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Family and Medical Leave. The Family and Medical Leave Act of 1993 ( FMLA ) is a federal law that requires an employer to provide 12 weeks of unpaid time off to employees without the risk of losing their job in the event of personal illness, the birth of a child, adoption or foster care of a child, or the need to care for a sick family member. This benefit is only required for companies with more than 50 employees, although many smaller companies provide a similar benefit because it is so popular. Jury Duty. All companies must provide time off for civic duties such as jury duty, and voting. State Disability Benefits. If you work in California, Hawaii, New Jersey, New York, Rhode Island or Puerto Rico, State Disability Insurance (SDI) is a legally required employee benefit. SDI provides compensation for up to one year in the event you fall ill or are injured away from work and cannot do your normal job . This is different from workers compensation insurance which provides compensation only for work-related illness or injury . In those states, the employer collects SDI insurance payments from the employee’s paycheck and pays it into the state’s SDI Fund. Reflect on Learning: Can you list the employee benefits required by law? Social Security, Medicare, Workers Compensation, Unemployment Insurance, FMLA, time off for jury duty and to vote, and in some states, State Disability Insurance (SDI) which provides compensation for sickness or injury occurring outside of employment. What is the difference between worker’s compensation and unemployment insurance? III. Discretionary Employee Benefits Employers want to lure good employees to work for their company and to stay for a long time, so most provide employee benefits above and beyond the minimum benefits required by law . Below are employee benefits that are discretionary , yet commonly found in a compensation package: Vision and dental insurance. Vision and dental insurance benefits are not required by law to be included in an employee benefits package, but like healthcare insurance, these are frequently offered because it’s pretty hard to attract and retain employees without them. Most dental and vision benefit plans cover the cost of basic exams and a percentage of treatment costs , if needed. Retirement plans. Retirement plans are immensely popular with employees. For this reason, they are almost always included in a compensation package. For young job seekers facing over 50 years in the workforce, retirement may seem a long, long way off. Full participation in a retirement plan can substantially shorten the time to retirement or make retirement years much more comfortable. You’ll learn more about retirement plans in a later chapter, but understand that there are two main types of retirement plans: defined benefit plans and defined contribution plans . Here are some basic facts about each: Defined benefit plan. This type of plan promises a specified monthly benefit at retirement. In other words, the benefit is defined right up front. The plan states the promised benefit in an exact dollar amount, such as “$1500 per month at retirement.” Pension plans are defined benefit plans. Defined benefit plans are 100% funded by employer contributions. At one time, pension plans were a staple of American employee benefits packages, however they are giving way to the defined contribution plan, below. Some large companies and public service jobs, like firefighters, police officers, and teachers still have pensions. PRODUCT PREVIEW
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Chapter 4 | Pay. It’s More Than a Salary
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