Abstract I examine the unemployment insurance (UI) and workers' compensation (WC) insurance programmes, concentrating on labour supply, insurance and income redistribution. UI and WC increase the time employees spend out of work. Elasticities of lost work time that incorporate both the incidence and duration of claims are centred at 1.0 for UI and between 0.5 and 1.0 for WC. These elasticities are larger than elasticities typically found in studies of wage effects on hours worked by men, probably because UI and WC lead to short-run variation in wages with mostly a substitution effect and the programmes alter the participation margin. Some good evidence suggests that UI smooths the consumption of the unemployed and more clearly indicates that UI progressively redistributes resources. There is substantial evidence that injured workers suffer material hardships even with WC programmes, but research has not provided an overall picture of the insurance and redistributive aspects of WC. Show
Journal Information Fiscal Studies is the journal of the Institute for Fiscal Studies. The journal was started by researchers at the Institute and aims to bridge the gap between academic research and policy. Since its inception in 1979, Fiscal Studies has earned a reputation around the world for publishing high-quality, original research papers in a style understandable to a wide audience. Written by leading academics, policymakers and practitioners, articles are presented in a clear and accessible format designed to appeal to a broad international readership. Publisher Information Wiley is a global provider of content and content-enabled workflow solutions in areas of scientific, technical, medical, and scholarly research; professional development; and education. Our core businesses produce scientific, technical, medical, and scholarly journals, reference works, books, database services, and advertising; professional books, subscription products, certification and training services and online applications; and education content and services including integrated online teaching and learning resources for undergraduate and graduate students and lifelong learners. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of information and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Wiley has published the works of more than 450 Nobel laureates in all categories: Literature, Economics, Physiology or Medicine, Physics, Chemistry, and Peace. Wiley has partnerships with many of the world’s leading societies and publishes over 1,500 peer-reviewed journals and 1,500+ new books annually in print and online, as well as databases, major reference works and laboratory protocols in STMS subjects. With a growing open access offering, Wiley is committed to the widest possible dissemination of and access to the content we publish and supports all sustainable models of access. Our online platform, Wiley Online Library (wileyonlinelibrary.com) is one of the world’s most extensive multidisciplinary collections of online resources, covering life, health, social and physical sciences, and humanities. Rights & Usage This item is part of a JSTOR Collection. Wondering what type of employee benefits are typically offered by a company? Building the right lineup can help employers attract top talent and ensure current employees feel valued. However, labor costs could be high if you go overboard. Further, investing in the wrong benefits may leave prospects and employees less than thrilled. Here’s a closer look at mandatory and voluntary employee benefits, their costs, and how to decide which voluntary options are best. Key Takeaways
Why Offer Employee Benefits?Employee benefits are extra perks that employees receive in addition to normal wages. But why consider offering them? Is pay alone no longer enough? While some benefits are legally required, voluntary benefits can help your business in several important ways. “Offering benefits is a great way to attract and retain top talent and can also help improve employee morale and productivity,” Linda Shaffer, chief people and operations officer (CPOO) at HR technology company Checkr, told The Balance in an email interview. Imagine you’re an employee deciding between two employers offering similar pay. If one provides paid time off and child care assistance while the other doesn’t provide either, the benefits may win you over. “Businesses of all types can benefit from offering at least some basic employee benefits, such as health insurance, retirement savings plans, and paid time off,” Shaffer said. “In general, the larger your company, the more likely it is that you’ll need to offer employee benefits to attract and retain top talent.” Common Employee Benefits
Private employers’ benefits costs are $11.42 per hour per employee, and account for almost one-third of total employee compensation, according to the March 2022 Employer’s Cost for Compensation Report from the U.S. Bureau of Labor Statistics. Your benefit costs will vary on many factors, including benefit type, location, industry, and employees covered. Here are the most common optional
benefit types private U.S. employers offer, and average costs for employers per hour, according to 2022 BLS data and the percentage of employees with access:
Health Care and Health Insurance BenefitsHealth insurance is one of the most common and expensive benefits. If you have more than 50 employees, the Affordable Care Act mandates you offer certain coverages or face penalties. Employers typically purchase a group plan and share the premium costs with each employee. As a result, employees and their families can access more affordable health care. For private industry employers with fewer than 100 workers, here are 2021 BLS statistics:
Paid Leave BenefitsTypically, employees accrue paid time off as they work their normal shifts. Each pay period, time accrued is credited to their bank of paid time-off hours. Other employees accrue a set number of days per year. Employees apply the accrued hours to take time off for vacation, sick days, or other reasons. Among private industry workers, here’s how access breaks down:
Retirement AccountsEmployer-sponsored retirement accounts help employees save money for their golden years. Some employers match employee retirement contributions up to a certain percentage to speed up savings growth. Defined contribution retirement plans accumulate tax-deferred savings in employer-established individual employee accounts such as a 401(k). Defined benefits retirement plans are also known as pension plans, and are less common. Here’s the access employees had at small businesses (fewer than 100 employees) in 2021:
Required Employee BenefitsWhile there are many voluntary benefits you can offer employees, the following are typically required by law and figure into your employees’ benefits as estimated by the BLS at $2.91 per hour for private employers:
Mandatory benefits may vary by state or city. For example, in Washington state, employers will soon be required to contribute toward a long-term care fund, which provides financial support to employees if they end up living with a short- or long-term disability. Research laws applying to employers in your state or city. NoteSupplemental pay includes bonuses, shift differentials, overtime, and pay classified as “premium,” such as working weekends and holidays. Some overtime pay is required by federal law in the Fair Labor Standards Act (FLSA) for hours worked beyond the usual 40-hour workweek. Other Insurance BenefitsEmployers may purchase group life and disability insurance and share costs with employees who opt in; life insurance is also one of least expensive employee benefits available, according to BLS data. Life insurance pays a death benefit to someone the employee chooses upon the employee’s death. Life insurance costs $0.04 per hour for private employers and provides a benefit if the employee dies. Short-term disability costs $0.08 while long-term disability costs $0.05 per hour. Other Important Employee BenefitsAll businesses will want to consider which benefits their employees value most. According to 2022 research from the Hartford insurance company, employees express interest in critical-illness insurance, wellness benefits, and employee assistance program benefits, among others. Other benefits that are commonly offered, according to a 2022 Society for Human Resource Management (SHRM) survey, are:
How To Set Up an Employee Benefits ProgramSteps to set up an employee benefits program include the following:
You can manage each of your benefit plans separately or work with professional employer organizations (PEO) or a benefits broker to manage your payroll and benefits administration. You’ll also need to consult with a tax professional to understand all tax implications (including tax credits) related to the benefits you’ll offer. Some benefits, such as qualifying employer-provided child care, offer tax credits for employers. The Bottom LineYour company’s benefits package will depend on factors such as your profitability, labor budget, and the needs of your employees. For those on a tighter budget, you’ll likely want to look into more affordable employee perk options. Benefits may also vary by industry—for example, the BLS found that 63% of administrative and waste service workers had access to paid vacations, while 93% of workers in professional and technical services could take paid vacations. To stay competitive, you may need to keep up. Frequently Asked Questions (FAQs)How much equity should I give my employees?The amount of equity you should reserve for employees typically depends on the valuation of your company, according to data from Carta (an employee management compensation platform). Companies valued at $1 million to $10 billion reserve an average of 13% to 20% of fully diluted equity for employees, with larger companies reserving higher percentages. What benefits do employees really want?Try surveying your employees. Andy Kalmon, CEO of benefits-focused startup Benny, pointed out that after the COVID-19 pandemic, many small businesses’ employees polled about desired benefits put child care assistance at the top of the list. “If these businesses were to offer free gym memberships instead, they would have fallen short in keeping their employees happy,” he said—and wasted money as well. What is an accurate description of unemployment insurance?Unemployment insurance (UI), also called unemployment benefits, is a type of state-provided insurance that pays money to individuals on a weekly basis when they lose their job and meet certain eligibility requirements. Each state administers its own unemployment insurance program, despite it being federal law.
What is an advantage of providing benefits instead of cash compensation quizlet?Which of the following is an advantage of providing benefits instead of cash compensation? Employers can assemble creative benefits packages that give them a competitive advantage.
Can you get workers comp and unemployment in California?Yes, in some situations, you can. Workers' comp benefits and unemployment benefits mostly pertain to entirely separate types of damages and expenses. You can receive benefits from both types of financial support as long as their benefits do not overlap, or you don't “double-dip.”
What counts as an employment benefit?What are employee benefits? Employee benefits are non-cash provisions within the reward package, although they can have a financial cost for employers, for example paid holidays, pensions, or company cars.
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What is a similarity between unemployment insurance benefits and workers compensation benefits?
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