美国人力资源管理—福利管理-教学课件4.ppt

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1、REGULATING EMPLOYEE BENEFITS Chapter 4McGraw-Hill/IrwinCopyright 2011 The McGraw-Hill Companies,Inc.All rights reserved.LEARNING OBJECTIVESNecessity of government regulation of employee benefitsInfluence of NLRA(1935)Impact of Internal Revenue CodeFair Labor Standards Act(1938)Employee Retirement In

2、come Security Act(1974)Pension Protection Act(2006),COBRA,HIPAAImpact of federal equal employment opportunity lawsLeveling the Playing FieldLeveling the Playing FieldLegal protections granted to employees seek to make the power relationship between employer and employee one that is fair and equitabl

3、e.Bennett-Alexander and HartmanHistorical PerspectiveNational Labor Relations Act of 1935The Great Depression left workers desperate for employment and in need of laws to equalize the power in the employer/employee contract.NLRA applies to private sector companies except passenger,freight,rail&airli

4、nes.Also excludes agricultural workers,domestic service workers,independent contractors and fed,state,local workers.MANDATORY BARGAINING SUBJECTS NLRA of 1935MANDATORY BARGAINING SUBJECTS NLRA of 1935 Supplemental Disability Pay Health Insurance Paid Time-Off Pension&Retirement PlansCollective barga

5、ining refers to the process in which representatives of employees and representatives of company management negotiate the terms of employment.A recent court decision allowed the employer to unilaterally change health insurance carriers when the plan was substantially the same.PERMISSIVE BARGAINING S

6、UBJECTSPERMISSIVE BARGAINING SUBJECTSAdministration of the FundRetiree Health Care Benefits Workers Compensation Within State Comp.LawsBargaining Topics NOT ON THE TABLE!Standards for Employee Benefits Plans set forth in ERISAMinimum Participation StandardsMinimum Vesting StandardsBenefit Accrual St

7、andardsJoint retirement/survivor benefits requirementsAlso WARN Act(worker adjustment and retraining notification act requires 60 days notice for plant or factory closing)Internal Revenue Code&TaxationTaxes are the main source of revenue to fund federal,state&federal programsPayroll and benefit cost

8、s quality as necessary business expenses and are tax deductible(during the year they are incurred).Employees deduct eligible benefit costs from their gross wages on their individual tax returns.FICA Federal insurance contributions act taxes employers and employeesthe taxes finance the social securit

9、y system(OASDI)OASDI Social Security Old-Age,Survivor and Disability InsuranceFUTA Federal unemployment tax paid by employers to fund unemployment benefitsERISA and DiscriminationNondiscrimination rules prohibit giving preference to key/highly compensated employees see text for definitions.FLSA COVE

10、RAGEMinimum WageOvertime Pay for hourly workersChild LaborCovers Private Sector,Education,NPOs&Federal EmployeesBusinesses in Interstate Commerce Employers Earning$500,000+Exempt vs.Nonexempt(FLSA)The U.S.Dept of Labor revised the FairPay Rules in August 2004,currently workers earning less than$23,6

11、60 per year or$455 per week are guaranteed overtime protection.Employees are entitled to one and one-half times their normal pay for hours worked over 40 in a normal work week.PORTAL-TO-PORTAL ACTDefines Work Hours asTime Spent for the Employers Benefit Employer Controlled Amount of Time Employer Aw

12、are of Time Spent on Task Employer Requested Extra TimeTime Spent was Vital Regular to TaskCovered in Union Contract or Precedent has been setCOMPENSABLE NONWORK TIMES Portal to Portal Act of 1947Clean-Up TimePreparation TimeTravel Time Between Jobs Rest Periods(20 min.)Meal PeriodsERISA COVERSMedic

13、al InsuranceLife InsuranceDisability ProgramsRetirement Plans ERISA DOES NOT COVERGovernment PlansChurch PlansWorkers Compensation PlansTop Hat Plans(unfunded deferred compensation plans)Plans Maintained Outside the USA for Nonresident AliensERISA PURPOSESInsures Information on Benefits to Employees

14、Sets Standards of Conduct for Plan ManagersDetermines Adequate Funding StandardsSafeguards Benefits if Plan is TerminatedEnsures that Workers receive Earned BenefitsSafeguards Benefits for Terminated Workers ERISA TITLESTitle I:Specifies ProtectionsTitle II:Taxation(Tax Code)for Retirement PlansTitl

15、e III:Administration&EnforcementTitle IV:Plan Termination Notice/InsuranceERISA applies to pension plans and welfare plans(those which deferemployee income for extended and defined periods of time).Defining Pension Plans Across IndustriesAll types of plans require:an approved method of calculating t

16、he contributions to the plan and an approved method of distributing benefits from the plan.Defined Benefit Plan:guarantees the benefit under the plan(amt/mo.=%of participants preretirement pay)X(#yrs.);Defined contribution Plan:employers and employees make contributions to separate accounts and amou

17、nt received depends on ROR(rate of return)on investment(typically a%of annual salary;%may differ for employer and employee 2.5%:7.5%)Multiemployer Plans:employees that move from employer to employer as work is available(skilled trades,construction site workers)Seven Issues Addressed by Title ISeven

18、Issues Addressed by Title I1.Reporting and Disclosure2.Vesting&Participation Standards 3.Funding4.Fiduciary Responsibilities 5.Administration&Enforcement6.Continuation Coverage7.Group Health Plan Requirements Reporting and DisclosureThe employer must provide:understandable and comprehensive summarie

19、s,information about changes in the plan,and advance notification of planned termination of the plan;reports on plan status(credits/accrual),&Form 550.ERISA TITLE I,PART 2 PARTICIPATION&VESTINGWhat Is Vesting?Vesting=rights that cannot be forfeited or taken awayFull Vesting=the full right to invest i

20、n the plan which can be given in two ways:Cliff Vesting=you are vested after three years,if you leave before then you get nothing!Gradual Vesting=See Exhibit 3.3 for gradual vesting scheduleBreaks In Service=based on one year increments with a specific formula on pp.of the textbookVesting Rights=if

21、you are fully vested when you leave,all years served will be counted(a bridge in service)FIDUCIARY RESPONSIBILITIESFiduciaries Manage PlansERISA requires fiduciaries to exercise the“prudent person”burden of proof in the execution of their duties;To diversify the plan to minimize riskAct according to

22、 the proscribed document planTrustees have the exclusive authority to control and manage the planBuilding Trust Through TransparencyPlan Termination InsuranceDistress Termination:a company is in financial distress.Involuntary Termination:the Pension Benefit Guarantee Corporation may terminate a comp

23、any if the minimum funding requirements are not met or the plan cannot pay out its benefitsStandard Termination:A plan may terminate if it can meet allits obligations and goes through all the steps of notificationidentified in Exhibit 3.4 of the textbookTitle IV established the Pension Benefit Corpo

24、ration(PBGC)which is a taxExempt,self-financed corporation created to insure defined benefit pensionplans under PBCGs pension insurance programs,the administrator of the planand the companies that sponsor the plan have specific administrative andreporting responsibilities.Participation Eligibility&R

25、ecent UseDefined contribution plans are not eligible to participate in plan termination insurance because they do not guarantee a particular benefit at retirement.Some employer pension programs are excluded as well(see text).Termination insurance protects against the loss of vested benefits when pla

26、ns fail.Eligible employers must purchase the insurance.Insurance premiums are set by Congress for employers based on number of employees as well as whether employees are single or multiple plan participants.The poor economy led to an unexpected increase in plan use.Recent court decisions affirmed th

27、at bankruptcy met the legal test for terminating company plans.COBRAConsolidated Omnibus Budget Act Reconciliation Act of 1985CoversPrivate Sector EmployeesState&Local Government Employees with 20+Employees ExemptFederal Government EmployeesChurch Employees QUALIFYING EVENTSTo allow employee to cont

28、inue coverageDeath of Covered EmployeeTermination or Reduction in Hours Divorced or Legal SeparationDependent Child Loses EligibilityEmployee Eligible for MedicareCobra Premiums and CoverageCompanies may charge beneficiaries of continued coverage up to 102%of plan cost(to cover administration)The Am

29、erican Recovery and Reinvestment Act of 2009 provides a 65%reduction in benefit cost to the eligible individual(see text).The period of continuing coverage ranges from 18 to 36 months from the qualifying event.Incurring a disability prior to or during the first 60 days of coverage extends coverage f

30、or 29 months.Bankruptcy allows an eligible individual lifetime coverage.HIPPA:The Health Insurance Portability and Accountability Act of 19961.Guarantees Access to Health Insurance Coverage2.Sets Pre-Existing Conditions Limits 3.Allows Coverage from Former Plan Towards Pre-Existing Conditions4.Limit

31、s Use of Health Care Information HIPPA applies to all employers offering group health plans.HIPPA Availability and PortabilityPre-existing conditions are reduced under HIPPA based on credits for prior coverage from a prior employers health plan.Credible coverage includes:A group health plan and/or h

32、ealth insurance coverageMedicare and/or MedicaidMilitary-sponsored health carePublic health plan or plan offered under the Peace Corps ActA medical program sponsored by the BIA or a tribal organizationPENSION PROTECTION ACTDesigned to protect employees company-sponsored retirement plansStrengthens f

33、inancial condition of PBGC by requiring substantially higher premiums from underfunded companiesLaw also encourages higher levels of participation through tax advantagesLaw makes employee participation in employer-sponsored defined contribution plans easier through automatic enrollment with multiple

34、 investment options to minimize employee risk.EQUAL EMPLOYMENT OPPORTUNITY LAWSEqual Pay Act(1963)Title VII of Civil Rights Act(1964)Age Discrimination in Employment Act (1967)Pregnancy Discrimination Act(1978)Americans with Disabilities Act(1991)Civil Rights Act(1991)Genetic Information Nondiscrimi

35、nation Act(2008)EQUAL PAY ACTIs an amendment to minimum wage provisions of the FLSA(Fair Labor Standards Act)Enacted to address pay inequity issues in the workplace(“equal work for equal pay”)Compensable Factors Used in Determining Pay RatesSkillEffort ResponsibilityWorking ConditionsTitle VII of th

36、e Civil Rights Act of 1964Prohibits illegal discrimination against protected class individuals in employmentCivil Rights Act includes all aspects of the employer employee relationship .including benefits!Protects employees who work in the private sector,government and educational institutions with m

37、ore than 15 employees.ADEA COVERAGEAge Discrimination in Employment Act of 1967Applies to private sector employers with 20 or more employees;state and local government,most employment agencies,and union shops with over 25 members.Specifically addresses benefit administration and early retirement pla

38、n offerings must be on a voluntary basis.The Older Workers Benefit Protection Act places additional restrictions on the employer to prohibit differential treatment based on age.Pregnancy Discrimination ActProhibits discrimination against women in the workplace based on their pregnancy.Pregnancy may

39、not be treated less favorably than other medical conditions.American With Disabilities Act of 1990Employers must provide the same health insurance regardless of disability status.Employers may not fire or refuse to hire individuals with documented disabilities where a reasonable accommodation is pos

40、sible.Employers must provide include persons with disabilities in their pool even if it will result in an overall rate adjustment for the company.The Americans With Disabilities Act of 2008 retains the original definition of“disability”but expands the definition of major life activities.The ADA appl

41、ies to the same organizations as Title VII.CIVIL RIGHTS ACT OF 1991 RELEVANCEEmployers must show that the challenged employment action is a“business necessity”.Protects same groups as Title VII.Its relevance to employee benefit practices is illustrated in an employees ability to challenge the use of

42、 seniority systems using a continuing date of incident either the original date of incident or each time an incident occurred.Genetic Information Nondiscrimination Act of 2008Title I of the Act prohibits discrimination in employer-sponsored group health premiums based on genetic information or the u

43、sing the information as a basis for determining eligibility or setting health insurance premiums.Title II of GINA prohibits the use of genetic information in employment decisions and also the disclosure of said information.Title II applies to all three employment sectors.Bars the use of genetic info

44、rmation to discriminate in health insurance and employment.The act was created because of the decoding of the human genome and advances in genomic medicine.Regulating Employee BenefitsThe focus of this chapter is to introduce you to the complex set of federal regulations that shape discretionary benefits practices.A sound working knowledge of these laws is essential to effective management of employee benefits practices in companies.Joseph Martocchio