a broad view of employee benefits (a - e)
A broad view of the term “employee benefits” generally includes the following types of benefits:
(a) Legally required benefits
(b) Payments for time not worked, e.g., rest periods, lunch periods, vacations and holidays
(c) Employer’s share of medical and medically related benefits
(d) Employer’s share of retirement and savings plan payments
(e) Miscellaneous benefits, e.g., employee discounts, severance pay, education expenditures and child care, etc.
What benefits are typically excluded when the term “employee benefits” is viewed and defined in a narrow sense? [In general, then two specifics]
The benefits typically excluded when the term “employee benefits” is viewed and defined in a narrow sense are those that are legally mandated, notably the employer funding for Social Security benefits and workers’ compensation.
Quick definition of narrow view
The narrow view, on the other hand, can be summarized as any type of plan sponsored or initiated unilaterally or jointly by employers and employees and engaged in providing benefits that result from the employment relationship and that are not underwritten or paid directly by government.
Name the legally-required benefits
1) Employer’s share of funding for Social Security benefits for the elderly and disabled and their dependents that includes retirement income, survivor and disability insurance, and hospital and medical insurance (Old-Age, Survivors, Disability, and Insurance (OASDI));
2) Workers’ compensation (WC);
3) Unemployment insurance (UI);
4) State temporary disability income insurance
