Hrm 324 - Total Compensation Plan

Total Compensation Plan

Jason Macias

HRM/ 324

October 12, 2015

Dr. Benson

Total Compensation Plan

Organizations that look to get a competitive advantage, deepen employee/employer relations and stay in compliance with the many federal, local, and state laws know that a good compensation plan can do just that. Compensation plans include both monetary and non-monetary rewards and with the right strategic approach developed by human resource professionals, in collaboration with top executives, can align the total compensation system to meet all the constituent’s needs. This paper will discuss how certain laws can have an effect on an organization that employs 200 people, is a federal contractor, and operates in the biotech industry.

Federal laws that apply to compensation practices are grouped into four categories; 1) Income continuity, safety, and work hours, 2) pay discrimination, 3) accommodating of disabilities and family needs, and 4) prevailing wage laws (Martocchio, 2015).  This organization must obey federal laws to meet compliance. This is important because of the high cost of litigation, fines, and penalties for non-compliance.

Federal Contracts

This organization is a federal contractor and is obligated to follow such laws and regulations as Title VII. In effect, Executive Order 11246 extended Title VII to organizations that hold government contracts worth more than $50,000 per year and employ more than 50 employees (Martocchio, 2015). In addition to meeting Title VII standards, this organization must develop a written affirmative action plan to be in compliance with the law.

Another example of a law effecting total compensation in this organization would be Executive Order 11141 which extends the Age Discrimination in Employment Act to federal contractors as well. This organization must follow ADEA guidelines which prohibit age related discrimination.  There are certain laws and regulations that apply to all organizations and all working individuals, such as protection from discrimination. However, some laws do not apply to all employers. For example, not all employers are required to provide medical leave to their employees. Under the Family and Medical Leave Act of 1993, only employers with 50 or more employees within a 75 mile radius must provide this to employees (Milkovich, Newman, & Gerhart, 2014).

These are just a couple examples of the regulatory environment that the organization must consider. Compliance factors will differ between this organization and a competitor due to the size of the organization, whether they hold a federal contract, the amount of employees employed, and which state and local laws apply. Because this organization is in the biotech industry, more regulatory requirements may be required in comparison to an alternative industry, such as added safety and hazardous waste regulations and requirements.