Chapter 9: Compensation and Benefits

Comprehensive practice questions covering legal aspects of compensation, mandatory and voluntary benefits, federal labor laws (ERISA, COBRA, HIPPA, USERRA), and payroll administration for restaurant management.

What is the definition of compensation management?

Compensation management involves all the activities related to planning, implementing, and monitoring wages, salaries and benefits for employees.

According to the Fair Labor Standards Act (FLSA), what specific wage categories must managers consider?

The act covers minimum wage, tipped employees’ minimum wage, youth minimum wage, subminimum wage, and tip credits.

Under the Consumer Credit Protection Act, when is it illegal to terminate or discipline an employee regarding their wages?

An employee cannot be terminated or disciplined if the government mandates their wages be paid to a third party.

Distinguish between a levy and a garnishment as defined in the text.

A levy is a payment taken by a government agency (such as the IRS), while a garnishment is a payment ordered by a court.

What is the primary requirement of the Equal Pay Act?

It is illegal to pay different wages to men and women if they perform the same work in the same workplace, regardless of differences in job titles or descriptions.

In employee benefit plans, what is the difference between a participant and a beneficiary?

A participant is the individual enrolled in the plan, while a beneficiary is the person designated to receive benefits from the plan.

What are the common mandatory benefits mentioned for employee benefit plans?

Social Security, Family and medical leave (FMLA), healthcare coverage after termination (COBRA), military leave, unemployment insurance, and workers compensation.

List four examples of common voluntary benefits.

Uniforms and meals, healthcare plans (such as PPOs and HMOs), Employee Assistance Programs (EAPs), and retirement benefits.

What are the two types of retirement benefits identified in the notes?

Defined benefit (DB) and Defined contribution (DC).

What is the purpose of the Employee Retirement Income Security Act (ERISA) of $1974$?

It protects employee pensions and healthcare plans from incompetent, unethical, and unfair administration.

What two documents does ERISA require for plan administration?

A summary plan description (SPD) and an annual report.

What is the function of the Consolidated Omnibus Budget Reconciliation Act (COBRA)?

It extends healthcare coverage at group rates to individuals who have experienced a loss of coverage due to qualifying events.

According to the transcript, how does the Health Insurance Portability and Accountability Act (HIPPA) protect employees?

It limits the exclusion for preexisting conditions and identifies qualifying events for coverage such as the loss of healthcare, marriage, birth of a child, or adoption.

What are the four components of the Social Security federal program?

Retirement benefits, survivor benefits, disability benefits, and Medicare.

How is Medicare defined in the transcript?

A federally insured healthcare plan for people age $65$ or older.

What are the time-based criteria for receiving Unemployment Compensation?

Benefits are based on earnings over $52$ weeks and are paid for a maximum of $26$ weeks.

What is the main requirement for an individual to receive unemployment benefits?

Recipients must be unemployed through no fault of their own.

What does the Uniformed Services Employment and Reemployment Rights Act (USERRA) protect?

It requires employers to continue all benefits during military leave and allows employees to return to the same or equivalent job.

What are the primary responsibilities of a payroll administrator?

Delivering paychecks, ensuring correct taxes and insurance premiums are deducted, tracking length of service for credits/debits, and tracking paid vacation and sick time.

While payroll administration can be outsourced, what remains the manager's responsibility?

Managers are responsible for ensuring the information is correct related to pay rates and hours worked.

What are the three steps mentioned for setting pay rates to control labor costs?

Analyze total labor needs, research wage rates, and determine market position.

How can an operation control overtime costs?

By implementing planning, policies, and a system for scheduling according to volume.