Human Resource Management, 12e (Dessler) Chapter 13 Benefits and Services 1) The indirect financial and nonfinancial payments

employees receive for continuing their employment with a company are called ________. A) reimbursement B) compensation C) salary D) benefits E) remuneration Answer ! E"planation Benefits#indirect financial and nonfinancial payments employees receive for continuing their employment with the company#are an important part of $ust about everyone%s compensation. They include things li&e health and life insurance' pensions' time off with pay' and child(care assistance. !iff 1 )age *ef ++, Chapter 1.b$ective 1 /&ill Concept 0) 1onfinancial payments li&e health and life insurance' pensions' time off with pay' and child care facilities are e"amples of ________. A) variable pay B) competency(based incentives C) benefits !) salary E) bonuses Answer C E"planation Benefits are indirect financial and nonfinancial payments employees receive for continuing their employment with the company. They include things li&e health and life insurance' pensions' time off with pay' and child(care assistance. !iff 1 )age *ef ++, Chapter 1.b$ective 1 /&ill Concept

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-) 5hich of the following benefits is re6uired by federal or state law7 A) disability insurance B) workers' compensation C) personal leave !) health insurance E) pensions Answer B E"planation 8ederal law re6uires that employers provide wor&ers% compensation ' but disability insurance' personal leave' health insurance' and pensions are optional for employers. !iff 0 )age *ef +,9 Chapter 1.b$ective 1 /&ill Concept +) All of the following benefits are re6uired by federal or state law E:CE)T ________. A) social security B) wor&ers% compensation C) unemployment insurance !) disability insurance E) maternity leave Answer ! E"planation /ocial /ecurity' wor&ers% compensation' and unemployment insurance are re6uired by federal and;or state laws. <aternity leave is covered under the 8amily <edical =eave Act. !isability insurance is not re6uired. !iff 0 )age *ef +,9 Chapter 1.b$ective 1 /&ill Concept >) 5hich of the following terms refers to benefits for time not wor&ed such as unemployment insurance' vacation and holiday pay' and sic& pay7 A) supplemental pay benefits B) employee assistance C) financial incentives !) premium benefits E) merit pay Answer A E"planation )ay for time not wor&ed#also called supplemental pay benefits#is the most costly benefit. Common time(off(with(pay periods include holidays' vacations' $ury duty' funeral leave' military duty' personal days' sic& leave' sabbatical leave' maternity leave' and unemployment insurance payments for laid(off or terminated employees. !iff 1 )age *ef +,9 Chapter 1.b$ective 1 /&ill Concept

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,) ?eith wor&s as a construction foreman' and he is viewed as a reliable' competent employee. ?eith was recently in$ured in a car accident while on vacation' and his in$uries are so severe that he will not be able to return to wor&. 5hich of the following would most li&ely provide ?eith with benefits7 A) sic& leave B) unemployment insurance C) wor&ers% compensation insurance !) supplemental unemployment benefits E) group life insurance Answer B E"planation @nemployment insurance provides benefits if a person is unable to wor& through no fault of his or her own. 5or&ers% compensation is for on(the($ob in$uries' and supplemental unemployment benefits provide a guaranteed annual income when certain industries are forced to shut down temporarily. !iff 1 )age *ef +,9 Chapter 1.b$ective 1 /&ill Application 9) 5hich of the following provides pay to an employee when he or she is out of wor& because of illness7 A) sic& leave B) health insurance C) severance pay !) supplemental pay E) wor&ers% compensation Answer A E"planation /ic& leave provides pay to employees when they%re out of wor& due to illness. <ost sic& leave policies grant full pay for a specified number of sic& days#usually up to about 10 per year. !iff 1 )age *ef +,A Chapter 1.b$ective 1 /&ill Concept

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B) 5hat is the ma"imum number of wee&s of unpaid leave that an employee may ta&e under the 8amily and <edical =eave Act7 A) four B) si" C) ten !) twelve E) si"teen Answer ! E"planation )rivate employers of >3 or more employees must provide eligible employees Cwomen or men) up to 10 wee&s of unpaid leave for their own serious illness' the birth or adoption of a child' or the care of a seriously ill child' spouse' or parent. !iff 1 )age *ef +93 Chapter 1.b$ective 1 /&ill Concept A) All of the following are true statements regarding the application of the 8amily and <edical =eave Act E:CE)T ________. A) employers may re6uire employees to provide advance notice and medical certification B) eligible employees must have wor&ed for the employer for at least one year C) employees must be employed at $ob sites with at least >3 employees !) up to 10 wee&s must be granted in a twelve(month period E) employees may ta&e leave on an intermittent basis Answer A E"planation Employers may re6uire employees to provide advance notice and medical certification. Employees are eligible if they have wor&ed for the employer for at least one year and if the employer has at least >3 wor&ers on site. @p to 10 wee&s must be granted' although the time may be ta&en intermittently. !iff )age *ef +93(+91 Chapter 1.b$ective 1 /&ill Concept 13) To be eligible for leave under the 8amily and <edical =eave Act' an employee must have wor&ed ________ hours during the past twelve consecutive months. A) B>3 B) 1333 C) 10>3 !) 1,33 E) 1A>3 Answer C E"planation Employees are eligible if they have wor&ed for the employer for at least one year and for 1'0>3 hours over the last 10 months. !iff 0 )age *ef +91 Chapter 1.b$ective 1 /&ill Concept
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11) Eric has wor&ed full(time for a large manufacturing company for over three years. Eric and his wife have recently adopted a baby' and Eric wants to ta&e time off from wor& to care for the child. 5hich of the following laws most li&ely applies to Eric%s situation7 A) )regnancy !iscrimination Act B) 8amily and <edical =eave Act C) Title D44 of the Civil *ights Act !) 1ewborn <other%s )rotection Act E) Eealth 4nsurance )ortability and Accountability Act Answer B E"planation )rivate employers of >3 or more employees must provide eligible employees Cwomen or men) up to 10 wee&s of unpaid leave for their own serious illness' the birth or adoption of a child' or the care of a seriously ill child' spouse' or parent. !iff 0 )age *ef +93 Chapter 1.b$ective 1 /&ill Application 10) The 8amily and <edical =eave Act ________. A) provides guidelines regarding what rates of return employers should use in computing their pension plan values B) ensures that an employer must grant an employee up to 10 wee&s of leave in a twelve(month period for the birth or care of a newborn child' placement of a child for adoption' to care for a spouse' child' or parent with a serious health condition' or to care for the employee%s own serious health condition C) prohibits an employer%s health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively(determined minimum stay !) limits the ability of health plans to set annual or lifetime ma"imums on mental and nervous disorder benefits E) sets minimum re6uirements for protecting individuals% health(care data accessibility and confidentiality Answer B E"planation The 8<=A of 1AA- ensures that an employer must grant an employee up to 10 wee&s of leave in a twelve(month period for the birth or care of a newborn child' placement of a child for adoption' to care for a spouse' child' or parent with a serious health condition' or to care for the employee%s own serious health condition. !iff 0 )age *ef +93 Chapter 1.b$ective 1 /&ill Concept

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1-) 5hich of the following is 1.T an employer cost associated with granting leave to employees under the 8amily and <edical =eave Act7 A) cost to recruit replacement wor&ers B) cost of paying temporary wor&ers C) cost to train replacement wor&ers !) pay for time not wor&ed to employee E) lower productivity of replacement wor&ers Answer ! E"planation 8<=A leaves are usually unpaid' but they%re not costless. The costs associated with hiring temporary replacements' training them' and compensating for their lower productivity can be considerable. !iff )age *ef +91 Chapter 1.b$ective 1 /&ill Concept 1+) 5hich of the following terms refers to a one(time payment some employers provide when terminating an employee7 A) merit pay B) annual bonus C) severance pay !) performance pay E) competency(based pay Answer C E"planation <any employers provide severance pay' a one(time separation payment when terminating an employee. /everance pay is a humanitarian gesture' and it reduces the chances of litigation from disgruntled former employees is another reason. !iff 1 )age *ef +9Chapter 1.b$ective 1 /&ill Concept 1>) All of the following are typical reasons that employers provide severance pay when downsiFing E:CE)T ________. A) reducing litigation chances B) ensuring good public relations C) reassuring remaining employees !) showing respect for dismissed employees E) adhering to federal government re6uirements Answer E E"planation Employers are not re6uired to provide severance pay. 4t is a humanitarian gesture and good public relations. 4t also reduces the chances of litigation from disgruntled former employees and helps reassure employees who stay on after the employer downsiFes its wor&force. !iff )age *ef +9Chapter 1.b$ective 1 /&ill Concept
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1,) EliFabeth wor&s at an auto firm' which recently shut down for five wee&s to change machinery. Eowever' during the shutdown' EliFabeth was able to maintain her standard of living because of the firm%s ________. A) supplemental unemployment benefits B) wor&ers% compensation insurance C) supplemental health benefits !) disability insurance E) severance pay Answer A E"planation /upplemental unemployment benefits are cash payments that supplement the employee%s unemployment compensation' to help the person maintain his or her standard of living while out of wor&. They generally cover three contingencies layoffs' reduced wor&wee&s' and facility relocations. !iff 0 )age *ef +9Chapter 1.b$ective 1 /&ill Application 19) 5ho contributes funds for wor&ers% compensation benefits7 A) state governments B) federal government C) medical providers !) insurance providers E) employers Answer E E"planation Employers must cary wor&ers% compensation insurance' which is the source of wor&ers% compensation benefits. /tate and federal governments do not contribute to wor&ers% compensation funds. <edical and insurance providers do not contribute. !iff 0 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept 1B) 5hich of the following provides income and medical benefits to wor&(related accident victims or their dependents7 A) severance pay B) sic& leave C) family and medical leave !) wor&ers% compensation E) health insurance benefits Answer ! E"planation 5or&ers% compensation laws aim to provide sure' prompt income and medical benefits to wor&(related accident victims or their dependents' regardless of fault. /everance pay is given to dismissed employees. !iff 1 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept
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1A) Employers must provide employees who have wor&(related in$uries with all of the following E:CE)T ________. A) cash benefits B) medical services C) hospital services !) surgical services E) time off with full pay Answer E E"planation Employers must provide cash benefits and medical' surgical' and hospital services. Time(off with pay is not an aspect of wor&ers% compensation claims. !iff 0 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept 03) 5hich of the following conditions must be met for an in$ured employee to earn wor&ers% compensation from his or her employer7 A) The employee was in$ured while on the $ob. B) The employee suffered the in$ury through no fault of his or her own. C) The employee wor&ed for a minimum of 10>3 hours during the past twelve months. !) The employee wor&ed full(time for the employer for a minimum of twelve months. E) The employee received ade6uate $ob training to understand the position%s re6uirements. Answer A E"planation 8or wor&ers% compensation to cover an in$ury or wor&(related illness' one must only prove that it arose while the wor&er was on the $ob. 4t does not matter that he or she may have been at faultG if the person was on the $ob when the in$ury occurred' he or she is entitled to wor&ers% compensation. !iff )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept 01) 5hich of the following is a popular wor&ers% compensation cost(control measure that involves coordinating the medical care and health insurance coverage for each in$ured employee7 A) nurse management B) case management C) health maintenance !) supplemental payments E) medical rehabilitation Answer B E"planation Case management is a popular cost(control option. 4t is Hthe treatment of in$ured wor&ers on a case(by(case basis by an assigned manager' usually a registered nurse' who coordinates with the physician and health plan to determine which care settings are the most effective for 6uality care and cost.H !iff 0 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept
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00) 5hich health benefit is offered by almost all employers7 A) vision insurance B) chiropractic insurance C) prescription drug coverage !) dependant life insurance E) health maintenance organiFation Answer C E"planation )rescription drug coverage is offered by A,I of employers. .nly ->I offer E<. and >BI offer life insurance for dependents. Chiropractic and vision insurance are popular' but less popular than prescription drug coverage. !iff 0 )age *ef +9> Chapter 1.b$ective 0 /&ill Concept 0-) 5hich of the following is a prepaid health care system that provides medical services for employees who pay a nominal fee7 A) )). B) H ! C) !<. !) E.C E) E/.) Answer B E"planation <any employers offer membership in a health maintenance organiFation CE<.) as a hospital;medical insurance option. The E<. is a medical organiFation consisting of specialists Csurgeons' psychiatrists' and so on)' often operating out of a health care center. 4t provides routine medical services to employees who pay a nominal fee. !iff 1 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept 0+) ________ are groups of health care providers that contract with employers' insurance companies' or third(party payers to provide medical care services at a reduced fee. ") ##!s B) E<.s C) !<.s !) A!!s E) Eospitals Answer A E"planation )referred provider organiFations C)).s) are a cross between E<.s and the traditional doctorJpatient arrangement They are Hgroups of health care providers that contract with employers' insurance companies' or third(party payers to provide medical care services at a reduced fee.H !iff 1 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept
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0>) The primary difference between health maintenance organiFations and preferred provider organiFations is that ________. A) )).s are less costly than E<.s B) E<.s are more fle"ible than )).s C) E<.s offer mental health services while )).s do not !) E<.s allow patients to choose from a list of doctors without gate&eeper doctor approval E) )).s allow patients to choose from a list of doctors without gate&eeper doctor approval Answer E E"planation @nli&e E<.s' )).s let employees select providers Csuch as doctors) from a relatively wide list' and see them in their offices' often without gate&eeper doctor approval. The providers agree to provide discounts and submit to certain utiliFation controls' such as on the number of diagnostic tests they can order. Both E<.s and )).s offer mental health services. !iff )age *ef +9, Chapter 1.b$ective 0 /&ill Concept 0,) All of the following are the most li&ely reasons that mental health costs are rising E:CE)T ________. A) increased drug abuse within society B) more mental health referrals by specialists C) higher alcoholism rates among employees !) mental health claims triggering health care claims E) laws re6uiring employers to offer mental health benefits Answer B E"planation <ental health costs are rising. *easons include widespread drug and alcohol problems' an increase in states that re6uire employers to offer minimum mental health benefits' and the fact that mental health claims tend to trigger other health care claims. *eferrals are less li&ely to e"plain the increased costs. !iff )age *ef +9, Chapter 1.b$ective 0 /&ill Concept 09) 5hich of the following sets minimum mental health care benefits7 A) Civil *ights Act B) Employee <ental Eealth Act C) Americans with !isabilities Act !) <ental Eealth )arity Act E) American *ecovery and *einvestment Act Answer ! E"planation The <ental Eealth )arity Act of 1AA, Cas amended in 033B) sets minimum mental health care benefitsG it also prohibits employer group health plans from adopting mental health benefits limitations without comparable limitations on medical and surgical benefits !iff 0 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept
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0B) 5hich of the following re6uires that most private employers continue to ma&e health benefits available to terminated or retired employees and their families for a period of time7 A) 8<=A B) E*4/A C) C.B*A !) ./EA E) A!A Answer C E"planation C.B*A#Consolidated .mnibus Budget *econciliation Act#re6uires most private employers to continue to ma&e health benefits available to separated employees and their families for a time' generally 1B months after separation. The former employee must pay for the coverage. !iff 1 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept 0A) The Consolidated .mnibus Budget *econciliation Act ________. A) re6uires employers to treat women affected by pregnancy' childbirth' or related medical conditions the same as any employee not able to wor&' with respect to all benefits' including sic& leave and disability benefits' health and medical insurance B) prohibits an employer%s health plan from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively(determined minimum stay C) limits the ability of health plans to set annual or lifetime ma"imums on mental and nervous disorder benefits !) re6uires that most private employers continue to ma&e health benefits available to terminated or retired employees and their families for a period of time E) sets minimum re6uirements for protecting individuals% health(care data accessibility and confidentiality Answer ! E"planation C.B*A#Consolidated .mnibus Budget *econciliation Act#re6uires most private employers to continue to ma&e health benefits available to separated employees and their families for a time' generally 1B months after separation. The former employee must pay for the coverage. !iff 0 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept

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-3) C.B*A re6uires most private employers to continue to ma&e health benefits available to terminated or retired employees and their families for a period of time' generally ________ months. A) B) , C) 10 !) 1B E) 0+ Answer ! E"planation C.B*A#Consolidated .mnibus Budget *econciliation Act#re6uires most private employers to continue to ma&e health benefits available to separated employees and their families for a time' generally 1B months after separation. !iff 0 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept -1) 5hat was the result of the American *ecovery and *einvestment Act of 033A7 A) @nemployed citiFens received C.B*A coverage for free. B) Employers were no longer re6uired to pay C.B*A premiums. C) Employers were re6uired to pay ,>I of the C.B*A premium. !) C.B*A coverage was e"tended to employees dismissed for misconduct. E) C.B*A coverage added dental and vision coverage to the health benefits. Answer C E"planation The American *ecovery and *einvestment Act of 033A made it easier for 6ualified employees who were involuntarily dismissed for any reason Cother than gross misconduct) to sign up for C.B*A. The employer pays ,>I of the premium' and the former employee pays ->I. !iff )age *ef +9,' +99 Chapter 1.b$ective 0 /&ill Concept

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-0) 5hich of the following represents the largest proportion of all reported disabilities7 A) disabling in$uries B) respiratory diseases C) cardiovascular diseases !) mental illness E) cancer Answer ! E"planation The 5orld Eealth .rganiFation estimates that more than -+ million people in the @nited /tates between the ages of 1B and ,+ suffer from mental illness. <ental illnesses represent about 0+I of all reported disabilities' more than disabling in$uries' respiratory diseases' cardiovascular diseases' and cancer combined. !iff 0 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept --) 5hich of the following re6uires employers to treat women affected by pregnancy' childbirth' or related medical conditions the same as any employee not able to wor&' with respect to all benefits7 A) 8amily and <edical =eave Act B) )regnancy !iscrimination Act C) Comprehensive .mnibus Budget *econciliation Act !) Eealth 4nsurance )ortability and Accountability Act E) Americans with !isabilities Act Answer B E"planation The )regnancy !iscrimination Act re6uires employers to treat women affected by pregnancy' childbirth' or related medical conditions the same as any other employees not able to wor&' with respect to all benefits. The 8<=A allows employees to ta&e medical leave for the birth of a child. !iff 0 )age *ef +9B Chapter 1.b$ective 0 /&ill Concept

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-+) 5hich of the following best describes the purpose of the 1ewborn <other%s )rotection Act7 A) provide guidelines regarding what rates of return employers should use in computing their pension plan values B) guarantee pension plans and health insurance coverage for female employees who have recently given birth C) prohibit employer health plans from using incentives to encourage employees to leave the hospital after childbirth sooner than legally re6uired !) prevent employers from discriminating against women affected by pregnancy or childbirth in respect to benefits coverage E) set minimum re6uirements for accessing the health records of female employees Answer C E"planation The 1ewborn <other%s )rotection Act of 1AA, prohibits employers% health plans from using incentives to encourage employees to leave the hospital after childbirth after less than the legislatively determined minimum stay. !iff 1 )age *ef +9B Chapter 1.b$ective 0 /&ill Concept ->) All of the following are preventive services offered by employers as part of their wellness programs E:CE)T ________. A) anti(smo&ing incentives B) low(cost immuniFations C) stress management seminars !) case management services E) on(site primary care Answer ! E"planation Anti(smo&ing programs' immuniFations' on(site health care services' and stress management seminars are all wellness programs offered by employers to prevent employee health problems. Case management is a method used by employers to save money in wor&ers% compensation claims. !iff 0 )age *ef +9B Chapter 1.b$ective 0 /&ill Concept

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-,) 4n which of the following can employers and employees deposit preta" wages to pay for non( catastrophic medical e"penses7 A) health maintenance organiFations B) health benefits funds C) health savings accounts !) employee pension plans E) deferred savings plans Answer C E"planation The <edicare <oderniFation Act of 033- allows employers to establish ta"(free health savings accounts CE/A). After the employer' employee' or both deposit preta" Cand thus ta" sheltered) pay in the employees% E/As' employees or their families can use their E/A funds to pay for Hlow dollarH Cnot catastrophic) medical e"penses. !iff 1 )age *ef +9B Chapter 1.b$ective 0 /&ill Concept -9) All of the following are health care cost(control methods used by employers E:CE)T ________. A) re6uiring employees to pay high premiums B) offering disease prevention programs C) auditing medical claims for errors !) re6uiring disability insurance E) encouraging medical tourism Answer ! E"planation Auditing claims' encouraging medical tourism' and increasing wellness programs are ways that employers try to control health care costs. Employers are also re6uiring employees to pay higher premiums and co(payments than in the past. *e6uiring disability insurance is less li&ely to reduce health care costs. !iff 0 )age *ef +9B Chapter 1.b$ective 0 /&ill Concept

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-B) 5hich of the following provides lower rates for the employer or employee and includes all employees regardless of health' physical condition' or length of employment7 A) wor&ers% compensation insurance B) group life insurance C) health savings accounts !) disability insurance E) pension plans Answer B E"planation 4n addition to hospitaliFation and medical benefits' most employers provide group life insurance plans. Employees can usually obtain lower rates in a group plan. And group plans usually accept all employees#including new' nonprobationary ones#regardless of health or physical condition. !iff 1 )age *ef +9A Chapter 1.b$ective 0 /&ill Concept -A) 5hich of the following is =EA/T li&ely to e"plain the growing percentage of part(time wor&ers7 A) economic recession B) phased retirement programs C) desire to balance wor& and family !) women in the wor&force E) minimum wage increases Answer E E"planation About 1A million people wor& part(time. The recession' more phased retirement' a desire to better balance wor& and family life' and more women in the wor&force help e"plain this phenomenon. 4ncreases in the minimum wage are less li&ely to e"plain the increase of part(time employees. !iff 0 )age *ef +9A(+B3 Chapter 1.b$ective 0 /&ill Concept +3) 8or individuals born in 1A,3 or later' the full retirement age for non(discounted social security benefits is ________. A) >> B) ,0 C) ,> !) ,9 E) 93 Answer ! E"planation H8ull retirement ageH for non(discounted social security benefits traditionally was ,>#the usual age for retirement. 4t is now ,9 for those born in 1A,3 or later. !iff 0 )age *ef +B3 Chapter 1.b$ective /&ill Concept
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+1) /ocial /ecurity offers all of the following E:CE)T ________. A) income for retirees ,0 or older who are insured under the /ocial /ecurity Act B) survivor%s benefits for those insured under the /ocial /ecurity Act C) disability payments to employees who become totally disabled !) ta" refunds for retirees who are >> and older E) <edicare program administration Answer ! E"planation // provides an income if you retire at age ,0 or thereafter and are insured under the /ocial /ecurity Act. /urvivor%s benefits provide monthly payments to your dependents regardless of your age at death' again assuming you are insured under the /ocial /ecurity Act. There are also disability payments to employees who become disabled totally if they meet certain re6uirements. The /ocial /ecurity system also administers the <edicare program' but ta" refunds are not part of the /ocial /ecurity system. !iff )age *ef +B3 Chapter 1.b$ective /&ill Concept +0) Eow is the /ocial /ecurity program funded7 A) sale of government bonds B) ta" on employee wages C) interest earned on foreign loans !) lottery tic&et sales E) sales ta" on lu"ury goods Answer B E"planation A ta" on the employee%s wages' shared e6ually by employees and employers' funds /ocial /ecurity Ctechnically' H8ederal .ld Age and /urvivor%s 4nsuranceH). As of 033A' the ma"imum amount of earnings sub$ect to /ocial /ecurity ta" was K13,'B33. !iff 0 )age *ef +B3 Chapter 1.b$ective /&ill Concept +-) 5hich of the following provides a fi"ed sum when employees reach a predetermined retirement age or can no longer wor& due to disability7 A) +31C&) plan B) wor&ers% compensation C) /ocial /ecurity !) pension plan E) group life insurance Answer ! E"planation )ension plans are financial programs that provide income to individuals in their retirement. )ension plans provide a fi"ed sum when employees reach a predetermined retirement age or when they can no longer wor& due to disability. !iff 0 )age *ef +B3 Chapter 1.b$ective /&ill Concept
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++) Ta"es on employee wages are shared e6ually by employees and employers and apply to all earnings up to ________. A) K+,'>33 B) K,-'933 C) KB9'A33 !) K13,'B33 E) K10+'-33 Answer C E"planation As of 033A' the ma"imum amount of earnings sub$ect to /ocial /ecurity ta" was K13,'B33. Employer and employee each paid 9.,>I. !iff 0 )age *ef +B3 Chapter 1.b$ective /&ill Concept +>) <edicare provides a wide range of health services to people ________ or over. A) >> B) >A C) ,3 !) ,0 E) ,> Answer ! E"planation The /ocial /ecurity system also administers the <edicare program' which provides health services to people age ,> or older. !iff 1 )age *ef +B3 Chapter 1.b$ective /&ill Concept +,) 5hen an employer ma&es all of the contributions to the pension plan' the pension plan is classified as ________. A) 6ualified B) non(6ualified C) defined contribution !) non(contributory E) defined benefit Answer ! E"planation )ension plans are classified in three ways contributory versus non(contributory plans' 6ualified versus non(6ualified plans' and defined contribution versus defined benefit plans. The employee contributes to the contributory pension plan' while the employer ma&es all contributions to non(contributory plans. !iff 1 )age *ef +B3 Chapter 1.b$ective /&ill Concept

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+9) A plan that contains a formula for determining retirement benefits is &nown as a ________. A) defined contribution pension plan B) employee stoc& ownership plan C) defined benefit pension plan !) cash balance plan E) +31C&) plan Answer C E"planation 5ith defined benefit pension plans' employees &now ahead of time the pension benefits they will receive Cthe benefit is HdefinedH or specified by amount or formula). 4n contrast' defined contribution pension plans specify what contribution the employee and;or employer will ma&e to the employee%s retirement or savings fund. !iff 1 )age *ef +B3 Chapter 1.b$ective /&ill Concept +B) <alcolm is interviewing for a new $ob and he is evaluating the 6uality of the pension plans offered for each company he is considering. .ne company offers a pension plan in which the company will ma&e all contributions to the plan and will base his pension benefit on a formula lin&ed to his pay at the time of retirement and the number of years he was with the firm. This pension plan could be classified as ________. A) 6ualified' defined benefit B) non(contributory' defined benefit C) non(contributory' defined contribution !) contributory' 6ualified E) contributory' defined benefit Answer B E"planation The employee contributes to the contributory pension plan' while the employer ma&es all contributions to non(contributory plans. 5ith defined benefit pension plans' employees &now ahead of time the pension benefits they will receive Cthe benefit is HdefinedH or specified by amount or formula). !efined contribution pension plans specify what contribution the employee and;or employer will ma&e to the employee%s retirement or savings fund. Therefore' <alcolm has a non(contributory' defined benefit pension plan. !iff )age *ef +B3 Chapter 1.b$ective /&ill Application

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+A) Lenny must contribute at least >I of her annual salary to her pension plan' and her employer contributes a set amount as well. /he is given choices regarding how the money is invested. 5hen she retires' the amount she has available will depend on how much she invested herself' and the rate of return on the investments she chose. This pension plan could be classified as ________. A) 6ualified' defined benefit B) non(contributory' defined benefit C) contributory' defined contribution !) contributory' non(6ualified E) contributory' defined benefit Answer C E"planation The employee contributes to the contributory pension plan' while the employer ma&es all contributions to non(contributory plans. 5ith defined benefit pension plans' employees &now ahead of time the pension benefits they will receive Cthe benefit is HdefinedH or specified by amount or formula). !efined contribution pension plans specify what contribution the employee and;or employer will ma&e to the employee%s retirement or savings fund. Therefore' Lenny has a contributory' defined contribution plan. !iff )age *ef +B3(+B1 Chapter 1.b$ective /&ill Application >3) A plan in which the employer%s contribution to employees% retirement savings funds is specified is &nown as a ________. A) portable plan B) default investment plan C) /ocial /ecurity pension plan !) defined benefit pension plan E) defined contribution pension plan Answer E E"planation !efined contribution pension plans specify what contribution the employee and;or employer will ma&e to the employee%s retirement or savings fund. 5ith defined benefit pension plans' employees &now ahead of time the pension benefits they will receive Cthe benefit is HdefinedH or specified by amount or formula). !iff 1 )age *ef +B1 Chapter 1.b$ective /&ill Concept

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>1) All of the following are characteristic of +31C&) plans E:CE)T ________. A) categoriFed as a defined contribution plan B) deduction replaces /ocial /ecurity ta" C) preta" salary deductions invested !) administered by investment firms E) considered a savings and thrift plan Answer B E"planation A +31C&) plan is a defined contribution plan and a savings and thrift plan. Employees invest by ma&ing preta" salary deductions' and the plans are usually administered by investment firms. A +31C&) contribution does not replace the /ocial /ecurity ta". !iff )age *ef +B1 Chapter 1.b$ective /&ill Concept >0) 5hich of the following refers to a plan in which employees contribute a portion of their earnings to a fund and the employer typically matches the contribution in whole or part7 A) fle"ible benefits plan B) group investment plan C) savin$s and thrift plan !) deferred profit(sharing plan E) employee stoc& ownership plan Answer C E"planation 4n any savings and thrift plan' employees contribute a portion of their earnings to a fund' and the employer usually matches this contribution completely or in part.The +31C&) plan is one e"ample of a savings and thrift plan. !iff 1 )age *ef +B0 Chapter 1.b$ective /&ill Concept >-) All of the following characteriFe cash balance plans E:CE)T ________. A) favors younger employees B) considered hybrid pension plans C) offers portability and predictable benefits !) employees earn interest on contributed amounts E) employers contribute percentage of employees% current pay Answer A E"planation Cash balance plans favor older rather than younger employees because older employees usually have higher incomes. They are hybrid plans because they combine the portability of defined contribution plans and the predictable benefits of defined benefit plans. !iff )age *ef +B0 Chapter 1.b$ective /&ill Concept

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>+) 5hich of the following re6uires that pension rights be vested and protected by the )ension Benefits Muarantee Corporation7 A) Economic Mrowth and Ta" *elief Conciliation Act B) Employee *etirement 4ncome /ecurity Act C) Lob Creation and 5or&er Assistance Act !) Eealth 4nsurance )ortability and Accountability Act E) /ocial /ecurity Act Answer B E"planation /igned into law by )resident 8ord in 1A9+' E*4/A re6uires that pension rights be vested and protected by a government agency' the )BMC. 4t re6uires that employers have written pension plan documents and adhere to certain guidelines. !iff 1 )age *ef +B0 Chapter 1.b$ective /&ill Concept >>) 5hich of the following provides guidelines regarding what rates of return employers should use in computing their pension plan values7 A) Employee *etirement 4ncome /ecurity Act B) Economic Mrowth and Ta" *elief Conciliation Act C) Lob Creation and 5or&er Assistance Act !) /ocial /ecurity Act E) E6ual )ay Act Answer C E"planation The Lob Creation and 5or&er Assistance Act provides guidelines regarding what rates of return employers should use in computing their pension plan values. E*4/A re6uires that employers have written pension plan documents and adhere to certain guidelines. !iff 0 )age *ef +B0 Chapter 1.b$ective /&ill Concept >,) ________ provide services li&e financial counseling' child care referrals' elder care referrals' adoption assistance' mental health counseling' and life event planning. A) /ocial /ecurity programs B) )ension plans C) %mployee assistance pro$rams !) 8amily(friendly benefits E) Benefit management systems Answer C E"planation Employee assistance programs CEA)s) provide counseling and advisory services' such as personal legal and financial services' child and elder care referrals' adoption assistance' mental health counseling' and life event planning. EA)s are increasingly popular' with more than ,3I of larger firms offering such programs. !iff 1 )age *ef +B> Chapter 1.b$ective + /&ill Concept
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>9) ________ see& to enable employees to balance their $ob and family responsibilities. A) /ic& leave B) )ension plans C) )ay plans !) 5or&(life benefits E) Benefit management systems Answer ! E"planation 8amily(friendly or wor&(life benefits such as child care and fitness facilities are attempts by firms to help employees balance wor& and family responsibilities. !iff 1 )age *ef +B> Chapter 1.b$ective + /&ill Concept >B) 5hich of the following benefits is 1.T classified as a type of family(friendly benefit7 A) sic& leave B) subsidiFed child care C) elder care services !) on(site fitness facilities E) fle"ible wor& schedules Answer A E"planation &amily'friendly benefits include subsidiFed child care' on(site fitness facilities' elder care services' and fle"ible wor& schedules. /ic& leave is useful when a child is illG however' sic& leave is a standard aspect of a $ob and not necessarily family(friendly. !iff 0 )age *ef +B>(+B,' +A1 Chapter 1.b$ective +' > /&ill /ynthesis >A) 4ndividualiFed plans allowed by employers to accommodate employee preferences for benefits is &nown by which of the following terms7 A) variable pay plan B) cafeteria benefits plan C) matching plan !) e"ecutive per6uisite plan E) life e"pectancy plan Answer B E"planation A cafeteria plan is one in which the employer gives each employee a benefits fund budget' and lets the person spend it on the benefits he or she prefers. !iff 1 )age *ef +A3 Chapter 1.b$ective > /&ill Concept

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,3) .rion is a business software firm based in Atlanta that employs over +33 people. .rion has traditionally provided legislatively re6uired benefits for its employees including /ocial /ecurity' wor&ers% compensation' and unemployment insurance. 4n addition' .rion offers employees health and dental insurance. .rion employees wor& <onday through 8riday on a A to > schedule. .rion%s top e"ecutives are considering the idea of adding a fle"ible benefits plan and implementing a fle"ible wor& schedule. 5hich of the following' if true' best supports the argument that .rion should offer its employees a cafeteria plan7 A) .rion lac&s the resources to $oin a low(cost health insurance plan' so the firm belongs to a pool with other businesses. B) /ome .rion employees have indicated that they would li&e vision insurance' while others have no interest in dental insurance. C) 4n the past' .rion%s rates for life' health' and dental insurance have been reasonable' and the firm has managed to &eep deductibles low. !) .rion offers its employees a )). health insurance plan' but employees have e"pressed interest in an E<. plan. E) .rion outsources its employee benefits program' so employees go through the plan%s administrator when filing claims. Answer B E"planation Cafeteria plans enable employees to choose the benefits they need. 4f some wor&ers want vision while others want dental' then a cafeteria plan would be appropriate. Loining an insurance pool and outsourcing benefits administration are not relevant. Choices C and ! are not directly relevant to whether or not a cafeteria plan is best for .rion. !iff )age *ef +A3 AAC/B Analytic /&ills Chapter 1.b$ective > /&ill Critical Thin&ing

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,1) .rion is a business software firm based in Atlanta that employs over +33 people. .rion has traditionally provided legislatively re6uired benefits for its employees including /ocial /ecurity' wor&ers% compensation' and unemployment insurance. 4n addition' .rion offers employees health and dental insurance. .rion employees wor& <onday through 8riday on a A to > schedule. .rion%s top e"ecutives are considering the idea of adding a fle"ible benefits plan and implementing a fle"ible wor& schedule. 5hich of the following' if true' undermines the argument that .rion should offer its employees a cafeteria plan7 A) A survey of .rion employees indicates that the ma$ority of employees are very satisfied with the firm%s current benefit offerings. B) .rion e"periences very few wor&ers% compensation claims each year as compared to similarly siFed businesses in the Atlanta area. C) .rion employee surveys indicate that most employees are interested in either +31 C&) plans or *oth 4*As as methods of saving for retirement. !) Absenteeism is a problem among .rion employees' and in most cases the problem is due to inade6uate child care. E) .rion uses an employee leasing firm to handle recruiting' hiring' and benefits administration. Answer A E"planation 4f .rion%s employees are satisfied with the type of benefits offered by the firm' then there is no need to change to a cafeteria plan. Cafeteria plans are useful when employees want more choice and variety in their benefits. 5or&ers% compensation' retirement savings' child care' and employee leasing are irrelevant issues. !iff )age *ef +A3 AAC/B Analytic /&ills Chapter 1.b$ective > /&ill Critical Thin&ing ,0) 5hich of the following best e"plains why many businesses use employee leasing firms7 A) 8irms save money by hiring part(time or temporary wor&ers. B) 4nvestment opportunities are more plentiful and reliable. C) /mall companies are able to get better insurance rates. !) 8ranchise owners can offer more fle"ible schedules. E) /mall businesses must comply with federal laws. Answer C E"planation Employee leasing firms Calso called professional employer organiFations or staff leasing firms) assume all or most of the employer%s human resources chores. 4nsurance and benefits are usually the big attraction. Metting health and other insurance is a problem for smaller firms' and leasing firms enable them to $oin a larger pool. !iff )age *ef +A1 Chapter 1.b$ective > /&ill Concept

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,-) /tephanie has opted to wor& from 9 am to - pm so that she can be home when her son finishes school in the afternoons. Eer company must offer ________ for /tephanie to have this option. A) wor& sharing B) shift wor& C) fle(time !) telecommuting E) compressed wor&wee&s Answer C E"planation 8le"time is a wor& schedule in which employees% wor&days are built around a core of midday hours' and employees determine' within limits' what other hours they will wor&. A compressed wor&wee& involves wor&ing fewer but longer days each wee&. !iff 1 )age *ef +A0 Chapter 1.b$ective > /&ill Application ,+) 5hich of the following is an e"ample of a compressed wor&wee&7 A) <a"well wor&s from 9 am to - pm <onday(8riday. B) /hannon wor&s from 9 am to > pm <onday(Thursday. C) Tom wor&s from 11 am to 9 pm five days per wee&. !) Amy wor&s from A pm to > am five days per wee&. E) Bob wor&s from 10 pm to , pm <onday(/unday. Answer B E"planation A compressed wor&wee& involves wor&ing fewer but longer days each wee&' so wor&ing four 13(hour days is an e"ample of a compressed wor&wee&. 8le"time is a wor& schedule in which employees% wor&days are built around a core of midday hours' and employees determine' within limits' what other hours they will wor&. !iff )age *ef +A0 Chapter 1.b$ective > /&ill Application ,>) 5hich of the following occupations is commonly sub$ected to compressed wor&wee&s7 A) engineer B) attorney C) teacher !) pilot E) manager Answer ! E"planation .ccupations li&e pilot' nurse' doctor' and firefighter typically involve compressed wor&wee& schedules' which means wor&ing fewer days but longer each day. !iff 0 )age *ef +A0 Chapter 1.b$ective > /&ill Application

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,,) Anne and <artha are both accountant supervisors at a large mar&eting firm. Anne wor&s from 9 33 a.m. until 10 33 p.m. each day. <artha ta&es over the same position at 10 33 p.m. and wor&s until > 33 p.m. each day. 5hich of the following most li&ely describes this type of wor& arrangement7 A) fle"time B) telecommuting C) $ob sharing !) wor& sharing E) compressed wor&wee& Answer C E"planation Lob sharing allows two or more people to share a single full(time $ob. Anne and <artha share a +3(hour(per(wee& $ob' with one wor&ing mornings and the other wor&ing afternoons. )ork sharin$ refers to a temporary red*ction in work ho*rs by a $ro*p of employees d*rin$ economic downt*rns as a way to prevent layoffs+ !iff 0 )age *ef +A0 Chapter 1.b$ective > /&ill Application ,9) Curt wor&s at a computer firm that is e"periencing financial difficulties. 4n an attempt to save money and prevent layoffs' the firm is enforcing a temporary reduction in wor& hours for Curt%s division. Curt now wor&s -> hours a wee& instead of +3. 5hich of the following most li&ely describes this situation7 A) fle"time B) telecommuting C) $ob sharing D) work sharin$ E) compressed wor&wee& Answer ! E"planation 5or& sharing refers to a temporary reduction in wor& hours by a group of employees during economic downturns as a way to prevent layoffs. Lob sharing allows two or more people to share a single full(time $ob. 8le"time is a wor& schedule in which employees% wor&days are built around a core of midday hours' and employees determine' within limits' what other hours they will wor&. !iff 0 )age *ef +A0 Chapter 1.b$ective > /&ill Application

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,B) .rion is a business software firm based in Atlanta that employs over +33 people. .rion has traditionally provided legislatively re6uired benefits for its employees including /ocial /ecurity' wor&ers% compensation' and unemployment insurance. 4n addition' .rion offers employees health and dental insurance. .rion employees wor& <onday through 8riday on a A to > schedule. .rion%s top e"ecutives are considering the idea of adding a fle"ible benefits plan and implementing a fle"ible wor& schedule. All of the following 6uestions are relevant to .rion%s decision to add a cafeteria plan E:CE)T ________. A) Eow satisfied are .rion%s employees with the current benefits plan7 B) 5hat benefits are available to employees at .rion%s main competitors7 C) 5hat costs would .rion incur for switching to a cafeteria benefits plan7 !) Eow would a cafeteria plan alter .rion employees% /ocial /ecurity benefits7 E) 5hat effect would a cafeteria plan have on the coverage that .rion employees receive7 Answer ! E"planation /ocial /ecurity is re6uired' so it is irrelevant to a decision about a cafeteria plan. Employee attitudes about the current plan' costs' and changes in coverage are important issues to consider. 8or recruiting and employee retention purposes' .rion should be aware of what competitors offer. !iff )age *ef +A3 AAC/B Analytic /&ills Chapter 1.b$ective > /&ill Critical Thin&ing ,A) .rion is a business software firm based in Atlanta that employs over +33 people. .rion has traditionally provided legislatively re6uired benefits for its employees including /ocial /ecurity' wor&ers% compensation' and unemployment insurance. 4n addition' .rion offers employees health and dental insurance. .rion employees wor& <onday through 8riday on a A to > schedule. .rion%s top e"ecutives are considering the idea of adding a fle"ible benefits plan and implementing a fle"ible wor& schedule. 5hich of the following' if true' best supports .rion%s decision to offer fle"time to its employees7 A) .rion is facing financial difficulties and may need to implement layoffs. B) .rion%s single(parent employees are fre6uently late when arriving to wor&. C) .rion allows some of its employees to telecommute at least one day each wee&. !) <any .rion employees must conduct business while traveling to different locations. E) .rion employs a large number of part(time employees' most of whom are near retirement age. Answer B E"planation 8le"time allows wor&ers to shift their wor& schedules slightly. /ingle parents who are late because of child care responsibilities would li&ely be more punctual if they could arrange their schedules around school or daycare hours. 5or& sharing applies to Choice A' while wor&place fle"ibility applies to Choice !. !iff )age *ef +A0 AAC/B Analytic /&ills Chapter 1.b$ective > /&ill Critical Thin&ing
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93) .rion is a business software firm based in Atlanta that employs over +33 people. .rion has traditionally provided legislatively re6uired benefits for its employees including /ocial /ecurity' wor&ers% compensation' and unemployment insurance. 4n addition' .rion offers employees health and dental insurance. .rion employees wor& <onday through 8riday on a A to > schedule. .rion%s top e"ecutives are considering the idea of adding a fle"ible benefits plan and implementing a fle"ible wor& schedule. All of the following 6uestions are relevant to .rion%s decision to offer fle"time and $ob sharing options to its employees E:CE)T ________. A) Eow many of .rion%s retirement(age employees are interested in wor&ing on a part(time basis7 B) 5hat do surveys indicate regarding overall $ob satisfaction among .rion employees7 C) Eow would the productivity level of .rion%s employees most li&ely change7 !) Eow many .rion employees currently care for their aging parents7 E) 5hat is the average rate of employee absenteeism at .rion7 Answer ! E"planation *etirement(age employees would most li&ely be interested in $ob sharing. Lob satisfaction' productivity' and absenteeism are important issues to consider if going to a fle"ible wor& schedule. 8le"ible benefits rather than fle"ible schedules are applicable to elder care issues. !iff )age *ef +A0 AAC/B Analytic /&ills Chapter 1.b$ective > /&ill Critical Thin&ing 91) Benefits are an important aspect of employee compensation' and they involve the direct financial payments employees receive for remaining with an employer. Answer 8A=/E E"planation Benefits are indirect financial and nonfinancial payments employees receive for continuing their employment with the company. !irect financial payments are salaries and bonuses. !iff 1 )age *ef +,, Chapter 1.b$ective 1 /&ill Concept 90) Eealth care costs have dropped significantly in recent years due to government intervention and the increased use of E<.s. Answer 8A=/E E"planation Eealth care costs are rising not dropping. /ince 0331' health care premiums have risen about 9BI' while inflation rose only 19I. !iff 0 )age *ef +,, Chapter 1.b$ective 1 /&ill Concept

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9-) Employee benefits account for about one(third of wages and salaries. Answer T*@E E"planation Employee benefits account for between --IJ+3I of wages and salaries Cor about 0BI of total payrolls)G legally re6uired benefits Cli&e unemployment insurance) are the most e"pensive benefits costs' followed by health insurance. !iff 0 )age *ef +,, Chapter 1.b$ective 1 /&ill Concept 9+) =egally re6uired benefits' such as unemployment insurance' are more costly to employers than health insurance. Answer T*@E E"planation Employee benefits account for between --IJ+3I of wages and salaries Cor about 0BI of total payrolls)G legally re6uired benefits Cli&e unemployment insurance) are the most e"pensive benefits costs' followed by health insurance. !iff 0 )age *ef +,, Chapter 1.b$ective 1 /&ill Concept 9>) /upplemental pay benefits provide employees with time(off(with pay for $ury duty' vacations' funerals' and military responsibilities. Answer T*@E E"planation )ay for time not wor&ed#also called supplemental pay benefits#is the most costly benefit' because of the large amount of time off that most employees receive. Common time(off(with(pay periods include holidays' vacations' $ury duty' funeral leave' military duty' personal days' sic& leave' sabbatical leave' and maternity leave. !iff 0 )age *ef +,9 Chapter 1.b$ective 1 /&ill Concept 9,) <ost employees in America receive fourteen days of leave after wor&ing for a company for one year. Answer 8A=/E E"planation .n average' American wor&ers get B.A days of leave after 1 year%s employment. !ays off rise to about 11 after - years' 1+ after > years' and 1, after 13 years. !iff 0 )age *ef +,B Chapter 1.b$ective 1 /&ill Concept

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99) !ocumenting employee absences' conducting e"it interviews' and re6uiring written approval for personal leave are employer methods for controlling unemployment insurance costs. Answer T*@E E"planation Employers spend thousands of dollars on unemployment ta"es' which would not be necessary if they protected themselves with e"tensive documentation. Employers can control unemployment insurance costs by recording employeesN absences' re6uiring advance written approval for personal leave' and conducting e"it interviews to produce information for protesting unemployment claims. !iff 0 )age *ef +,B Chapter 1.b$ective 1 /&ill Concept 9B) 8ederal law re6uires private sector employers to grant a minimum amount of paid vacation leave. Answer 8A=/E E"planation 4t is up to the discretion of private firms to decide how many leave days to offer employees' if any. !iff 0 )age *ef +,B(+,A Chapter 1.b$ective 1 /&ill Concept 9A) )ooled paid leave plans combine sic& leave' vacation' and personal days into a single leave pool and have been blamed for increasing employee absenteeism. Answer 8A=/E E"planation )ooled plans lump together sic& leave' vacation' and personal days' and they have been shown to reduce employee absences. !iff 0 )age *ef +93 Chapter 1.b$ective 1 /&ill Concept B3) The stipulations of the 8amily and <edical =eave Act apply to private employers of >3 or more employees. Answer T*@E E"planation )rivate employers of >3 or more employees must provide eligible employees Cwomen or men) up to 10 wee&s of unpaid leave for their own serious illness' the birth or adoption of a child' or the care of a seriously ill child' spouse' or parent. !iff 0 )age *ef +93 Chapter 1.b$ective 1 /&ill Concept

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B1) /ince leaves associated with the 8amily and <edical =eave Act do not re6uire employers to pay salaries' employers are not financially affected. Answer 8A=/E E"planation 8<=A leaves are usually unpaid' but they%re not costless. The costs associated with hiring temporary replacements' training them' and compensating for their lower productivity can be considerable. !iff 0 )age *ef +91 Chapter 1.b$ective 1 /&ill Concept B0) 4n addition to the funds contributed by employers' each state also contributes to funds for wor&ers% compensation. Answer 8A=/E E"planation Every state has its own wor&ers% compensation law and commission' and some run their own insurance programs. Eowever' most re6uire employers to carry wor&ers% compensation insurance with private' state(approved insurance companies. 1either the state nor the federal government contributes any funds for wor&ers% compensation. !iff 0 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept B-) 4n most states' wor&ers% compensation benefits have no time limit' so in$ured employees may receive monetary and medical compensation for the duration of their employment. Answer 8A=/E E"planation <ost states have a time limit#such as >33 wee&s#for which benefits can be paid. !iff 0 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept B+) 4f an employee is in$ured at wor& due to a blatant disregard for company safety policies' the company is not re6uired to pay wor&ers% compensation. Answer 8A=/E E"planation 8or wor&ers% compensation to cover an in$ury or wor&(related illness' one must only prove that it arose while the wor&er was on the $ob. 4t does not matter that he or she may have been at fault. !iff 0 )age *ef +9+ Chapter 1.b$ective 0 /&ill Concept

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B>) Employers are prohibited from in6uiring about an applicant%s past wor&ers% compensation history by the Americans with !isabilities Act. Answer T*@E E"planation A!A provisions generally prohibit employers from in6uiring about an applicant%s wor&ers% compensation history. !iff 0 )age *ef +9+ Chapter 10 .b$ective 0 /&ill Concept B,) !isability insurance provides income protection for salary loss due to illness or accident. Answer T*@E E"planation !isability insurance provides income protection for salary loss due to illness or accident. Benefits usually range from >3I to 9>I of the employee%s base pay if he or she is disabled. !iff 1 )age *ef +9> Chapter 1.b$ective 0 /&ill Application B9) The Consolidated .mnibus Budget *econciliation Act re6uires the government to provide health insurance to terminated or retired employees and their families through the <edicare system. Answer 8A=/E E"planation The Consolidated .mnibus Budget *econciliation Act re6uires most private employers to continue to ma&e health benefits available to separated employees and their families for a time' generally 1B months after separation. The former employee must pay for the coverage. !iff 1 )age *ef +9, Chapter 1.b$ective 0 /&ill Concept BB) The <edicare <oderniFation Act allows employers to establish ta"(free health savings accounts. Answer T*@E E"planation The <edicare <oderniFation Act of 033- allows employers to establish ta"(free health savings accounts CE/A).The assumption is that this will motivate employees to utiliFe less e"pensive health care options' and thus avoid big deductibles. !iff 1 )age *ef +9B Chapter 1.b$ective 0 /&ill Concept

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BA) /ocial /ecurity provides health benefits to terminated employees and their families for 1B months following the employee%s separation from the firm. Answer 8A=/E E"planation C.B*A provides health benefits to retired and terminated employees and their families for 1B months following the employee%s separation from the firm. /ocial /ecurity provides income for retirees. !iff 1 )age *ef +B3 Chapter 1.b$ective /&ill Concept A3) A primary benefit of +31C&) plans is that payments made by employees into the plan are preta"' so the employee pays no ta" on those dollars until after he or she retires or withdraws the money. Answer T*@E E"planation )ayroll deductions for +31C&) plans are preta"' so the employee pays no ta" on those dollars until after he or she retires Cor removes the money from the +31C&) plan). !iff 0 )age *ef +B1 Chapter 1.b$ective /&ill Concept A1) There is no limit to the amount an employee can contribute pre(ta" into a +31C&) plan each year. Answer 8A=/E E"planation Employees deduct any amount up to the legal ma"imum. The 4*/ sets an annual dollar limit' which is currently about K1>'333. !iff 0 )age *ef +B1 Chapter 1.b$ective /&ill Concept A0) )ortability ma&es it easy for employees who leave one firm to wor& for another firm to ta&e their accumulated pension funds with them. Answer T*@E E"planation )ortability#ma&ing it easier for employees who leave the firm prior to retirement to ta&e their accumulated pension funds with them#is enhanced by switching from defined benefit to defined contribution plans. !iff 1 )age *ef +B1 Chapter 1.b$ective /&ill Concept

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A-) The )ension Benefits Muarantee Corporation guarantees both defined benefit plans and defined contribution plans. Answer 8A=/E E"planation E*4/A established the )ension Benefits Muarantee Corporation C)BMC) to oversee and insure a pension if a plan terminates without sufficient funds. The )BMC guarantees only defined benefit plans' not defined contribution plans. !iff 0 )age *ef +B0 Chapter 1.b$ective /&ill Concept A+) /tudies indicate that employee assistance programs most fre6uently provide help with personal mental health issues and family problems. Answer T*@E E"planation EA)s are increasingly popular' with more than ,3I of larger firms offering such programs. .ne study found that personal mental health was the most common problem addressed by employee assistance programs' followed by family problems. !iff 0 )age *ef +B> Chapter 1.b$ective + /&ill Concept A>) 8irms that subsidiFe day care centers are hoping to recruit employee' reduce absenteeism' decrease turnover' and improve morale. Answer T*@E E"planation By establishing subsidiFed day care' employers assumedly can benefit in several ways. These include improved recruiting results' lower absenteeism' improved morale' favorable publicity' and lower turnover. !iff 0 )age *ef +B, Chapter 1.b$ective + /&ill Concept A,) 5hen employers offer domestic partner benefits to employees' it means that employees% same(se" domestic partners are eligible to receive the same benefits as do the husband' wife' or legal dependent of one of the firm%s employees. Answer T*@E E"planation 5hen employers provide domestic partner benefits to employees' it generally means that employees% same(se" or opposite(se" domestic partners are eligible to receive the same benefits Chealth care' life insurance' and so forth) as do the husband' wife' or legal dependent of one of the firm%s employees. !iff 1 )age *ef +BB Chapter 1.b$ective + /&ill Concept

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A9) 8le"time for most employees typically involves one hour of leeway before A am or after > pm. Answer T*@E E"planation 4n practice' most employers hold fairly close to the traditional A 33 a.m. to > 33 p.m. wor&day. Therefore' the effect of fle"time for most employees is to give them about 1 hour of leeway before A 33 a.m. or after > 33 p.m. !iff 0 )age *ef +A0 Chapter 1.b$ective > /&ill Concept AB) The more fle"ible a wor& schedule' the greater the effectiveness of the program. Answer 8A=/E E"planation /tudies have found that highly fle"ible programs are actually less effective than less fle"ible ones. !iff 0 )age *ef +A0 Chapter 1.b$ective > /&ill Concept AA) )roviding employees with i)hones' laptops' or other tools they need to get their $obs done in any location is &nown as wor&place fle"ibility. Answer T*@E E"planation 5or&place fle"ibility means arming employees with the information technology tools they need to get their $obs done wherever they are. !iff 1 )age *ef +A0 AAC/B @se of 4T Chapter 1.b$ective > /&ill Concept 133) 5hen groups of employees accept a temporary reduction in wor& hours in order to prevent layoffs' the employees are $ob sharing. Answer 8A=/E E"planation Lob sharing allows two or more people to share a single full(time $ob. 5or& sharing refers to a temporary reduction in wor& hours by a group of employees during economic downturns as a way to prevent layoffs. !iff 1 )age *ef +A0 Chapter 1.b$ective > /&ill Concept

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131) 5hat policy issues must employers address when developing benefit plans7 5hat federal laws influence employers% pension and health plans7 Answer 4n developing benefit plans' employers must address numerous policy issues including 1) what benefits to offerG 0) who receives coverageG -) whether to include retirees in the planG +) whether to deny benefits to employees during the initial HprobationaryH periodsG >) how to finance benefitsG ,) the degree of employee choice in determining benefitsG 9) cost(containment proceduresG and B) how to communicate benefits options to employees. C.B*A' E*4/A' 8<=A' E4)AA' and the A!A have significant impacts on employers% pension and health plans. !iff )age *ef +,9' +9,(+9B AAC/B *eflective Thin&ing Chapter 1.b$ective 1' 0 /&ill /ynthesis 130) 5hat benefits are re6uired by federal or state laws7 5hat benefits are discretionary on the part of employers7 Answer Benefits re6uired by law include /ocial /ecurity' unemployment insurance' wor&ers% compensation' and leaves under the 8<=A. !iscretionary benefits include disability' health' and life insurance' pension plans' e"ecutive per&s' paid time off' employee assistance programs' and family(friendly benefits. !iff 0 )age *ef +,9 Chapter 1.b$ective 1 /&ill Application

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13-) As an E* manager' you need to control costs associated with unemployment insurance. 5hat are some steps you can ta&e to protect your employer from paying unemployment claims for employees who were dismissed for inade6uate performance7 Answer O ?eep a documented history of lateness' absence' and warning notices O 5arn chronically late employees before discharging them O Eave a policy that three days% absence without calling is reason for automatic discharge O *e6uest a doctor%s note on return to wor& after absence O <a&e written approval for personal leave mandatory O /tipulate date for return to wor& from leave O .btain a signed resignation statement O <ail $ob abandonment letters if an employee fails to return on time following a leave O !ocument all instances of poor performance O *e6uire supervisors to document the steps ta&en to remedy the situation O 8ile the protest against a former employee%s unemployment claim on time O @se proper terminology on claim form and attach documented evidence regarding separation O Attend hearings and appeal unwarranted claim O Chec& every claim against the individual%s personnel file O *outinely conduct e"it interviews to produce information for protesting unemployment claims !iff )age *ef +,B Chapter 1.b$ective 1 /&ill Application 13+) 5hat is sic& leave7 5hy is sic& leave problematic for many employers7 5hat family( friendly benefits may alleviate some of these problems7 Answer /ic& leave provides pay to employees when they are out of wor& due to illness. <ost sic& leave policies grant full pay for a set number of sic& days and the sic& days accumulate over time. The problem with sic& leave is that many employees use sic& leave for reasons other than illness. /ome use the days as vacation or to ta&e care of family issues' personal needs' and stress. 8amily(friendly benefits li&e subsidiFed child care elder care may alleviate some of the problems by providing employees with options for ta&ing care of their children or aging parents. !iff )age *ef +,A' +B>(+B, Chapter 1.b$ective 1' + /&ill /ynthesis

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13>) )rivate employers forced to downsiFe are re6uired to provide C.B*A coverage' and some firms offer dismissed employees severance pay. Eow do employers benefit from providing severance pay to dismissed employees7 Eow do employees benefit from C.B*A7 Answer /everance pay is a one(time payment offered when terminating an employee. There are several reasons for a firm to offer severance pay. 4t shows good will to the employee. 4t is good public relations. 4t is fair since most employees e"pect to receive notice in advance of an employee leaving to offer the same sort of notice to the employee. 4t can protect the company from litigation from disgruntled former employees. C.B*A' Consolidated .mnibus Budget *econciliation Act' re6uires most private employers to continue to ma&e health benefits available to separated employees and their families for a time' generally 1B months after separation. Although the former employee must pay for the coverage' it enables coverage to continue without interruption until the individual finds a new $ob or purchases his or her own health insurance policy. !iff )age *ef +9-' +9, AAC/B *eflective Thin&ing Chapter 1.b$ective 1' 0 /&ill /ynthesis 13,) Because health care coverage is one of the most e"pensive benefits employers provide' many employers are trying to cut costs. 5hat are some strategies for minimiFing costs associated with employee health care7 Eow do employee leasing firms help small businesses lower their health insurance costs7 Answer /everal possible strategies include wellness programs'on(site primary care' retaining cost containment specialists' offering health savings accounts' and closely auditing claims. Employee leasing firms assume all or most of the employer%s human resources chores. 4nsurance and benefits are usually the big attraction. Metting health and other insurance is a problem for smaller firms. Even group rates for life or health insurance can be 6uite high when only 03 or -3 employees are involved. The leasing firm is the legal employer of your employees' so the employees therefore are absorbed into a much larger insurable group' along with other employers% former employees. As a result' a small business owner may be able to get insurance for its people that it couldn%t otherwise afford.+A1 =. > !iff )age *ef +9B(+9A' +A1 AAC/B *eflective Thin&ing Chapter 1.b$ective 0' > /&ill /ynthesis

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139) 5hat are the three types of benefits provided by /ocial /ecurity7 Answer /ocial /ecurity provides retirement benefits' death benefits' and disability payments. *etirement benefits provide income to those who retire at age ,0 or after. !eath benefits provide monthly payments to dependents of the deceased individual regardless of the individual%s age at death. !isability payments provide payments to employees who become totally disabled and to their dependents if they wor& and meet certain re6uirements. !iff 0 )age *ef +B3 Chapter 1.b$ective /&ill Application 13B) 5hat are vested funds7 5hat is the difference between cliff vesting and graded vesting7 Answer Dested funds are the money employer and employee have placed in the latter%s pension fund that cannot be forfeited for any reason. The employees% contributions are always theirs' of course. Employers can choose one of two minimum vesting schedules Cemployers can allow funds to vest faster if they wish). 5ith cliff vesting' the period for ac6uiring a nonforfeitable right to employer matching contributions Cif any) is - years. /o' the employee must have nonforfeitable rights to these funds by the end of - years. 5ith the second Cgraded vesting) option' pension plan participants must receive nonforfeitable rights to the matching contributions as follows 03I after 0 years' and then 03I for each succeeding year' with a 133I nonforfeitable right by the end of , years. !iff )age *ef +BChapter 1.b$ective /&ill Application 13A) 5hat are the &ey steps for launching a successful EA) program7 /hould firms offer EA)s7 5hy or why not7 Answer 4n either case' employers and managers need to &eep several issues in mind. Everyone involved with the EA)' including supervisors' secretaries' and support staff' must understand the importance of confidentiality. Also' ensure files are loc&ed' access is limited and monitored' and identifying information is minimiFed. Be aware of legal issues. 8or e"ample' in most states counselors must disclose suspicions of child abuse to state agencies. !efine the program%s purpose' employee eligibility' the roles and responsibilities of EA) and employer personnel' and procedures for using the plan. Also' ensure the vendors you use fulfill professional and state licensing re6uirements. 8or employers' EA)s produce advantages' not $ust costs. Employee assistance programs can reduce absences by providing e"pert advice on issues li&e elder care referrals. !iff )age *ef +B> AAC/B Analytic /&ills Chapter 1.b$ective + /&ill Critical Thin&ing

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113) 5hy are family(friendly benefits and fle"ible benefits increasingly popular7 )rovide e"amples of both types of programs. Answer There are many trends that increase the value of family(friendly benefits. There are more households in which both adults wor&. There are more one(parent households. <ore women are in the wor&force while also struggling to fulfill familial obligations. )eople are wor&ing harder and longer with less time to manage life outside of wor&. 8amily(friendly benefits can vary from organiFation to organiFation. /ome e"amples include child care' elder care' fitness facilities' and concierge services. Employees prefer having choice in their benefits options' which is why fle"ible benefits plans are increasingly popular. Employers offer fle"ible spending accounts' medical debit cards' and coreplus option plans. !iff )age *ef +B>' +BB(+A3 AAC/B *eflective Thin&ing Chapter 1.b$ective +' > /&ill /ynthesis

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