4. Comp and Bennys 15 Flashcards
Compensation
Cash based rewards provided to employees in recognition of and in exchange for the performance of their jobs.
Benefits
Noncash, or indirect, rewards provided to employees in recognition of and in exchange for the performance of their jobs.
Total Rewards
Speaks to HR’s responsibility to ensure that the organization’s total compensation and benefits programs, policies, and practices reinforce and support the short-term, long-term, and emerging and strategic objectives of the organization.
Worker’s Compensation
State laws intended to provide medical care to injured employees and death benefits to families of those who died. Worker’s comp is a “NO FAULT” system–INJURED WORKERS RECEIVE MEDICAL OR COMPENSATION BENEFITS REGARDLESS OF WHO CAUSED THE JOB-RELATED ACCIDENT.
Davis-Bacon Act, 1931
Minimum Wage! Was (and still is) limited to the construction industry– specifically, those contractors and subcontractors on:
-Any and all federal government construction contracts
-Nonfederal government construction projects in excess of $2,000 that receive federal funding.
Contractors and subs who meet either of these criteria are required to provide mechanics and labourers who are employed at the actual worksite with wages and benefits that are equal to (or better than) what workers on similar local projects receive.
Walsh-Healy Public Contracts Act (PCA), 1936
Minimum Wage! Requires contractors who have contracts with the federal gov. that exceed $10,000 to pay an established min. wage to workers employed through that contract. In addition to min. wage, W-H PCA addressed issues including Overtime pay and Safe and Sanitary working conditions.
Fair Labor Standards Act (FSLA), 1938
A law that establishes standard with respect to minimum wage, record-keeping, child labor standards, and overtime pay.
FSLA- Minimum Wage
- It is a president who must either sign or veto legislation to increase the minimum wage.
- State -if higher (wage) super-seeds Federal.
FSLA-Overtime
Non-exempt must be paid at a rate of 150% (time and a half), of his regular rate per hour. (which may be different than employee’s stated hourly wage rate) ??
FSLA- Child labor standards (youth employment standards)
- Restricts number of hours under 16 CAN work as well as TYPES of work under 18 can perform.
- Children under 14 cannot be employed (except farmwork)
- 14, 15 year olds limited to: n
- non school hours, 3 hours/school day, 18 hours/school week, 8 hours in a non school day, 40 hours in a non school week, Hours btwn 7am-7pm, 9pm (june1- Labor day.
- 14, 15 year olds are restricted from performing manufacturing, mining, and hazardous jobs.
- Youths who are 16 years and older may work an unlimited number of hours per day.
- FLSA does NOT require work permits or papers, States DO!
FSLA- Record Keeping
Employers must maintain accurate and complete records for each non-exempt employee of hours worked and wages earned. Certain identifying information (such at SS, address, and so on) is also required. No timekeeping required.
- Employer shall preserve for at least 3 YEARS payroll records, collective bargaining agreements, sales and purchase records, Records on which wage computations are based should be retained for 2 YEARS. e.e, time cards, piecework tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
- Records may be kept at place of employment or in a central records office.
- Collective Bargaining agreement may require to keep additional overtime-payments records or share them with the union at certain specified times.
Workweek
Any fixed and regularly recurring period of 168 hours (24 hours in a day, seven day a week)
Regular Rate of Pay
Includes more than hourly rate of pay. Also includes any incentives and commissions, but not bonuses (which unlike incentives are discretionary), pay for time not worked, premium pay for weekend or holiday work, and the like.
Executive Exemption
FLSA
- Employee’s Primary duty must be Managing the enterprise or Managing a customarily recognised department or subdivisions of the department.
- The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent.
- The employee must have the Authority to Lure or Fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight.
Administrative Exemptions
FSLA
- Employee’s primary duty must be the performance of Office or Non-manual work directly related to the management or general business operations of the employer or the employer’s customers.
- The employee’s primary duty includes the Exercise of Discretion and Independent judgment with respect to matters of significance.
Computer Employee Exemptions
FSLA
- Employee rate must not be less than $455 per week or not less than $27.63
- Employed as Computer Systems analyst, programmer, software engineer, simliarly skilled in the field perfomring these duties:
- Fill in more here
Outside Sales Exemption
FSLA
Minimum salary is not required to establish an exemption on the basis of outside sales.
-Primary duty must be Making Sales (as defined by FLSA) or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer.
-Must be Customarily and Regularly engage Away from the employer’s place or places of business.
Highly Compensated Employee Exemption
FLSA. Employee must:
- Earn $100,000 or more annually (of which at least $455 per week must be paid on a salary or fee basis.
- Perform Office or Nonmanual work.
- Customarily and regularly perform at least One of the duties of an Exempt executive, administrative, or professional employee identified in the Standard Tests for exemption.
Safe Harbour Provisions
Provision under which an employer that has made IMPROPER SALARY DEDUCTIONS can protect itself from losing the exemption. To do so, required to:
- Have a clearly COMMUNICATED POLICY prohibiting improper deductions and including a compliant mechanism.
- REIMBURSE employees for any improper deductions.
- Make a good faith commitment to comply in the future.
Portal to Portal Act, 1947
An amendment to the FSLA.
that offered clearer def of “hours worked” for the purpose of minimum wage and overtime payments.
-Employers only required to compensate workers for working time that they spend on ACTIVITIES THAT RELATE TO THE PERFORMANCE of their job.
Equal Pay Act (EPA), 1963
Law that prohibits discrimination on the basis of sex in the payment of wages or benefits to men and women who perform substantially equal (but not identical) work, for the same employer , in the same establishment, and under similar working conditions. (Establishment usually refers to one specific physical location.) Four factors are used as bases to assess the substantial equality of jobs under the EPA:
- RESPONSIBILITY: The degree of responsibility and accountability that an employer entrusts to and expects from a particular position.
- SKILL: The amount or defree of experience, ability, education, and training required to perfom the job.
- WORKING CONDITIONS: The physical surrounding of the position, as well any hazards that are associated with a particular position.
- EFFORT: The amount of physical or mental exertion required to perform the job.
Social Security Act (SSA), 1935
A social insurance program that is FUNDED THROUGH PAYROLL TAXES. Social Security has three primary components, which are now referred to as Retirement income, Disability benefits, and Survivors benefits.
Unemployment Insurance
A program intended to help employees financially “bridge” the gap between positions when an employee has lost his job through no fault of his own. Unemployment insurance was established as part of the federal Social Security Act of 1935 but is administered at the state level. Unemployment insurance is funded through employer taxes (except in three states, where employees contribute as well).
Medicare, 1965
An amendment to the Social Security Act that provides Hospital and Medical insurance for the elderly and people with disabilities. Four Parts: Hospital (A), Medical (B), Medical Advantage Plans (C), Prescription (D).
Medicare, Plan A
Helps pay for Inpatient Hospital care, Skilled Nursing care, and other services
Medicare, Plan B
Helps pay for items such as Doctor’s fees, Outpatient Hospital visits, and other medical services and supplies.
Medicare, Plan C
Portion that is available to persons who are eligible for Part A and enrolled in Part B through which private health insurance companies can contract with the federal gov. to offer Medicare benefits through their own policies.
Medicare, Plan D
Portion of Medicare that added prescription drug benefits for all individuals eligible for Medicare Part A and enrolled in Medicare Part B.
Employee Retirement Income Security Act (ERISA), 1974
A law that was established to protect the interests of those who participate, and the beneficiaries of those who participate, in employee benefit plans. ERISA applies only to programs established by private industry employers, ERISA establishes minimum participation and vesting standards for retirement programs and minimum standards for welfare benefits (including health) plans.
Immediate Vesting
-An employee is immediately and fully vested in the employer match as soon as it is processed to her account.
Vesting: Process by which an employee earns a nonforfeitable right to the employer’s contribution of her defined benefit/ defined contribution plan.
Immediate Vesting:
Graded Vesting
A vesting arrangement in which an employee earns a nonforfeitable right to an increasing percentage of her employer’s contributions over a period of years (no more than 6 years for full vesting.)
Cliff Vesting
A vesting arrangement in which an employee earns a nonforfeitable right to 100% of his employer’s contributions after a specified number of years (no more than three) but forfeits all rights to those contributions if his employment is terminated before he vests.
Pension Benefit Guaranty Corporation (PBGC)
A government corporation created by ERISA that functions as an insurer that provides a minimum guaranteed benefit for certain pension plans. PBGC protects participants in most defined benefit plans and cash balance plans (within certain limitations). PBGC is funded by insurance premiums that are paid by plan sponsors, not by general tax dollars. Funding also comes from investment income, assets from underfunded pension plans it has taken over, and recoveries
from companies formerly responsible for those plans.
Summary Plan Description
A document that employees (or beneficiaries) who become participants in a retirement plan that is covered under ERISA are entitled to receive, at no cost, from the plan administrator. The SPD describes what the plan provides and how it operates. It also provides information relative to when an employee can begin to participate in the plan, how service and benefits are calculated, when benefits become vested, when and in what form benefits are paid, and how to file a claim for benefits.
Revenue Act, 1978
Among many other changes, the Revenue Act added two sections to the tax code that essentially resulted in the creation of two new and ultimately very important employee benefits: Section 125 plans and 401k.
Cafeteria Plans
Three types: PoP, FSA, Full Cafeteria plans.
Premium Only Plans
With POP’s the simplest and most transparent (from employee perspective) of the three section 125 plans, employees pay for their portion of certain insurance premiums (health, dental, and so on) on pretax basis. The net effect is that each employee’s taxable income is reduced, which is how employers and employees can reduce taxes- and save money.
Flexible Spending Accounts
FSA’s take POP’s one step further. With FSA’s employees can set aside pretax dollars to pay for medical expenses that are not covered by insurance. FSA’s can also be set up for dependent care. Employees decide how much money to set aside for the following year, and that amount is automatically deducted from the employee’s pay on a pretax basis. After incurring and paying for eligible expenses, employees apply for reimbursement from the FSA.
Full Cafeteria Plan
Employees who offer full cafeteria plans provide their employees with specific amount of money they can use to pick and choose from a variety of benefits. (Although they offer distinct advantages, especially for employees, full plans are the most administratively burdensome of the 3 Section 125 options.
Section 125 Plans
Tax Code created by the Revenue Act of 1978 that created flexible benefits plans (often referred to as Cafeteria Plans). Can help employers as well as employees save money by reducing payroll taxes.
Retirement Equity Act (REA), 1984
An Amendment to Employee Retirement Income Security Act (ERISA) that incorporated a number of key revisions, many of which addressed the concerns of former (in the event of divorce) and surviving (in the event of death) spouse.
Consolidated Omnibus Budget Reconciliation ACT (COBRA), 1985
An Amendment to Title 1 of ERISA that requires employers who employed 20 or more people during the prior year to offer continuation fo group health care coverage to employees and their family members who experience certain qualifying events- events that would have otherwise resulted in the discontinuation of their health insurance benefits. COBRA places certain requirements on plan participants who want to extend coverage and places certain requirements on the plan provider, in particular with respect to notification requirements.
COBRA Qualifying Event
Events that would have otherwise resulted in the discontinuation of health insurance benefits for employees, their spouses, and dependent children.
Older Worker’s Benefit Protection Act (OWBPA), 1990
An amendment to the Age Discrimination in Employment Act (ADEA) that makes it illegal to discriminate against older workers with respect to benefits or to target older workers for layoffs.
Health Insurance Portability and Accountability ACT (HIPAA), 1996
An amendment to ERISA 2 Focuses: Security and portability of health care coverage, and privacy considerations.
-Intended to help workers experience greater security and portability with respect to health care coverage, even when an employee changes jobs. HIPAA also afforded significantly greater protections for employees who have or who have a family member with a preexisting medical condition.
HIPAA Privacy Rule
Designed to protect patients and other consumers of health care services from the unauthorised disclosure of any personally identifiable health information (protected health information, or PHI). Health information is considered to be personally identifiable if it relates to a specifically identifiable individual.
Family and Medical Leave Act (FMLA), 1993
FMLA entitles eligible employees (who work for covered employers) up to 12 weeks of unpaid, job protected leave during any 12-month period for one or more of the following reasons:
- The birth and care of the newborn child of the employee.
- Placement with the employee of a son or daughter for adoption or foster care.
- Care for an immediate family member(Spouse, child, parent) with a serious health condition.
- Medical leave when an employee is unable to work because of serious health condition.
Serious Health Condition
Means illness, injury, impairment, or physical or mental condition that involves:
- Always consult with legal counsel
- Employer’s can/will provide employees who notify them of their need for FMLA because of heir own serious health condition with a “Certification of Health Care Provider for Employee’s Serious Health Condition” or the equivalent thereof:
Serious Health Condition means an illness, injury, impairment, or physical or mental condition that involves
- Any period or incapacity or treatment connected with inpatient care (I.e. overnight stay) in a hospital, hospice, or residential medical care facility: OR
- A period of incapacity requiring absence of more than three calendar days from work, school, or other regular daily activities that also involves continuing treatment by (or under supervision of) a health care provider. OR
- Any period of incapacity due to pregnancy, or for prenatal care; OR
- Any period of incapacity that is permanent or long-term due to a condition for which treatment may not be effective (e.g. Alzheimer’s, stroke, terminal diseases, etc.) OR
- Any absence to receive multiple treatments (including any period of recovery there from) by, or on referral by, a health care provider for a condition that likely would result in incapacity of more than three consecutive days if left untreated (e.g. chemo, physical therapy, dialyses, etc.)
Uniformed Service Employment and Reemployment Rights Act (USERRA), 1994
A law that provides reinforcement rights for individuals who miss work because of “service in the uniformed services,” which is defined as voluntary or involuntary uniformed service.
Mental Health Parity Act (MHPA), 1996
A law that prohibits group health plans providers, insurance companies, and health maintenance orgs. (HMO’s) that offer mental health benefits from setting animal or lifetime dollar limits on mental health benefits that are lower than any such dollar limits for medical and surgical benefits.
