The workplace today has changed from previous time periods. Today there are at least four generations, which work together in the workforce. There is the silent generation, where almost all of them are retired. The baby boomer generation are now one of the oldest generation in the workforce. Generation X is in their best days to climb up the career ladder, whereas generation Y is entering the job market. The coincidence of all these generations can create issues in the workforce, which have to be solved.
Currently the workforce is shrinking, because the silent generation and the baby boomer generation is almost going to retire. For every two workers who exits the market, only one worker is entering the market. This fact will create a leadership …show more content…
Therefore employers don’t have to pay for FICA or workers compensation premiums on those dollars. This amount can be up to 20 percent of every dollar, which is passed through the plan.

2.2.2 Benefits for employees
Employees, who are participating in a Section 125 benefit plan, reduces an employee’s taxable salary and increases the amount on their checking account. There they get a higher deduction on dependent care expenses than traditional tax credit offers at the end of year. The impact on employees from increasing insurance is less, like premiums, co-pays or deductibles.
The simplest way for an employer to keep cost down, is to lower offered benefit level. This saves money for the employers on their premiums. In opposition to the employees are faced with higher co-pays, deductibles and prescription amounts. With using an FSA, the increased amounts can be covered, because they can set aside money.

A cafeteria style benefit plan is therefore a benefit plan, which allows employees to choose benefits on their own, which ones suits best to them and that these benefits are provided by employers and received by employees on a pretax basis. Both can save costs, because they don’t have to pay for …show more content…
Employees pay their share of health care insurance premiums, with pretax dollars. The taxable income is reduced by the amount contributed, and therefore employees withhold less dollars which are taxable. Employees are holding less money, which means, that they receive a larger net check, due to the tax reduction.

2.5 Federal Insurance Contributions Act (FICA)
The FICA is a law, which requires a deduction from paychecks and income that goes toward the Social Security program and Medicare. Employees as well as employers are responsible for sharing the FICA payments.
There is a maximum amount that can be allocated to the Social Security program, on the other side, there is no maximum amount for Medicare. If the maximum amount of the Social Security program is reached, further FICA payments will not increase that amount, instead that amount goes to the Medicare program. The higher the income of a contributor, the higher the payments on the FICA.

2.6 401(k)
A 401(k) plan is provided by employers, for appropriate employees, to make salary reductions on a pretax basis. Usually there is a ceiling on the plan, or regulations, which limits the percentage of salary deferral contributions. There are also restrictions for the employee, on how and when they can withdraw the balance. Taxes are not paid until the money is withdrawn from their