Compensation laws designed to protect the employees of an organization. A compensation package comprises of monetary and non-monetary benefits to help an organization in retaining the highly qualified, to spark high performance, and to attract quality applicants. Those compensations will vary from industry to industry and from employer to employer within those industries. The size of the organization and the number of employees will dictate how many benefits are offered in a total compensation plan.
The list of benefits is too plentiful to mention more than once and are covered later in this paper.
This list could go on and on as it continues to grow with the diversity of America’s workforce. One particular item of interest in the biotech industry would be the health coverage portion of the total compensation plan.
Laws and Regulations Influencing Total Compensation
The Patient Protection and Affordable Health Care Act is one law that companies need to consider in creating a total compensation plan. It was initiated to aid individuals in obtaining healthcare coverage, even those who were unemployed. “The Affordable Care Act actually refers to two separate pieces of legislation — the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) — that, together expand Medicaid coverage to millions of low-income Americans and makes numerous improvements to both Medicaid and the Children’s Health Insurance Program (CHIP)” (Affordable Care…n.d.).
There are several laws that relate to compensation plans and the different aspects of pay. The first being The Fair Labor Standards Act of 1938. “The Fair Labor Standards Act is responsible for establishing minimum wage, recordkeeping regulations, overtime pay rates and youth employment standards, which affect employees in both the private sector and in Federal, State and local governments” (What you should…n.d.).
The Equal Pay Act (1963) was an amendment to the FLSA and restricts any kind of discrimination based on sex for men and women working at similar jobs and in the same workplace. Another law is “The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans” (U.S. Department of Labor, n.d.).
An important thing to remember is that “Compensation systems must be consistent with the existing legislation in the areas of Labour Standards, equal pay, Human Rights, Employment Insurance, pension or retirement benefits, labor relations and Occupational Health and Safety” (Compensation & Benefits, n.d.).
Similarities and Differences in Total Compensation between Organizations
Biotechnology in simple terms deals with biology, and as such this industry is at a greater risk for health issues and must take into consideration a compensation plan placing emphasis on health insurance and monetary rewards. These two combined areas will attract better quality applicants and keep those deserving of mention on-board. This company with only 200 employees will begin with a total compensation plan consisting of: competitive pay, health insurance, matching 401(k) contributions, bonus programs based on job performance.
Eli Lilly & Company offers their employees so many benefits it makes it easy to choose them as an employer: financial wellness, career development, health insurance, time off, lifecare resource and referral service, on-site child development centers, support groups, no-stress dress code, food services, “free gym membership, Lilly fitness centers, Lilly recreational park & sports and hobby clubs” (One decision…2014) just to name a few. This list is very extensive and far too long to list on this paper.
SC Johnson’s total compensation is ever evolving and includes: “bonuses, long-term incentives and benefits, profit sharing, matching on 401(k) contributions; and potential bonus payments based on job performance, subsidized health care benefits, maternity/paternity/adoption leave, recreation and fitness centers, vacation purchase options, paid sabbaticals, flexible work arrangements, counseling services, child care, onsite training, family-oriented programs, maternity/paternity/adoption leave, child care, and family volunteer events, scholarships for students and more” (Compensation and benefits, n.d.).
In order to attract “only the best” it is paramount that any compensation package offered be the deciding factor. The total compensation package being offered is comparative, similar and acceptable in the industry.
Affordable Care Act. (n.d.). Affordable Care Act. Retrieved from Medicaid.gov: http://www.medicaid.gov/AffordableCareAct/Affordable-Care-Act.html Compensation & Benefits. (n.d.). Compensation & Benefits. Retrieved from hrcouncil.ca: http://www.hrcouncil.ca/hr-toolkit/compensation-systems.cfm Compensation and benefits. (n.d.). Compensations and Benefits. Retrieved from SC Johnson, A Family Company: http://www.scjohnson.com/en/Careers/culture/benefits.aspx One decision…many benefits. (2014). One decision-many benefits. Retrieved from Eli Lilly: http://www.lilly.com/Documents/2014-FTE.pdf U.S. Department of Labor. (n.d.). Retirement Plans, Benefits & Savings. Retrieved from United States Department of Labor: http://www.dol.gov/dol/topic/retirement/erisa.htm What You Know About The Fair Labor Standards Act. (n.d.). What you should know about the Fair Labor Standards Act. Retrieved from: Laws: http//employment.laws.com/fair-labor-standards-act
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Organizational Objectives and Total Compensation. (2016, Sep 26). Retrieved from https://studymoose.com/organizational-objectives-and-total-compensation-essay