Work and Family Policies for a Changing Work Force (1991) / Chapter Skim
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5 Standard Employee Benefits
5 Standard Employee Benefits
Pages 87-113
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From page 87... ...
Three types of surveys provide information about employee benefits: (1) surveys of employers, which have samples that are neither national nor random (e.g., U.S.
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From page 88... ...
Thus men were offered pensions and paid vacations; women were offered poetry and cooking classes (Schatz, 1983~. Benefits were generally offered only by large firms seeking workers with special skills.
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From page 89... ...
Also, payment for time not worked has de TABLE 5-1 Aggregate Value of Employee Nonwage Benefits, 1929-1988 Year Current Dollars Percentage of Total (billions) Compensation 1929 1939 1949 1959 1969 1979 1988 $ 0.7 1.3 2.2 4.6 7.3 21.4 60.1 239.5 464.3 5.1 7.6 10.4 16.1 16.2 NOTE: Consists mainly of employer contributions tO SOcial insurance and to private pension, health, and welfare funds.
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From page 90... ...
BENEFITS ESTABLISHED BY LAW Two types of employment-based benefits are established by law: taxsupported benefits managed by public agencies and mandated benefits privately purchased by the employer. Employer contributions for both of these are now 9 percent of total compensation, up from approximately 3.6 percent in 1960 (Andrews, 1988; Bureau of Labor Statistics, 1990a)
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From page 91... ...
In 1989, about 30 million people over age 65 and 3 million disabled people were enrolled in Medicare Part A; expenditures were $60.8 billion (Federal Hospital Insurance Trust Fund, 1990~. Individuals eligible for Medicare Part A may elect to enroll in Part B or Supplementary Medical Insurance (SMI)
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From page 92... ...
Employers in California, New Jersey, New York, and Puerto Rico can purchase coverage from either the state plan or any private plan that meets state requirements, including self-insurance. California and Rhode Island do not require employers to contribute.
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From page 93... ...
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From page 94... ...
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From page 95... ...
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From page 96... ...
Others less frequently provided include: subsidized education, discounts on goods and services, job-site cafeterias, parking, and special clothing. TABLE 5-3 Employer Costs for Employee Compensation in Private Industry, 1990 Compensation per Hour Worked % of Total Compensation Wages and salaries Benefits Legally requireda Paid leaveb InsuranceC Pensions and savings Supplemental paye Other benefits f g $10.84 4.13 1.35 1.03 0.92 0.45 0.37 72.4 g 27.6 9.0 6.9 6.1 3.0 2.5 Total $14.96 100.0 asocial security, railroad retirement and supplemental retirement, railroad unemployment insurance, federal and state unemployment insurance, workers' compensation, and other benefits required by law, such as state temporary disability insurance.
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From page 97... ...
TABLE 5-4 Employee Participation in Employee Benefit Programs in Private Industry and Government, 1987 and 1989 (percentage) Benefit Private Industry, State and Local 1989 Governments, 1987a Paid time off Holidays 97 81 Vacations 97 72 Personal leave 22 38 Lunch period 10 17 Rest time 71 58 Funeral leave 84 56 Jury duty leave 90 98 Military leave 53 80 Sick leave 68 97 Insurance Sickness and accident 43 14 Long-term disability 45 31 Health 92 94 Life 94 85 Retirement Defined benefit pension Defined contributions 48 63 93 9 NOTE: Participants are full-time workers in medium- and large-sized firms covered by a paid time-off, insurance, retirement, or capital accumulation plan.
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From page 98... ...
Since the passage of ERISA in 1974 (following a series of major pension plan failures) , the proportion of defined benefit plans has declined from 34.0 percent to 26.7 percent (Employee Benefit Research Institute, 1987)
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From page 99... ...
Health insurance is subject to federal and state regulation. The Consolidated Omnibus Budget Reconciliation Act of 1985 requires employers with 20 or more employees providing health insurance to offer former employees the option to purchase continued health insurance coverage for up to 18 months after active employment (Employee Benefit Research Institute, 1987~.
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From page 100... ...
Employer contributions for life insurance have increased from $1 billion in 1960 to $10 billion in 1987, but they decreased as a percentage of total contributions for all voluntary pensions and insurance (Employee Benefit Research Institute, 1987; Andrews, 1988~. Paid Time Off The benefits discussed thus far, whether required by law or provided voluntarily, address employees' financial needs.
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From page 101... ...
We now turn to the different question of the extent to which workers are covered. In addition to employer surveys, the primary sources of data are surveys of employees, such as the Bureau of Labor Statistics survey of employee benefits.
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From page 102... ...
The data for medium- and large-sized firms (the Department of Labor definition varies, referring to firms employing more than 250 TABLE 5-5 Employee Participation in Employee Benefit Programs by Size of Firm, 1985 (percentage) Employees in Medium and Employees in Employee Benefit Program Large Firms Small Firms Retirement 91.0 43.3 Health insurance 96 0a 74 7 Life insurance 96.0 58.6 Vacations 99.0 80.6 Paid lunch break 10.0 18.6 Sick leave 67.0 45.8 Long-term disability insurance 48.0 25.6 Child care 1.0 4.3 Educational assistance 76.0 23.0 Employee discounts 57.0 34.8 NOTES: Participants are full-time workers covered by a paid time-off, insurance, retirement, or capital accumulation plan.
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From page 103... ...
There are important differences even among large firms: among the Fortune 500 in 1985, benefits were found to range between 10.7 percent and 34.4 percent of total labor costs (Employee Benefit Research Institute, 1987~. Freeman and Medoff (1984)
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From page 105... ...
Health Insurance Coverage Employer-paid health insurance is a very important benefit, not only for employees, but also for their families. The Current Population Survey estimates that 61 percent (40 million)
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From page 106... ...
In medium- and large-sized firms, 92 percent of employees have access to some coverage, as do 94 percent of employees of state and local governments (see Table 5-4~. There are no substantial differences in access to coverage between blue-collar and whitecollar workers or, in the public sector, between teachers, police officers, and firefighters (Bureau of Labor Statistics, 1989a)
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From page 107... ...
Participants are full-time workers in medium- and large-sized firms covered by a paid time off, insurance, retirement, or capital accumulation plan. Employees subject to a minimum table continues
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From page 108... ...
bThe total is less than the sum of the individual items because some employees participated in both retirement and capital accumulation plans and in more than one type of plan. CPlans were counted as retirement plans if employer contributions had to remain in the participant's account until retirement age, death, disability, separation from service, age 59~/:, or hardship.
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From page 109... ...
Additional information on the employment status of the uninsured and their dependents comes from the 1987 Current Population Survey (Swartz, 1989; Chollet, 19881. Of the 16.6 million employed uninsured (including 1.8 million people who are self-employed)
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From page 110... ...
bThis category includes all nonrespondents to the question of employer size. SOURCE: Preliminary tabulations from the March 1988 Current Population Survey, 17 April 1989.
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From page 111... ...
According to one survey of small establishments, 52 percent did not provide paid sick leave, although they were somewhat more likely to provide paid vacations and may be more flexible about informal leaves (U.S. Small Business Administration, 19871.
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From page 112... ...
Many employers now provide paid time off, such as vacations and sick leave, and help maintain employees' income through short-term disability programs. The precise terms of these provisions affect how much time employees are allowed for pregnancy, childbirth, and general family care.
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From page 113... ...
In a period of rising real incomes, employees prefer to increase benefits; when real incomes stagnate or decline, employee demand for benefits slackens. Added to the rising costs of some programs, this does not bode well for further increases in voluntary benefits.
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