Discuss Management Wage Concerns.
Companies that underestimate the importance of managing wages and salaries risk high turnover and low employee morale, productivity and retention. There also is a potential liability for claims arising from allegations of unfair employment practices and discriminatory pay practices. Managing wages and salaries requires knowledge of federal and state laws concerning employee classification as well as attention to compensation and payroll practices.
1. Study the difference between exempt and non-exempt classification. The Fair Labor Standards Act codifies overtime regulations for exempt and non-exempt workers. Employees classified as exempt are not entitled to overtime pay; they are exempt from FLSA rules on paying time and a half for working more than 40 hours in one week. Non-exempt employees are entitled to overtime pay whenever they work more than 40 hours in a work week.
2. Use the proper terms to distinguish between wages and salaries. It’s perfectly acceptable to use the terms interchangeably; however, in some work environments, the terms “wages” and “salaries” refer to two different forms of employee compensation. The term “wages” typically refers to hourly compensation for non-exempt employees. The term “salaries” refers to weekly, bi-weekly, monthly or annual compensation paid mainly to exempt employees.
3. Obtain job descriptions, titles and employee records to ensure proper classification of exempt and non-exempt workers. Review employee information for classification in three primary areas: administrative, professional and executive. There are also exemption tests for employees in computer-related jobs, creative and outside sales positions.
4. Review the compensation practices and policies. Audit starting wages and salaries criteria that the organization uses for increases and circumstances that warrant wage and salary adjustments. Compensation practices and policies also may include processing deductions, garnishments and employee contributions to group health benefits, savings accounts and stock purchase plans. Wages and salaries refer solely to the amounts one pays employees in exchange for work they perform.
5. Review the overall wage and salary structure for fair and competitive pay practices. Employees in similar job groups and occupations and employees performing comparable work are entitled to be paid wages and salaries congruent with their skills and qualifications. Fair pay means the organization achieves internal equity where compensation is concerned; competitive pay refers to external equity, meaning the compensation practices are based on profitability, industry practices and employment trends.
Discuss Income Maintenance Plans, Severance Pay, Health Care, and COBRA.
Severance Pay
Severance pay is money that an employer might want to provide for an employee who is leaving their employ. Normal circumstances that can warrant severance pay include layoffs, job elimination, and mutual agreement to part ways, for whatever reason.
Severance pay usually amounts to a week or two of pay for each year the employee supplied service to the company. For executives, the severance pay may even constitute up to a month’s pay for each year of service or whatever was negotiated in the senior employee’s contract.
When severance pay is dictated by an employment contract, it can amount to hundreds of thousands to millions of dollars, whatever was negotiated by the senior employee on hire. Senior employees parting ways with an employer is expensive.
In some instances, for regular employees and almost always for senior-level employees, a severance package might also include extended benefits and outplacementassistance. Other obligations that an employer pays the senior employee were negotiated prior to hire.
In all instances of employment separation, the employer is required by law to offer COBRA. Regulations were established by COBRA that give employees and their families, who lose their health benefits because of unemployment, the right to continue group health benefits provided by their group health plan. Employees may choose to continue coverage, however, employers may require the employee to pay the entire health insurance premium for health care coverage.
Health Care
Health insurance is the foundation of a comprehensive benefits package for employees. It is the preferred benefit of the majority of people who work. Health insurance marks an employer as an employer of choice when desirable candidates select job opportunities.
Health insurance is an insurance policy that will pay specified amounts of money to cover medical expenses or treatments. Employer-provided health insurance policies, also known as group health insurance policies, offer employees many different options for insurance coverage.
Employer-provided policies vary in their approaches to coverage
According to Healthinsurance.org, of the Americans who have health coverage, nearly 60% obtain their coverage through an employer-sponsored plan. In these group health plans, the employer pays the premium, or the lion’s share of the premium, that covers a wide range of health care expenses that vary by policy.
Generally, group health insurance plans cover the cost of medical office visits for illness and checkups, hospitalization, emergency room services, ambulance transportation, operations, physical therapy, and even prescription drugs, to provide several examples of potentially covered health care services. But, every plan is different and it behooves an employee to become familiar with the details of his or her employer’s plan before the benefit is needed.
In recent years, because of health care cost increases, employees are paying an increased percentage of the cost of their health insurance premiums, usually through a payroll deduction.
Some plans cover the employee who must pay the cost of insuring family members. Additionally, almost every plan have a co-payment (co-pay) responsibility in which the employee pays a nominal fee to cover a portion of the health care service provided, usually ranging from $10-40.00.
In addition to reducing the cost of health care coverage for employees, the second advantage of an employer-sponsored plan is that they offer guaranteed coverage; the insurance company must cover all applicants whose employment qualifies them for coverage.
Typically, employer-sponsored plans can include a range of plan options. From health maintenance organizations (HMOs) and preferred provider organizations (PPOs) to plans that provide additional coverage such as dental insurance, life insurance, short-term disability insurance, and long-term disability insurance, employer-sponsored health plans can be comprehensive to meet the insurance needs of employees.
COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA outlines how employees and family members may elect continuation coverage. It also requires employers and plans to provide notice.
Income maintenance plans and other insurance plans
Employers may offer various types of insurance plans to employees. The tax treatment of employer-paid premiums or contributions to these plans may differ depending on the nature of the plan, the type of benefits offered, and whether the plan is offered to individual employees (a non-group plan) or a group of employees (a group plan).
SENIORITY AND JOB SECURITY
Discuss Job Security and Seniority. Do they both continue to be valid considerations in Corporate America?
It has only recently been widely realized that security of job tenure is at least as important to the worker as wages, hours, or other conditions of employment. The depression of the early thirties and the severe unemployment that accompanied it have led most people to value job security more highly, in comparison with individual opportunity, than they had in the past.
Seniority, as defined by the United States Department of Labor, is:. . . the principle granting preference to employees in certain phases of employment in accordance with length of service. The principal aim of a seniority program is to afford the maximum security and reward to those who have rendered longest service.*
With a strict seniority system, decisions on lay-offs, re-hiring, and (sometimes) promotion are not left solely to the discretion of foremen or other representatives of management. Instead, a straight and clear-cut formula serves as a guide.
The first seniority provisions appeared on the railroads about fifty years ago. Numerous sales and consolidation of lines gave frequent opportunity for discrimination in the discharge or reassignment of employees. Among the first demands of the railroad unions were those for the application of strict seniority rights in case of lay-off, re-hire, promotion, transfer, and assignment to various runs.
The seasonal nature of many industries — and the resulting frequency of lay-off and re-hiring — caused a special desire of the regular employees for job protection. With the rise of mass-production industries and the development of industrial unionism, the desire for seniority protection became even greater. There was the case of older workers, who, in semi-skilled jobs in mass-production industries were especially likely to be displaced by younger, more vigorous and rapid workers. In addition, it was difficult for management in huge factories, employing thousands of workers in skilled, semi-skilled, and unskilled classifications, to determine who merited promotions. The desire, too, of the new industrial unions to demonstrate their strength in job protection undoubtedly was a large factor in their insistence on seniority systems.
Today seniority has been extensively adopted as an operating guide by labor and management. The principle of seniority helps, no doubt, to clear up many problems resulting from discrimination and favoritism (or the suspicion that they are present, which has an equally bad effect on morale, and consecjuently on the efficiency of the workers). It is, however, a rather complicated standard, with many administrative problems that must be carefully considered if it is to function smoothly.
There is no one standard which can be used to cover all seniority provisions. The variations in types of provisions are tremendous, and each industry, each company, each plant or shop, has to work out its own system — one that is adapted to the particular situation.
Seniority plans differ in many respects, such as the scope of the seniority list, the calculation of length of service, the kinds of decisions that are determined by seniority, the extent to which facts other than length of service may be considered, and the conditions under which seniority is earned and lost. Generally speaking, most seniority provisions follow a pattern within a particular industry, with variations depending on the plant. Some of the different types of seniority will be considered below. Quotations from labor agreements are given to illustrate many of these types.
Differences in the Scope of the Seniority List
Plant-wide Seniority. Plant seniority is probably the simplest form of seniority to establish, and under some conditions is the most difficult to operate. There is but one seniority list for the entire plant. The position of each employee on the list depends on his length of service, regardless of the jobs he has held in the plant. The following is an example of such a provision in a typical agreement in the chemical industry:
The Company and the Union recognize and accept the principle of seniority and agree to apply it according to the following provisions: a. Plant seniority of an employee is measured by the years, months and days from the start of his continuous service.
This type of seniority provision works most satisfactorily when there is not too sharp a difference in the kind of skill required for the various jobs. If the work were diversified, too much time might be spent in testing ability and re-training employees for new, un- familiar jobs whenever there is an expansion or contraction of the work force. Plant-wide seniority usually permits one employee to ”bump” another with less seniority, if he has the ability to perform the job. “Bumping” means that an employee displaced from one job can retain his employment by replacing a worker with less seniority on any job that he can perform. This process of displacement may be carried all the way down the line through the whole plant. Several employees may change jobs as a result of one lay-off. This can be a very disruptive practice within a plant if the employees are not easily interchangeable because of job similarity. This type of seniority provision gives the high-service employee maximum job security by giving him the greatest opportunity of replacing another employee. For the same reason, it places those recently hired in the most vulnerable position.
Departmental Seniority. Under departmental seniority there is a separate seniority list for each department. An employee on a discontinued job can replace someone in his own department, but not in other departments. For this type of seniority, length of service may be calculated by any one of several methods. Seniority may be computed for each department in which the employee had worked. He retains his seniority in each department. If he is forced out of the department in which he is working, he can exercise his seniority in any of the departments in which he has previously worked, displacing any employee with less seniority there.
Another type of provision permits seniority only for the department in which the employee is currently working and computes it from the time he started to work in the department. Such a provision does not recognize the employee’s right to seniority in departments in which he has previously worked.
In another type of provision seniority is good only for the department in which the employee has worked longest. The provision given below is from a typical agreement in the machine-tool industry:
Departmental seniority will be established . . . and all employees who have worked the majority of their time in any given department will be considered employees of only that department.
Combinations of Plant and Departmental Seniority. Since neither plant nor departmental seniority has proved fully satisfactory there has been an attempt to combine the two. The combinations have generally produced better results. The following provision in a labor agreement illustrates a simple type of combination :
When conditions warrant an increase or decrease in the number of employees in the plant, the principle of plant-wide seniority shall apply. When conditions warrant an increase or decrease in the number of employees in a particular group or department, then the principle of department seniority shall apply.
Some contracts provide for lay-offs to be based on plant seniority, and for promotions to be based on departmental seniority. there has been an attempt to combine the two. The combinations have generally produced better results. The following provision in a labor agreement illustrates a simple type of combination :
When conditions warrant an increase or decrease in the number of employees in the plant, the principle of plant-wide seniority shall apply. When conditions warrant an increase or decrease in the number of employees in a particular group or department, then the principle of department seniority shall apply.
Some contracts provide for lay-offs to be based on plant seniority, and for promotions to be based on departmental seniority.
A provision that is often favored by both unions and management is one by which seniority is calculated on the basis of the employee’s total service with the company, but can be exercised only within his present department.
In case of a lay-off, the employee cannot displace any other employee with shorter service in any other department, iTor can he apply for a promotion in any other department. In the event of a re-hire after a lay-off, he can be re-hired only in the department in which he was last working. He is laid off, however, after any employees who have worked in the department a longer time than he, but whose total plant service is less than his.
Management prefers a combination system such as this, because it makes employees more willing to transfer than they would be if they did not carry their accumulated seniority with them. Likewise, it is more feasible than a straight plant-wide seniority system where “bumping” would prevail aid where extensive re-training of displaced employees would be necessary. Although it is true that no seniority gives an employee a claim to a job unless he has the ability to perform it, still some time may be lost in testing the presence of that ability; and even if the ability is unquestioned, it takes some time for an employee shifting to another job to attain normal efficiency. Many unions prefer this plan also because the employees can better afford to accept promotions, and because fewer employees are adversely affected by the elimination of one job.
Another combination is found in some labor agreements ; one that provides for departmental seniority in skilled and semi-skilled jobs, and plant-wide seniority for unskilled jobs. This means that a skilled or semi-skilled worker may, in the event of a lay-off’, displace an employee with less seniority in his own department. In the event, however, that there is no such opportunity, he may join the unskilled labor pool of the plant and receive whatever work there is available according to this total length of service in the plant. An instance of this type of provision occurs in the following agreement in the automotive industry:
Employees having one year’s seniority or more who have exhausted their seniority . . . (in their department and division) . . . shall be placed in
the plant in line with seniority by the Employment Department on any job they have worked or on any job for which they are qualified.
Craft or Occupational Seniority. Under this type of seniority there is a separate list for each craft or occupation regardless of the department in which it is located. It is well suited to plants where the same skill is used in more than one department. It has in general the advantages of departmental seniority and avoids the disadvantages of plant-wide seniority. The same variations are possible here as under departmental seniority.
Application of Seniority
The question of the application of seniority is very important and is often not adequately specified in collective agreements. Does seniority apply only in lay-off and re-hire? Is it to be considered also in promotions and transfers?
Where seniority provisions exist they always apply to lay-off and re-hiring. Sometimes they apply also to promotion and transfer.
Management generally is more opposed to seniority for promotions than to seniority for lay-off and re-hiring. Seniority may prevent the promotion of the best qualified employee, and may thus reduce the incentive for good work. Moreover, the best employees may quit and seek employment where their ability will receive quicker recognition. Management therefore usually seeks to limit seniority to the problem of job security. The union, on the other hand, may fear that the management might discriminate against union members in making promotions.
“Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!”
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but splendidwritings.com proved they are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 14***| Rating: ⭐⭐⭐⭐⭐
"The company has some nice prices and good content. I ordered a term paper here and got a very good one. I'll keep ordering from this website."
