Cafeteria Benefits and Your Workforce

Cafeteria plans shave become increasingly popular over the last few years because they were designed to offer employees a truly convenient way to pay medical expenses with pre-tax dollars.

Keywords:

interim staffing, interim services, interim solutions, hr consulting, temp human resource services, project personnel, interim executive recruiting, Chicago, Dallas, Boca Raton, Atlanta, interim executive staffing, workforce planning, interim staffing consultants, workforce development, recruiting consultants, human resource consultants, interim managers, interim professionals

Article Body:

Especially if you happen to be one of those unflinchingly ambitious micro-business entrepreneurs, I’ve been reading about everyday in pubs like Crain’s Chicago Business, you’ll eventually find that designing and offering up an attractive employee-benefits package will be an essential component of your future growth. An attractive health plan will do just that – attract – helping you recruit and retain crucial employees (meaning those fought over creative class/knowledge worker types Richard Florida is always yammering about). You’ll also find that a generous group plan will help link your employees' interests to your concern’s.

That said, there are a seemingly unlimited number of group benefits options to consider. One that you’ll want to move to the top of your list is a Cafeteria Plan. The cafeteria brand of benefit plan can add a lot freedom to a employee compensation package, allowing your workforce to choose benefits options ala carte, if you will – selecting only the benefit options they’re most interested in.

Perhaps I should start closer to the beginning … cafeteria plans, also known as the flexible spending account, the choice spending account or the section 125 plan, have become increasingly popular over the last few years because they’re designed to offer employees a truly convenient way to pay medical expenses with pre-tax dollars; relieving them of the burden of federal, and state taxes.

To take advantage of a flexible spending account, eligible employees set aside a pre-designated amount each year, in order to pay for medical expenses aren’t already eligible for coverage. The two most common types of flexible-spending accounts are dependent care reimbursement (also known as DCRAs) and health care reimbursement accounts. Employees pay for non-reimbursed expenses from these accounts. Unfortunately, flexible-spending accounts are "use-it-or-lose-it" accounts; meaning that any funds leftover at the end of the year can’t be “rolled over,” so to speak.

Exceptions To Those Limits Apply to Key Employees

Typically, funds set aside in a cafeteria plan's flexible-spending account are exempt from income, payroll, and unemployment taxes. This exemption generally also applies to payroll and unemployment taxes paid on behalf of employees. (Take a look at IRS Pub. 15-B for exceptions, including treatment of highly compensated employees and certain shareholders of Subchapter S Corporation’s.)

Premiums paid to a group life benefits policy are typically exempt from income and unemployment taxes. In addition, premiums paid for up to $50,000.00 of benefits coverage per employee tend to be exempt from payroll taxes. For additional details, see IRS Publication 15-B.

You see, cafeteria plans offer you some versatility in putting together a benefits plan for your workforce. There are other categories of fringe benefits that you can offer your employees in a cafeteria plan that may be excluded from taxable income under IRS benefit-exclusion rules. Using a flexible-spending account -- namely, establishing a DCRA and HCRA -- may help to jump-start a cafeteria plan for your workforce. If you maintain a cafeteria plan, the IRS requires you to complete IRS Form 5500.

To help you keep track of employment-related costs, the U.S. Bureau of Labor Statistics (BLS) publishes a quarterly statistic called the employment cost index. The cost index measures changes in employee-compensation costs, which include salaries, wages, and benefits. In addition to publishing the quarterly cost index, BLS publishes an annual survey of compensation costs.

One last thing … the information above is practically for entertainment purposes and shouldn’t be interpreted as financial advice. For advice specific to your firm’s circumstances, don’t hesitate get advice from a financial, tax or benefits consultant. You may even want to flat out hire an Interim benefits consultant or a full service benefits consulting firm. There are also a number of good sources of information on the Web you can take advantage of. The Employee Benefits Research Institute (EBRI), International Foundation of Employee Benefit Plans (IFEBP), and American Benefits Council are independent sources of truly “actionable” employee-benefit plan information.

Fixed Versus Flexible Working Hours in Workforce Management

Flexible working hours have been found to lead to a happier workforce, and to far better customer service and share valuations. However, there is a fear that implementing flexible working hours is complicated and that it could lead to a flood of impossible demands from employees.

Keywords:

Time and Attendance, time, attendance, Employee Scheduling, Absence Management, Rostering, workforce management, workforce scheduling

Article Body:

Flexible working hours have been found to lead to a happier workforce, and to far better customer service and share valuations. However, there is a fear that implementing flexible working hours is complicated and that it could lead to a flood of impossible demands from employees.

Before we look at flexible working hours in more detail, let us take a brief look at the standard working hours.

Working Hours for Employees

Working hours for employees have changed dramatically over the last two centuries. Back in the nineteenth century when industrialization started in Europe, workers were compelled to work even 16 hours a day. In twenty-first century France, however, the government had fixed working hours at 35 hours a week.

Most industrialized countries have regulated the workweek by stipulating the maximum number of working hours per week, minimum daily rest periods, annual holidays and sickness pay. The standard is around 40 working hours per workweek, typically Monday through Friday. Paid vacations range from three to five weeks a year.

Long working hours can lead to stress-related health problems, less time for busy parents to attend to child-rearing, and less leisure to enjoy consumer products and services. Henry Ford introduced low working hours so that his employees would have the leisure to buy and enjoy the cars he produced.

Flexible Working Hours and its Impact

One major problem with fixed working hours is that employees find it difficult to balance the demands of their personal lives and work lives. Flexible working hours can lead to better work/life balance and result in a happier workforce.

Flexible working hours can come in different forms such as:

• Part-time working that enables an employee to be free during business hours to attend to personal matters. For employers, it could mean engaging employees during peak workload hours, and reducing overall payroll costs






• Flexi-time working where employees work extra time when needed by employers and bank the extra hours/days off for arranging their personal commitments






• Annualized hours is an arrangement where times worked and times off are balanced across the year as a whole. Extra hours are worked during peak business seasons and less during lean seasons. Employers can retain experienced employees instead of hiring inexperienced casual or contract staff






• Customized flexible working hours during special events to enable employees watch, say, world cup matches and yet meet their work time requirements

Studies have indicated that flexible working hours produce tangible benefits to employers in the forms of:

• Reduced absenteeism and employee turnover






• Lower recruitment costs as they can retain their existing staff






• Higher staff morale leading to better work performance, customer service and even company stock performance

A survey even revealed that employees preferred flexible working hours to substantial additional pay.

Implementing Flexible Working Hours

Employers must know when they have peak workloads, needing more employees. This is not too difficult to assess with today's technologies like EPOS and computerized systems that can record transaction times.

Once the requirements are identified, flexible rostering software can generate rosters to fit the workload. This software would then help to optimize the rosters to meet:

• Work contract requirements






• Sociability factors, and






• Employee work preferences to the extent possible

Where employee preferences cannot be met in full, the software would show the employees why this happened. This creates greater trust in the employees that their needs are being genuinely attended to.

Conclusion

The standard practice so far has been fixed working hours arranged in different shifts. This can lead of difficulties in balancing employees' personal and work life demands. Flexible working hours help better work/life balance and lead to a happier workforce. A happier workforce results in less absenteeism, better customer service and higher stock performance.

Drug Testing: A Workforce In Dilemma

When I began my working career, drug testing was not even a word combination. I had never been exposed to drugs beyond the point of alcoholic beverages, and then only on special occasions and holidays. To contemplate daily usage of some foreign substance was beyond my realm of possibilities. I was not alone. That was twenty-five years and many drug issues ago.

Today, if you apply for a job, of any kind, you will be drug tested. Why? Because a lot has changed in twenty-five...

Keywords:

Article Body:

When I began my working career, drug testing was not even a word combination. I had never been exposed to drugs beyond the point of alcoholic beverages, and then only on special occasions and holidays. To contemplate daily usage of some foreign substance was beyond my realm of possibilities. I was not alone. That was twenty-five years and many drug issues ago.

Today, if you apply for a job, of any kind, you will be drug tested. Why? Because a lot has changed in twenty-five years. Today, the prevalence of drug abuse in every level of our society has grown beyond anyone’s belief. Drugs have infected our teens, our adults, the rich, the poor; even the sanctuaries of our churches are no longer exempted. If you can manage to reach the age of thirteen, without exposure to marijuana, hallucinogenic substances, or the common place alcoholic beverage, you are an exception. With so many opportunities for experimentation, it’s no wonder that we have a problem with drug addiction in our workplace. Once a young person becomes addicted to a drug, the chances of abstinence are low, until it begins to affect their ability to generate an income, or interact in relationships.

The point of intervention for most employers is to simply prohibit the employment of an individual that tests positive for drug use. The cost to employers for employees with drug or substance abuse problems is staggering. Employees will cost their twice as much in medical bills and workmen’s compensation claims. Drug related crime is the second largest expense to an employer. Lost productivity for victims and lost employees due to incarceration for drug crimes accounts for the bulk of the drug related expense.

Thanks to the advent of drug testing in the workplace, drug use rates have continued to decline since 1992, and remain stabilized today around 7%. Implementing a drug testing program in your place of business has never been easier, and the cost is minimal. Businesses have access to many hundreds of companies that are drug testing administrators. These companies will provide your business with everything you need to drug test all employees, or randomly test a few employees. You simply notify the administrating company when you’re ready to test, and they handle the rest. The administrator performs onsite interviewing and testing, proceeds to having the tests processed and providing you with the results.

Drug testing for the most common illegal drugs is readily available, and some of the more difficult testing options can be incorporated at the customer’s request. Drug test kits for the most common tests require the individual being tested to supply a certain amount of urine, in a tube, vial, or small cup. Introduction of a fairly new test strip further ensure the laboratory that the urine provided is not “borrowed” and brought into the testing facility. Other common forms of test methods are saliva, hair and blood. Generally speaking, however, urine provides the most reliable results at the most economical expense.