The definition, creation, and revision of compensation laws takes place to make sure that there is a nondiscriminatory work environment for employees. In other words, these tenets were created with the objective of safeguarding and protecting the rights of workers within various institutions. With that in mind, it is essential for a company to have the administrative capabilities and strategies that would see the creation of total compensation based on these laws and regulations. The purpose of this paper is to provide examples of rules and regulations governing the calculation of total compensation. It will also analyze the similarities and differences in total compensation between the company in biotech and another in a different industry.
Total compensation provides a bigger picture of the way employers decide to remunerate or compensate their employees for the work they (workers) perform in a company (Martocchio, 2009). A package of total compensation contains many aspects that the managers should take into consideration and takes the form of both monetary (extrinsic benefits) and non-monetary (intrinsic benefits). Extrinsic benefits mean that the company has to pay for the jobs done based on the legal system of the country or the state. Non-monetary compensation represents the quality of work that makes the company able to retain its employees ( Frye, 2004) . Therefore, employers can use compensation plans to attain and maintain quality employees.
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On the contrary, this has not always been the case. For a long period in history, employers made their workers to perform jobs as hard as they could for little pay and high disregard for their well-being. This is especially true for the beginning of the Industrial Revolution where working conditions were unfavorable for human progress and survival. The situation had to change as the government had to chip in to protect its citizens. Hence, the creation of laws and regulations governing compensation came to being (Martocchio, 2009).
One of the laws that govern total compensation is the Fair Labor Standards Act (1938). Given the client company is a federal contractor, it has to comply with the FLSA as it is a federal law. This law provides the authority for the US Department of Labor to set requirements for minimum wage an employee can get, the amount of overtime paid, the keeping of records, and the standards for how the young people can be employed. This law is considered one of the most applied in all the fields and industries as it gives the general requirement for every employer to follow.
Secondly, the Equal Pay Act (1963) also affects the total compensation plans for the client company. This law is considered a continuation or an amendment of the FLSA. The EPA was established to abolish wage differences based on gender. It was aimed at reducing the wage discrimination that was present in the workplace based on sex in the same organization for jobs needing substantially equal skill, responsibility, and effort or under similar conditions. It ensures that men and women working the same roles in the same workplace receives equal pay. Initially, the EPA did not restrict the seniority systems, pay for performance structures, and merit ones, but the Education Amendments of 1972 took care of this. The client company has to ensure that the pay in the workplace for similar jobs are equally remunerated regardless of the gender.
On the same note as the EPA, the Civil Rights Act of 1964 went ahead to abolish the discrimination in the workplace based on race, color, sex, religion, or national origin. The law ensured that everyone got similar treatment during the hiring process, review for employees, working conditions, and opportunities for promotion.
The other law that applies to the client company is the Affordable Care Act (2010). The ACA offers provisions for how employers can provide health insurance to their workers and what they need to consider. This law has several parts whose applicability to the companies depend on the size and structure of the workforce, that is either large or small. The client employer has 200 employees. This means that the company is liable to use the applicable large employers part and file annual return detailing a statement to each full-time employee. They have to declare whether they offered health insurance and if so, what type. As stated before, a company can compensate their employees either by intrinsic or extrinsic means. Insurance benefits fall in the former category and thus the client organization, having more than 50 employees, has to consider in preparing plans for the total compensation.
Biotech industry workers share some universal benefits with others in different sectors. This is dictated by the various labor laws that are under the federal government. For example, the Equal Pay Act applies to the workers in the biotechnology companies as it is in other external organizations. The conditions within these workplaces should be similar for both genders, regardless of the industry. A second example is seen in the demands for retirement benefits under the Retirement Income Security Act (1974). All workers are entitled to pension plans in all industries and sectors.
There is no much difference between the biotech companies and external ones in terms of compensation plans. However, this organization qualifies for Family and Medical Leave Act of 1993 because it has more than 50 employees. This means employees are given up to 12 weeks of unpaid leave to tend to some issues of the family. This difference only works when comparing it to other companies of less than 50 employees. The employees of biotech companies are also exposed to a hazardous environment that could lead to injuries or illnesses. This means that this organization has to factor that and pay insurance premiums for its workers.
Part II
Total compensation is the total value that a company gives to an employee in exchange for work done and human resource. It includes all the monetary and non-monetary benefits that a person can get from the employer. Some of the elements present in total compensation are basic salary, benefits, perks, on-site amenities, and bonuses ( Frye, 2004) . Often, the total compensation indicates that a worker is making twice or three times the base salary. However, in most cases, the company does not disclose the amount of additional compensation that one receives. This concealment always leaves the employees feeling underpaid for their services and time. On the minimum, there are universal benefits that are included in most total compensation plans. They include retirement benefits, performance bonuses, and health insurance. The exceptional benefits that mostly go unnoticed include casual dress code, flexible routine, prizes, and gym memberships. Their presence may not be felt because they do not have a monetary value attached, but total compensation includes saving time and being stress-free.
Total compensation is an essential factor which prospective team members can use to make decisions of joining an organization. It is also an important one in ensuring that the current employees feel appreciate and comfortable with their situations. Due to its importance, companies must make sure that they use the concept of total compensation in their strategies to be competitive in securing the top tier talent ( Frye, 2004) . One of the ways this can happen is having a comprehensive compensation plan that is logical, predictable, and easy to understand. The company should communicate with its employees on the program to make them as knowledgeable as possible when making the decision. The other means is to offer career development opportunities and state it in the recruitment process. This includes training and coaching the employees to attain higher skills and capabilities. When a company does this, it grows itself together with the workers. The company should avoid non-disclosure and communicate its strategies with the employees.
References
Martocchio, J. (2009). Strategic Compensation: A Human Resource Management Approach . New York: Pearson Prentice Hall
Frye, M. (2004). Equity-based compensation for employees: firm performance and determinants. Journal of Financial Research, 27 (1), 31-54.
