Question

This week we are reviewing Wage Decisions in Total Compensation and I need assistance with the below:

Identify and discuss key employment laws pertinent to compensation practice

Discuss the role of labor unions in setting compensation

Answer 1

Identify and discuss key employment laws pertinent to compensation practice.

The key employment laws pertinent to compensation practice come into being during the years to great depression in 1930s , however during last three decades the aspect of social justice has also played a significant role in framing the current laws, the only prevailing wages laws deal with how the wages and benefits are granted and distributed but is silent on the amount of the wages, the key laws are as under:

1. Fair Labor Standards Act (FLSA) this law serves as foundation of the wages system the federal minimum wage is set by this act , which as per last amendment in 2009 was set at $ 7.25, this act also deal with the standards of overtime and record keeping as well.

2.Prevailing Wages this law covers the employers as a party to federal contracts pay prevailing acts and regulates what the employers can pay to the immigrants.

3.Pay Discrimination the issue was addressed by Equal Pay Act of 1963 which was passed as an amendment to FLSA it interprets that equal pay be paid for jobs having comparable worth for the organization and call for sustainability equality for jobs with comparable value to the organization.

Equal Employment Opportunity is covered under various laws with objective that no discrimination shall be allowed on bases on of race, color, gender, age and nationality by the empoyers, employment agencies and the labor unions.Affarmitive Action (AA) plan is put is place to correct the past discrimination.

4.Tax Laws as per the US Internal Revenue Code(IRC) various benefits are not taxed these include health and life insurance benefits

5. Benefits these include :

Social Security

Unemployment Insurance

Workers Compensation.

Other acts include

Patient Protection and Affordable Care Act (PPACA or ACA for short)

The Family and Medical Leave Act (FMLA)

The Consolidated Omnibus Budget Reconciliation Act (COBRA)

The Health Insurance Portability and Accountability Act (HIPAA)

6. Employee Retirement Income Security Act(ERISA)

This act covers that the pension if paid by the private employer it should be as per standards it also states that the tax treatment shall be as per employer contribution and empoyees deferral of income.

Discuss the role of labor unions in setting compensation

According to Webbs, a trade union is a continuous association of wage earners for the purpose of maintaining and improving the conditions of their working lives.

The trade unions play an important role in setting the compensation through collective bargaining meaning that the process through which the empoyees and employers reach an agreement as regards working hours, benefits and most important the compensation.A collective bargaining process generally consists of four types of activities- distributive bargaining, integrative bargaining, attitudinal restructuring and intra-organizational bargaining.

The process of collective bargaining includes the following 5 steps:

1. Prepare: this step involves the creation of teams from both sides i.e. the employees and employers who have expertise in the respective areas.

2.Discuss: positive discussing take place to reach a mutually beneficial agreement in complete trust and confidence.

3.Propose: in this step both parties present their point of view to each other it is a type of brain storming session.

4.Bargain: Negotiations take place in this step to reach a conclusion

5.Settlement: when both parties feel that it is ideal condition which is beneficial to both parties the settlement or agreement takes place for future course of action.

Importance of collective bargaining

It develops a sense of self respect and responsibility among the employees.

It increases their bargaining capacity as a group.

It restricts management's freedom for arbitrary action against the employees.

Collective bargaining system strengthens the trade unions movement.

The employees are motivated

It is easier to address the group rather then each individual.

It tends to generate job security among the employees

Each individual feels the he has been heard

It leads to avoidance of conflicts between the employer and employees.

Hence the role and importance of trade unions in setting compensation and other relevant factors like working conditions, benefits etc.