Question

Chapter 13 – Employee Benefits

Carter Cleaning Centers, a chain of ten dry cleaning centers, has traditionally provided only legislatively required benefits for its employees. Jack’s (the owner of Carter Cleaning Centers) daughter just recently graduated from FGCU with a degree in business administration with a management major and HRM concentration. Jack has asked Jennifer to examine and make recommendations regarding the benefits Carter Cleaning Services provides to its employees and if there is a case to be made to offer additional benefits.

Jennifer knows that turnover is a current problem. She wonders if providing greater employee benefits would reduce employee turnover. She knows that if Carter Cleaning Services was to add new benefits that salaries would have to be reduced to offset some of these new benefit expenses.

a.   What are the legislatively required benefits that Carter Cleaning must provide to its employees?

b.   What would you tell Jennifer are the advantages and disadvantages to Carter Cleaning Centers offering to its employees a health insurance program? What would you recommend the health insurance program contain?

Answer 1

a) The legislatively required benefits which Carter Cleaning must provide to its employees are as follows:

· Social security tax

· Health Insurance

· Family Medical Leave

· Medicare tax contribution

· Workers Compensation

· Unemployment insurance

b) The advantages of offering a health insurance program to the employees are as follows:

· Employees feel more secure, working in the company

· Employees feel valued by the company

· The motivation level of the employees is quite high

· The overall productivity and performance of employees is high

· The employer brand of the company enhances

· The company will gain tax advantages from the government

The disadvantages of offering a health insurance program to the employees are as follows:

· Health insurance may add cost to the company

· Finding the relevant health policy can be quite time consuming and complex process

The health insurance program must cover the employee as well as his immediate family. Hospitalization as well as medication charges must get covered by the program. This is the basic minimum but quite essential benefit which can be given to the employees.

**Do rate the solution. Thank You.