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Free «Employee Compensation and Benefits» Essay Sample

Employee compensation refers to all forms of payment that workers receive, including all direct and indirect financial compensations (Gerhart, Minkoff, & Olsen, 1995). On the other hand, employee benefits refer to the optional or non-wage compensation that workers receive on top of their salaries or wages. The benefits may include group insurance, retirement benefits, income to protect an employee in case of disability, tuition reimbursement, daycare, paid and non-paid vacation, and funding of education among others. Even though providing employees with comprehensive benefits plans may be expensive, the intrinsic benefits cannot be underestimated. The plans give employers the ability to find and maintain highly qualified staff to achieve their organizational goals. The employment sector is becoming highly competitive while the number of new employees joining the workforce is declining. Therefore, the management should be more creative and receptive in designing and timing its generous benefits plans. Progressive and flexible organizations respond well to the contemporary challenges, for example, having employees from different generations working side by side. In contrast, employers who stick to the traditional or limited programs are unlikely to find and keep various workers. This assignment examines the laws and regulations that regulate compensation and benefits, challenges in implementing the laws, and the role of different stakeholders in ensuring compliance with the laws.

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The Various Laws and Regulations That Regulate Compensation and Benefits

The Fair Labor Standards Act lays down standards for wages, salaries, and overtime pay for both private and public employment. The Act requires employers to ensure that employees receive the federal minimum wage and overtime pay that is 150% of the regular rate (United States Department of Labor, n.d.).

The Longshore and Harbor Workers’ Compensation Act ensures that some maritime employees and qualified dependent survivors of the employees receive compensation and medical care. The benefits are received in case the employees die or become disabled while on duty in the US or in areas where loading, unloading, building, or repair of a vessel occur.

The Energy Employees Occupational Illness Compensation Program Act provides a lump-sum compensation of $150,000 and future medical benefits to those who work in the energy department, contractors, and subcontractors who get cancer because of the exposure to radiation.

The Federal Employees’ Compensation Act sets up an exclusive workers’ plan providing compensation, medical costs, and vocational rehabilitation for employees who lose their wages due to partial or total disability (United States Department of Labor, n.d.).

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The Employee Retirement Income Security Act regulates employers offering welfare and pension benefits plans to their workers. It also imposes various fiduciary and disclosure requirements on pension, benefits plans, and other dealings.

The Family and Medical Leave Act mandates employers with 50 or more employees to ensure that workers have 12 weeks unpaid leave. It also ensures job protection to those who are eligible (United States Department of Labor, n.d.).

The Challenges That an Organization Faces in Implementing the Laws

Work Place Diversity

Diversity in the workplace includes age, ethnicity, gender, physical abilities, ancestry, race, educational background, sexual orientation, marital status, income, and work experience (Judge & Bretz, 1992). With the changing competitive market environment, employers should focus on attracting and retaining the best talents. The future success of any organization depends on how diverse staff members perceive their work environment. Meeting the labor demands of workers from different cultural backgrounds, lifestyles, ages, and genders may be a challenge to an employer.

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Lack of In-House Dispute Resolution Mechanism

In the course of implementing the laws, both employees and employers may feel aggrieved at certain points. Whenever problems arise, there is a need to solve them amicably. Dispute resolution depends on employees’ participation. Employers with effective communication procedures and workplace problem-solving mechanisms build trust before complaints escalate (Dixon, Hayes, & Stack, 2004). However, in most cases, employers do not have streamlined in-house dispute resolution mechanisms, which may affect the implementation of the labor laws.

Lack of Multiple Options for Handling Workplace Problems

There have to be multiple options because employees are different, preferring either informal, confidential, or formal problem-solving procedures (Dixon et al., 2004). Therefore, it is problematic to meet these needs during the implementation of the laws. Some of the multiple options include negotiation, counseling, and assistance through a trained mediator, facilitator, and peer reviewer before issuing final decisions.

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The Role of Management, Employees, and Unions in Compliance with the Labor Laws and Regulation

Every workplace is unique; therefore, every management should develop only relevant policies. In establishing the need for a regulation or law, the management has to ensure that there is no regulation that expressly requires having the policy. Besides, it has to ensure that there is no inconsistency in employees’ decision-making behavior that is negatively impacting the organization or accomplishment of businesses. For policies that require legislations, it has to ensure that the policy contents rest on the requirements of the legislation. Moreover, it has to ensure that employees and other key stakeholders are constantly updated or have copies of laws and regulations applied within the organization. Furthermore, employees have the responsibility of reading and understanding the laws and regulations on labor, which can be helpful in avoiding making unwarranted claims for benefits. In addition, workers should be willing to talk with their employers to express their feelings regarding their understanding of the laws. Through this, the employer can help to make substantiations where the laws or regulations appear to be unclear. Moreover, unions have the responsibility of educating the members about their rightful claims. In addition, unions are responsible for negotiating with the employer on behalf of the members.

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Recommendations for an Organization to Monitor and Ensure Compliance with the Laws and Regulations

The first recommendation is to adopt an in-house dispute resolution strategy as labor disputes are bound to occur in any organization. However, a number of effective systems of resolution based on respect and rights promote a climate of trust. There is a need for an open door policy where employees can approach their managers on matters of law. Specifically, workers should be able to contact managers in a higher position with whom they had a dispute.

The second recommendation is to have a binding arbitration where public law disputes can be solved. It is apparent that not all labor related problems could be solved in-house. Whenever voluntary procedures fail to work, an organization has to resort to a system that provides a lasting solution. Therefore, there is a need to have private arbitration options to solve labor disputes. Private arbitration allows the employee to express even the most contentious grievance without denting working relationship with the employer.

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Lastly, employers have the responsibility of ensuring that they understand various benefits and award employees accordingly. This approach can minimize the chances of the occurrence of claims or straining the relationship with the employees.


An employee can receive direct and indirect financial compensations depending on the agreement with the employer or law requirements. Employee benefits include group insurance, retirement benefits, income to protect an employee in case of disability, tuition reimbursement, daycare, paid and non-paid vacation, sick leave, and funding of education. The comprehensive benefits plans may be expensive, but the employer has to provide them to attract the best talents to achieve organizational goals.

Some of the laws and regulations that employers need to consider when it comes to labor relations include Fair Labor Standards Act, Longshore and Harbor Workers’ Compensation Act, Energy Employees Occupational Illness Compensation Program Act, Federal Employees’ Compensation Act, Family and Medical Leave Act, and Employee Retirement Income Security Act among others. Among the laws are those that are not applied unilaterally while others can be implemented in all sectors. Therefore, employees have to analyze and understand the law that is applicable in their area of work before making claims. Evidently, any organization trying to implement various laws is bound to meet a number of challenges. However, the effectiveness of the organization’s solving the challenges determines the success of its operations.

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