MGT 491 - Compensation Mgmt. - Chapter 17 Notes

MGT 491 - JSU - Compensation Mgmt. - Chapter 17 Notes

Minimum wage, hours of work (including overtime), and child labor

The Fair Labor Standards Act (FLSA) covers three major provisions. What are those three provisions?

Minimum-wage

__________ legislation is intended to provide an income floor for workers in society’s least productive jobs.

Benefits

___________ are now listed as the top reward contributing to employee satisfaction.

Benefits

_______ are affected by statutory or common law, many imposed by tax laws.

workers compensation, social security, unemployment compensation, FMLA, COBRA, and HIPPA

The legally required benefits that an employer must have/offer include:

workers compensation

A form of no-fault insurance, covers injuries/diseases arising from employment.

workers compensation

What benefit covers injuries or diseases arising from employment?

workers compensation

Medical care, temporary or permanent disability payments, survivor benefits, rehabilitation and training are coverages that fall under:

True

True or False:
Workers compensation is covered under state laws and not federal laws.

False

True or False:
Workers compensation is covered under state federal and not state laws.

state

Workers compensation is covered under ____ laws.

benefit levels and costs

All states have fairly similar workers compensation coverage, with differences occurring primarily in:

Social Security

Nearly every American worker is covered under the ____________ benefit.

True

True or False:
The money for benefits under Social Security comes from employees, employers, and self-employed.

Social Security

The money for benefits under _________ comes from employees, employers, and self-employed.

employees, employers, and self-employed.

The money for benefits under Social Security comes from:

True

True or False:
Under Social Security, money currently collected pay current beneficiaries

current

Under Social Security, money currently collected pay _____ beneficiaries.

True

True or False:
Under Social Security benefits, Retiree’s numbers rise, with no corresponding increase in contributors.

Social Security

Under __________ benefits, Retiree’s numbers rise, with no corresponding increase in contributors.

old age or disability benefits, benefits for dependents, benefits for surviving family members, and lump-sum death payments.

Benefits for Social Security fall under four (4) categories. What are those categories?

Social Security

Old age or disability benefits, benefits for dependents, benefits for surviving family members, and lump-sum death payment describe benefits for ______________.

True

True or False:
Workers must qualify for Social Security benefits by working in covered employment, and earning a specified amount per quarter.

Social Security

Workers must qualify for ________ benefits by working in covered employment, and earning a specified amount per quarter.

Working in covered employment, and earning a specified amount per quarter.

What are the stipulations and guidelines for qualifying for Social Security benefits?

Unemployment Insurance

Financed by employers federal and state unemployment insurance tax. Federal garners 6.2% of the first $7,000. States impose a tax above that amount. A company’s experience rating may lower percentages.

Unemployment Insurance

________ is financed by employers federal and state insurance tax.

experience rating

What can lower an organizations unemployment percentage obligations?

6.2% ; $7,000

Federal garners _____% of the first $______ for unemployment insurance.

more

Regarding unemployment insurance, if the feds get the first 6.2% of the first $7,000, does the states get more or less than that?

unemployment

States require a ‘base period and must be through no fault of their own.

States require a base period and unemployment must be through no fault of their own

What are the eligibility requirements for unemployment?

earnings over the past year, up to a state maximum

Weekly benefit amounts for unemployment benefits are based on:

26

Historically, the maximum number of weeks for Unemployment Insurance was ____ weeks.

1958 - 1961

Many states extended the unemployment insurance period between the years:

53

Emergency Unemployment Compensation program extended benefits to as long as ____ weeks from 2008 – 2013.

26

Currently, the emergency unemployment insurance benefits is set to ____ weeks.

raise their unemployment insurance rate.

Once an organization/company is “charged” for unemployment, this will:

True

True or False:
Unemployment benefits are ‘charged’ against the most recent employer.

the most recent employer

Unemployment benefits/payments are ‘charged’ against who?

with a well designed human resource planning system

Organizations can control their unemployment insurance rates how?

pre-layoff behavior ; compliance

A benefit administrator should audit _______ and _______ with UI requirements.

benefit administrator

A ________, who should be within the HR department, should audit pre-layoff behavior and compliance with UI requirements.

1993

What year was the Family Medical Leave Act enacted?

50

The FMLA covers organizations with ____ or more employees.

Family Medical Leave Act (FMLA)

________ covers companies with 50 or more employees and was enacted in 1993.

12

FMLA provides employees with up to ___ weeks of unpaid leave for a covered incident.

unpaid

Choose: Paid / Unpaid
FMLA is a (paid/unpaid) leave.

True

True or False:
Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted in 1985 and applies to companies with 20 or more employees and extends health care coverage during certain events.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

__________ was enacted in 1985 and applies to companies with 20 or more employees and extends health care coverage during certain events.

1985

Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted in ____ and applies to companies with 20 or more employees and extends health care coverage during certain events.

20

Consolidated Omnibus Budget Reconciliation Act (COBRA) was enacted in 1985 and applies to companies with _____ or more employees and extends health care coverage during certain events.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

__________ extends health care coverage during certain events.

102

An employer can charge individuals up to ____% of the premium for COBRA insurance.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

_______ has a brief qualifying period of 18 months.

18 months

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), an employee/individual can continue their medical coverage for up to a maximum period of ________.

True

True or False:
Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 and was designed to lessen denial of preexisting conditions and prevent discrimination based on ones health.

Health Insurance Portability and Accountability Act (HIPAA)

_______ was enacted in 1996 and was designed to lessen denial of preexisting conditions and prevent discrimination based on ones health.

1996

Health Insurance Portability and Accountability Act (HIPAA) was enacted in _____ and was designed to lessen denial of preexisting conditions and prevent discrimination based on ones health.

Health Insurance Portability and Accountability Act (HIPAA)

Enacted in 1996 and was designed to lessen denial of preexisting conditions and prevent discrimination based on ones health.

True

True or False:
Privacy provisions cause added compliance problems for the Health Insurance Portability and Accountability Act (HIPAA).

True

True or False:
Employees rank pensions as an important aspect of their employment benefits.

True

True or False:
64% of workers have access to pension coverage, only 49% participate in Employment pension and savings plans.

64%

What percentage of employees/workers have access to Employment pension and savings plans?

49%

What percentage of employees/workers take advantage or participate in the Employment pension and savings plans?

True

True or False:
There are two generic pension plans are defined benefit plans, and defined contribution plans.

defined benefit plans and defined contribution plans.

What are the two types of generic pensions plans that are typically offered to employees?

The two generic pension plans offered to employees

Defined benefit plans and defined contribution plans describe what?

401K

The following aspects of a type of pension/retirement plan describes what type:
Dollar contribution is known and controllable

401K Plan

Many organizations have shifted from pension plans to a plan where the dollar contribution is known and controllable. What is this plan known as?

Defined benefit plans

Regarding employee pension plans, the biggest complaint from chief financial officers is in reference to which pension plan?

Defined benefit plan

Which type of pension plan does the employer provides a pension in either fixed dollar, or a percentage of earnings, seniority.

Defined Benefit

__________ plans are financed by following a formula, making investments now that yield the future pension benefit.

Defined Benefit Plans

Financed by following a formula, making investments now that yield the future pension benefit

Defined Benefit Plan

Which type of pension plan does the benefit amount takes average earnings of last 3 – 5 years, and pays about half, or adjusts 30 – 80% for seniority?

Defined Contribution

With a _______ plan, the employer sets up an investment account for each participating employee.

Defined Contribution Plan

Which type of pension plan does the employer sets up an investment account for each participating employee?

Defined Contribution Plan

With a _________ type of pension plan, when the employee retires, the pension is based on their contributions, employer contributions, and any gains (or losses) in stock investments.

Defined Contribution Plan

Which type of pension plan is set up by the employer and when When the employee retires, the pension is based on their contributions, employer contributions, and any gains (or losses) in stock investments.

401K, Employee Stock Ownership Plan (ESOP), Profit Sharing Plan

There are three (3) popular forms of defined contribution plans. What are those three forms/types?

Defined Contribution Plan

A 401K, Employee Stock Ownership Plan (ESOP), and Profit Sharing Plan are forms of which group of pension plans?

401K

Savings plan where employees can defer pretax income.

Employers match at 50 cents on the dollar.

Savings plan where employees can defer pretax income.

Employers match at 50 cents on the dollar.

What are the benefits/functionings of having a 401K?

Employee Stock Ownership Plan (ESOP)

Employer makes a tax deductible contribution of stock shares or cash to a trust.

The trust allocates stock to employees based on earnings

Employer makes a tax deductible contribution of stock shares or cash to a trust.

The trust allocates stock to employees based on earnings

What are the benefits/functioning’s of having an Employee Stock Ownership Plan (ESOP)?

Profit Sharing Plan

This can be considered a DC pension plan if the distribution of profits are delayed until retirement.

hybrid

A cash balance plan is a _____. A cash account grows from annual employee and employer contributions

annual employee and employer contributions

A cash balance plans growth comes from:

True

True or False:
Both defined benefit and Defined Contribution plans are subject to stringent tax laws

deferred compensation tax exemption

To qualify for __________, an employer cannot freely choose who will participate in the plan.

True

True or False:
To qualify for deferred compensation tax exemption, an employer cannot freely choose who will participate in the plan

Independent Retirement Accounts (IRAs)

_________ are a tax favored retirement savings plan that individuals can establish themselves.

True

True or False:
IRAs do not require an employer to set them up.

do not

Choose: do/ do not
IRAs (do/do not) require an employer to set them up.

Employee Retirement Income Security Act (ERISA)

In 1970’s, mismanaged accounts and long vesting periods were uncovered leading to the enactment of _____________ in 1974.

Employee Retirement Income Security Act (ERISA)

___________ was enacted in 1974 due to uncovering mismanaged accounts and long vesting periods.

1974

Employee Retirement Income Security Act (ERISA) was enacted in what year?

Employee Retirement Income Security Act (ERISA)

Does not require a pension plan, but if there is one, it must follow the rules.

Employee Retirement Income Security Act (ERISA)

Designed to achieve two goals:

to protect 100 million active participants, and to stimulate the growth of such plans.

to protect 100 million active participants, and to stimulate the growth of such plans.

What are the two goals that the Employee Retirement Income Security Act (ERISA) was designed to achieve?