“Cafeteria” Employee Benefits: Opposition
Employers should continue to grant extended benefits coverage to parents and decline to transition to “cafeteria” plans that set a single dollar amount for each employee. It to the advantage of each company, its employees, and society as a whole for employers to provide such much-needed benefits as paid maternity leave, health insurance, and day care facilities to those employees who need them.
The employee benefits that a business provides can affect the new employees it attracts, and the performance, retention, and happiness of current employees. However, a company’s choice to offer certain benefits affects more than simply the bottom line. Making decisions that benefit society can be one more way in which a business fulfills its role as an important part of the community it resides in. Improvements in that society, in turn, benefit the corporation. By supporting the roles of parents in our society, a company helps create a supportive, productive environment for its employees with children and helps ensure the next generation is healthier and happier.
A. Parental Benefits Packages
1. Health Care for Children
In the United States, employers are the primary source for much-needed health care. Therefore, a parent’s employer is often the sole source of coverage for those under 18. Some States do provide plans to children unable to get health coverage, especially those raised in low-income families. However, a change in the current system might well exclude children who do not qualify under low-income plans, and would otherwise overburden a State’s limited resources.
Providing health insurance to children also impacts the company more directly by reducing employee absenteeism. Health coverage encourages diagnostic and preventative care, reducing the amount of time a parent has to miss work to care for a sick child. Therefore, providing not only insurance but a comprehensive health plan is in the best interests of the company and society.
2. Maternity/Paternity Leave
Providing extended paid maternity and paternity leave also benefits both the company and society. An extended maternity leave allows a parent to fully care for a child early on, and allows the mother to recover fully from giving birth. It also allows the mother time to begin breast feeding her child, a process which may take some time and effort to begin properly. Thusly, maternity leave may prevent future health problems.
Since the weeks after the birth of a child are an important part of his or her development, extensive parental leave also offers a psychological benefit to the child. This yet again provides an advantage for the company by reducing the chances that a parent will be distracted or miss work when returning after the birth of a child.
3. Day Care
Lastly, providing day care has repercussions on both the company and society. On-site day care has the benefit of being a more efficient means of caring for a child than home care. The child is in a social environment, which may help during his or her development. Furthermore, the parent is given more opportunities to interact with his or her child, during the commute and on breaks. If the child becomes distressed or upset, it is easy for the parent to visit his or her child quickly, and comfort her, instead of having to leave the workplace.
The benefits to society are also present in the simple fact that mothers are typically the primary caregivers. The effect of less support for parents inevitably enacts more of an impact on women than on men. Withdrawing maternity leave and childcare benefits will often dissuade women from returning to the workplace after having a child. By offering women a meaningful choice, we can help ensure that the next generation is raised by women who are happier and more fulfilled.
Having such benefits across the board will result in more women in the workplace, more women in positions of authority and leadership, and more female mentors for the next generation of working women. Providing a ‘critical mass’ of female executives and other employees will help dissipate the ‘boy’s club’ mentality of some companies that can act as a barrier to women in the workforce. The few women that currently occupy these positions do not provide this critical mass; their presence often does little to change the social tenor of the boardroom.
4. Other Aspects
The benefits to businesses in small communities are amplified by the effect these policies will have to future generations of workers. Children that grow up healthier and happier are more likely to excel in school and reach their true potential. When these children enter the workforce, they will ensure that the company is drawing future employees from a better pool of applicants.
Additionally, many childless workers will someday be parents. In this sense, the holistic effect of the parental packages will benefit them. Co-workers who currently have children will continue to contribute to the packages after their children leave home, and will help support the children of these employees at a future time. In the long-term, many employees will benefit from a scheme that focuses on families and the welfare of our nations’ children.
B. The Cafeteria Plan.1
Some companies, such as Xerox, have shifted from a benefits plan modeled after need to one that emphasizes equality. They strive to make certain the benefits package each employee receives is of equal monetary value. Although the idea of such plans is appealing, one must not assume that parents will receive the same benefits under this plan that they would under a traditional benefits package.
In order to provide all the benefits mentioned above, a company would have to make a very large monetary amount available to each employee to spend on benefits. It is unlikely that a company will do this, as the overall expenditure would be much greater. For every dollar spent on child care and other parental benefits, the company would have to earmark a dollar to benefits for childless workers. The overall cost of the benefits to the company would be significantly increased. In all likelihood, a company would not agree to such a large output, but would instead set a dollar value that would not allow a parent all the benefits he or she needs.
The alternative is a costly benefits plan that exacts its toll on monetary compensation or the interests of the shareholders. While these results may seem like a reasonable sacrifice to make to take proper care of employees, one has to remember that the excess money is not being spent on needed health insurance, but instead on the needs of childless workers that were previously uncovered. Such benefits, such as educational and housing expenses, would not justify the costs to all employees or the company itself.
While many childless workers may spend this money on eldercare, it is important to note that such benefits are important to parents as well. A company will either have to deny eldercare benefits to workers with children, penalizing their elderly parents for the existence of their own grandchildren, or provide this to all. In the latter scenario, the benefit would therefore not be part of the additional benefits given to the childless, but part of the basic benefits. In that case, the difference between the benefits packages will again result in the excess amount being earmarked for housing and education. It is also worth noting that some parents may instead choose such benefits, at a cost to their children that will also be paid by society.
Therefore, it is in the interest society and of each business’ bottom line that they continue providing extended benefits packages to parents. It will result in the retention and promotion of more female employees, the ability to draw potential employees from a larger applicant pool, and more productive workers. It will also help the future of our nation by providing future generations with health and psychological benefits. This will be one of many ways in which businesses realize their responsibility to the community as a whole.
1 It is important to note that these are distinct from the cafeteria plans mentioned in Section 125 of the US Tax code, which refer to employees using their pre-tax salary to buy their own benefits. Here we are referring only to benefits paid for directly by the company.
“Cafeteria” Employee Benefits: Opposition