MGT 303 benefits - Chapter 13-Employee Benefits Monday 3:24...

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Chapter 13 -Employee Benefits Monday, April 18, 2011 3:24 PM Benefits -not a core competency Introduction a. Average cose of benefits is about 37% for every payroll dollar i. About 27% of total compensation package a. Benefits are unique because i. More regulation of benefits than direct pay ii. Almost obligatory for employers to provide 1. You need to compete with other companies because of market pressures iii. Complex for employees to understand Reasons for benefits growth a. Laws mandating benefits passed during and after the Great Depression b. Wage and price controls instituted during WWII and labor shortage c. Tax treatment of benefits programs i. A $ spent on benefits has the potential to generate more value for the employee than the same $ spent on wages a. Large group vs individual insurance i. When you buy in bulk, you get it for a lesser amount a. Organized labor b. ____- Benefit programs a. Social insurance -mandated by law that you have to have for every employee i. Social security -provides old-age insurance, unemployment insurance, survivors' insurance, disability insurance, hospital insurance and supplementary medical insurance 1. Full benefits begin at age 65 or a reduced benefit at 62 ii.
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