Discuss the impact that government regulations and legislation plays in matters of employee benefits

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kipling2448 | (Level 3) Educator Emeritus

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While it could be assumed that, within a democratic political system characterized by free markets and competition, most privately-owned companies would find it in their interest to provide reasonable and fair employee benefits packages for the purpose of recruiting and retaining workers, the realities have proven quite different.  Indeed, the history of the American labor movement would seem to belie such an assumption.  The unfortunate fact is that, absent the establishment of unions and government intervention, many businesses would fail to provide both fair compensatory packages and an adequately safe environment in which to work.  Consequently, a long list of employee benefit and anti-discriminatory laws have been passed by Congress over many decades.  Below is a link to the U.S. Department of Labor website page listing many of those laws.  That department is responsible for administering and enforcing these particular statutes.

Over the years, as members of Congress are exposed, usually through the efforts of social and labor activists, to shortfalls in worker protections, new laws have been passed designed to address specific areas of employee welfare.  One of the most important, and controversial, of these laws is the Fair Labor Standards Act (FLSA) of 1938, which established the minimum wage, the 40-hour workweek as the standard, the requirement for additional compensation for overtime (applicable to some but not all businesses), and restrictions on child labor.  The reason the FLSA remains controversial today is because of the disagreement between liberals and conservatives regarding the government’s proper role in private enterprise, particularly in requiring employers to pay employees no less than a specified hourly wage.  Similarly, the Family and Medical Leave Act (FMLA) of 1993 requires many employers to provide 12 weeks of unpaid leave for employees to deal with the birth of a new child or to care for sick relatives.  The Employee Retirement Income Security Act (ERISA) of 1974 mandates that companies that provide retirement and health benefit plans to meet certain minimum standards.  In short, absent government involvement, such employee benefits would likely not exist except in rare circumstances. 

Whether and to what extent the federal government should dictate to privately-owned businesses the nature and specifics of the benefits packages those companies provide is a matter of debate.  Such dictates, however, are common practice among the liberal democracies to which the United States belongs, and many foreign governments go well beyond anything currently mandated by the U.S. Government.

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