YourHiddenPaycheck

AnEmployeeCommunicationPresentation2Introduction Mostemployersarediligentaboutprovidinginformationtoemployeesonthecompany’spaystructureandhowanindividualemployee’spayiscalculated.However,manyemployersfailtocommunicatetotheiremployeesthetotalvalueoftheircompensationwhichincludesthe“hiddenpaycheck”ofallthebenefits,mandatoryandvoluntary,towhichtheemployercontributesandsponsors.Periodicpersonalizeddocumentationtoeachemployeeonannualpayandthe“hiddenpaycheck”resultsinincreasedawarenessandappreciationforthecostsofbenefits,higheremployeemoraleandretention. Thissamplepresentationisintendedforpresentationtoallemployees.Itisdesignedtobepresentedbyanindividualwhohasknowledgeoftheemployer’sbenefitprograms.Thisisasamplepresentationthatmustbecustomizedtoincludeandmatchtheemployer’sownbenefitpackage.3AgendaDuringthismeeting,wewillreview:Whattheterm“hiddenpaycheck”means.Thebenefitswelegallyprovidetoyou.Thebenefitswevoluntarilyprovidetoyou.Thevalueofallbenefitsyoureceiveasapercentageofyourpay.4WhatDoestheTerm“HiddenPaycheck”Mean? HRprofessionalsoftenusetheterm“hiddenpaycheck”torefertotheemployer’scontributionstoemployeebenefitsofwhichemployeesaregenerallyunaware. Statementsdocumentingthesecontributionsarealsocalled“TotalCompensationStatements”or“TotalRewardsStatements.” Hereat[CompanyName]wecallthesestatements(fillinforyourowncompany). Youwillreceiveyour[StatementTitle]next[date].Wearehavingthismeetingtodaytohelpyoubetterunderstandthestatementwhenyoudoreceiveit.

5WhatDoestheTerm“HiddenPaycheck”Mean?(cont’d)Your[StatementTitle]listsyourtotalannualpay,theamount[CompanyName]spendsonbenefitswelegallycontributeto,andtheamountspentonbenefitsprovidedvoluntarily.Thestatementalsoincludesbenchmarkdataontheamountemployersspendonbenefitsasapercentageofpayrollandhowourcompanycomparestothenationalaverage.6LegallyProvidedBenefitsLegallyprovidedormandatedbenefitsarethoserequiredbyfederalandstatelaws.Theseincludecontributionsfor:SocialSecurityandMedicare:Thesearefederallymandatedandadministeredbenefits.Thecostissharedequallybytheemployerandemployee.ThemaximumwagebasefortheSocialSecuritytaxissetannually;ifanemployeeearnsovertheamount,theexcessisnottaxed.TheMedicaretaxdoesNOThaveawagebaselimit;allearningsaresubjecttothistax.7LegallyProvidedBenefits(cont’d)Otherlegallyprovidedbenefitsare:WorkersCompensationThisisastate-basedprogramthatprovidesmedicaltreatment,wagelossreimbursement,vocationalrehabilitation,anddeath/burialbenefitstovictims(orsurvivingdependents)forindustrialaccidentsandoccupationaldiseases.Inmoststates,theemployeristhesolecontributortothisprogram.8LegallyProvidedBenefits(cont’d)UnemploymentInsuranceThisisacombinedfederalandstateprogramthatbeganduringtheGreatDepression.Unemploymentbenefitsareawardedtoindividualswhoareready,willing,andabletoworkandunabletofindsuitablework.Thecostissharedbytheemployerandemployee.Somestatesalsohavedisabilityprogramswhichrequirecontributionsfromtheemployerandemployee.9Questions?Comments?10BenefitsProvidedVoluntarily(Notetopresenter:Customizeforyourcompany!)Thebenefitsthat[CompanyName]providesvoluntarilyandthatthecompanyandemployeesshareinthecostare:HealthinsurancePrescriptiondruginsuranceDentalinsuranceVisioninsuranceCommuterbenefits(parking,vanpools,masstransittokens)

(Employeecontributionsfortheprecedingplansmaybemadeonapre-taxcontributionresultinginlowerincometaxes)11BenefitsProvidedVoluntarily(cont’d)Thebenefitsthat[CompanyName]providesvoluntarilyandthatthecompanypays100%ofthecostare:Retirement/pensionplan(adefinedbenefitplan)Employermatchtoemployee401(k)contributionsTermlifeinsuranceAccidentaldeathanddismembermentinsuranceShort-termdisabilityinsuranceLong-termdisabilityinsuranceLong-termcareinsurance12BenefitsProvidedVoluntarily(cont’d)Otherbenefitsthat[CompanyName]providesvoluntarilyandthatthecompanypays100%ofthecostare:IncentivebonusesPaidtimeoff:VacationleaveSickleaveHolidaysPersonalDaysBereavementLeavePaidweather-relatedemergencyclosingleave13BenefitsProvidedVoluntarily(cont’d)Additionalbenefitsthat[CompanyName]providesvoluntarilyandthatthecompanypays100%ofthecostare:Tuitionassistance(upto$5,250tax-freeperyear)Employeeassistanceprogram(EAP)On-sitefitnesscenterOn-sitechildcareComputerpurchaseassistanceScholarshipsforchildrenofemployeesPaidsabbaticalsDirectdepositofpaySocialgatherings(holidayparty,summerpicnic)14BenefitsProvidedVoluntarily(cont’d)Inaddition[CompanyName]sponsorsandpaystheadministrationfeesforthefollowingbenefitplanswhichemployeesmayparticipateinbymakingcontributions:401(k)savingsandretirementplanHealthsavingsaccountHealthflexiblespendingaccountDependentcareflexiblespendingaccount15ValueofBenefitsasaPercentageofPayAccordingtothe2008SHRMEmployeeBenefitsReport,employersspentanaverageof39%ofanemployee’sannualpayonmandatoryandvoluntarybenefits.Ofthe39%,21%wasspentonmandatorybenefitsand18%onvoluntarybenefits.[CompanyName]spendsanaverageof[useyourcalculation]ofanemployee’sannualpayonmandatoryandvoluntarybenefits.Ofthe(_%),(_%)isspentonmandatorybenefitsand(_%)onvoluntarybenefits.16Questions?Comments?17Summary Theterm“hiddenpaycheck”referstotheemployer’scontributionstoemployeebenefitsofwhichemployeesaregenerallyunaware.Statementsdocumentingthesecontributionsarealsocalled“TotalCompensationStatements”or“TotalRewardsStatements.”Thesestatementslistannualpay,theamountthecompanyspendsonmandatorybenefits,andtheamoun