Employee Benefits Required By Law Essay -- essays research papers

Employee Benefits Required by Law The legally required employee benefits constitute nearly a quarter of the benefits package that employers provide. These benefits include employer contributions to Social Security, unemployment insurance, and workers’ compensation insurance. Altogether such benefits represent about twenty-one and half percent of payroll costs. Social Security Social Security is the federally administered insurance system. Under current federal laws, both employer and employee must pay into the system, and a certain percentage of the employee’s salary is paid up to a maximum limit. Social Security is mandatory for employees and employers. The most noteworthy exceptions are state and local government employees. The Social Security Act was passed in 1935. It provides an insurance plan designed to indemnify covered individuals against loss of earnings resulting from various causes. This loss of earnings may result from retirement, unemployment, disability, or the case of dependents, the death of the person supporting them. Social Security does not pay off except in the case where a loss of income through loss of employment actually is incurred. In order to be eligible for old age and survivors insurance (OASI) as well as disability and unemployment insurance under the Social Security Act, an individual must have been engaged in employment covered by the Act. Most employment in private enterprise, most types of self-employment, active military service after 1956 and employment in certain nonprofit organizations and governmental agencies are subject to coverage under the Act. Railroad workers and United States civil service employees who are covered by their own systems and some occupation al groups, under certain conditions, are exempted form the Act. The Social Security Program is supported by means of a tax levied against an employee’s earnings which must be matched buy the employer. Self-employed persons are required to pay a tax on their earnings at a rate, which is higher than that paid by employees but less than the combined rates paid by employees and their employers. In order to receive old age insurance benefits, a person must have reached retirement age and be fully insured. ... ...evel is inclined to encourage disabled employees to return to work. Another potential problem is that agencies must deal only with the one authorized "insurer." In most private insurance markets, the amount of prevention services is used as a device to attract and retain customers. It is not clear whether the Office of Workers 'Compensation Programs has any incentive to offer these key services. Occupational health and safety is as important a regulatory issue today as it was in the early 20th century, when it was at the vanguard of government intervention in the labor market. We should clearly be using all available devices for improving the operation of the labor market. Because employees will be compensated for their occupational injuries, it is necessary to take full advantage of the financing of that compensation system in order to create incentives for prevention. The financing arrangements now in use are quite strong, but reinforcing prevention incentives has nev er been viewed as their primary purpose. Recognition of this preventive incentive role and attention to its improvement will serve to improve the occupational health and safety of American workers.