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Average yearly wage $33,750. Average hourly wage $ 18. Dollar value of yearly benefits $13,608.93 Total compensation (wages plus benefits) $47,358.93 Daily average number of
Average yearly wage $33,750. Average hourly wage $ 18. Dollar value of yearly benefits $13,608.93 Total compensation (wages plus benefits) $47,358.93 Daily average number of hours paid $ 7.50 Benefits Average Employer/Employee Cost per Year 1. Legally required benefits $ 3,238.93 a. Canada Pension Plan $ 1,648.63 b. Employment Insurance $ 746.55 c. Workers Compensation $ 843.75 2. Pension, group insurance, disability $ 5,197.50 a. Pension plan contributions (7% of base) $ 2,362.50 b. Group insurance (life health and dental) $ 2,700.00 c. Short-term disability $ 85.00 d. Long-term disability $ 50.00 3. Payments for time not worked $ 3,945.00 a. Paid vacation and statutory holidays (20 days average) $ 2,430.00 b. Paid sick days (5 days average) $ 270.00 c. Paid rest periods, lunch periods, etc. $ 1,125.00 d. Payments for jury duty, leave for bereavement, or other personal reasons $ 120.00 4. Other items $ 1,227.50 a. Contributions to employee savings plan $ 1,012.50 b. Tuition reimbursement plan (50%) $ 80.00 c. EAP $ 100.00 d. Discounts on goods and services purchased from company by employees $ 35.00 Total $14,135.41 EXHIBIT 9.10 Benefit Preferences (gathered by survey) Note: 0 = unimportant, 100 = extremely important Benefit Type Importance to Workers Healthcare plan 86 Holidays 79 Paid vacation 82 Life insurance 82 Long-term disability 72 Short-term disability 69 Paid rest periods, lunch breaks, etc. 55 Dental plan 51 Profit sharing 21 Contributions to savings plan 15 Discount on goods 5 Fair treatment in administration 100 EXHIBIT 9.11 Two Possible Packages for Cutting Benefit Costs Option 1 Implement an annual $25.00 deductible for the healthcare and dental plans ($25.00 covers both) Require employees to contribute 3.5% (of base pay) to the pension plan Require a one year probationary period before employees are eligible for discounts on goods and contributions to employee savings plan (see exhibit 9.12) Option 2 Apply the cost-saving strategy to improve claims processing for group insurance, short-term disability and long-term disability (see Exhibit 9.12) Reduce paid sick days by two days per year Eliminate paid rest periods EXHIBIT 9.12 Analysis of Cost Implications for Different Cost-Cutting Strategies: Lightning Industries. Cost-Saving Strategy Savings as % of Benefit-Type Cost Require probationary period before eligible (one year): Discount on goods and services 10% Contributions to employee savings plan 10% Improved claims processing: Group insurance 10% Short-term disability 5% Long-term disability 3% calculate Cost out each of the two options, using the information provided in Exhibit 9.9 and Exhibit 9.12
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