ECE _DSST _ Human Resource MGMT

Employees are given a certain number of credits from

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rest of the benefits. Employees are given a certain number of credits from which to ‘buy’ the other benefits they want. The main advantages of the cafeteria plan are that the benefits offered can be adapted to the changing workforce, employers gain a competitive advantage over their rivals and employees develop a better understanding of the benefits available to them. The main disadvantages are that the plan is expensive to manage, employees may choose benefits that are more costly to employers and a bad selection by the employee leads to unnecessary financial cost. The costs of setting up and operating such a plan will certainly be more expensive than merely offering a fixed set of benefits to the employee. Some employers outsource this type of program to an external professional benefits vendor. Employers must correctly communicate information about the benefits available to employees and if they should purposely mislead employees about their benefit entitlements, then the US Supreme Court decision of Varity Corp v. Howe (1996) has ruled that the employee would be entitled to compensation from the employer. This is the landmark decision with regards to the right to know and be correctly informed about the benefits an employee is entitled to. By law, the benefits that an employer must provide are social security, unemployment insurance and workers compensation insurance. Unemployment insurance is a requirement of the Social Security Act for employees covered by this legislation. If an employee qualifies, then he or she may receive up to 26 weeks of unemployment insurance benefits during the period of unemployment. Supplementary Unemployment Benefits (SUB) are paid by companies who have agreed to it as a result of collective bargaining agreements between management and the union. The SUB plan allows an employee who is laid off to receive weekly benefits from the company in addition to state unemployment compensation. SUB payments come out of a special fund created for this purpose by employer contributions. For employees who are covered by the Social Security Act, the employee must make a contribution in the form of a tax which must be matched by the employer in order to pay old-age insurance benefits, disability benefits and survivors' insurance benefits. The Social Security Program pays benefits to workers who are too seriously disabled to perform substantially gainful work. In order to be eligible for these benefits, the worker must have been contributing to the program for at least 6 months and was expected to continue doing so for at least 12 months.
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Workers compensation insurance is required by both federal and state law in order to defray the loss of income and medical costs that an employee will suffer as a consequence of a work-related accident or illness.
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