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Minimum expenses employer incurs on an employee in New York

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  • Minimum expenses employer incurs on an employee in New York

    Hi,

    This seems like a forum of real experts and I'm a novice here so please help out!

    I was having a discussion with my employer, who is based in new york city having less than 50 employees, and he threw out a figure: "we incur a of 15% mandatory legal expenses on each employee, not including any benefits like health insurance, holidays / leave.". And that was his reason for not giving me a small raise.

    (So, on every $100 he pays me, he incurs an expense of $15.)

    First of all, does that sound right? I was bit shocked although I don't have any data to justify my shock.

    So I researched a bit and landed on this BLS link: http://www.bls.gov/ro2/ececne.htm (Employer Costs for Employee Compensation for the Regions – December 2012)

    Table 1 for Mid-Atlantic states (NY included) has a section for "Legally required benefits" which total to 8.2%
    This includes Social Security, Medicare, Federal unemployment insurance, State unemployment insurance, Workers' compensation.

    So, how do I reconcile the figure he gave me and the this data? What other expenses am I not counting for employer based in New York City with less than 50 employees?

    Important Note: I want to exclude non-legal expenses like rent, power, admin expenses for this discussion. Only legal expenses owed to the Federal, State and City governments / agencies.

    Thanks a lot for reading and any help would be super-appreciated!
    w
    Last edited by wideeyedwanderer; 04-07-2013, 06:13 AM.

  • #2
    NY employers also pay mandatory disability insurance.

    A couple of things you need to understand - charts like that show aggregate numbers, which may or may not be 100% accurate for any given employer. The AVERAGE may be 8% but in order to have an average of 8, some employers are going to have higher numbers and some are going to have lower.

    Additionally, under no law is your employer required to give you a raise, or a reason why he won't. The ONLY time an employer is required by law to give a raise is if minimum wage is raised by the appropriate legislative body and you are earning less than the new minimum. He is not obligated to defend his decision; all he has to say is, No.

    So even if you were able to prove conclusively that his numbers were wrong, it would not change anything if you were looking for a way to force the employer to change his mind.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      Originally posted by cbg View Post
      NY employers also pay mandatory disability insurance.
      Good point. Let's assume Short-term and Long-term disability insurance (again according the the BLS chart) could add another 0.5% - 1%, bringing the total to at most 9.2%.

      Originally posted by cbg View Post
      A couple of things you need to understand - charts like that show aggregate numbers, which may or may not be 100% accurate for any given employer. The AVERAGE may be 8% but in order to have an average of 8, some employers are going to have higher numbers and some are going to have lower.
      Sure, is there a standard deviation in legal expenses? And what ranges do most employers fall in? So, lets consider the average is ~9% (including Disability insurance).

      Would most employers (ignoring the extreme outliers), fall in the -3% / +3% range? That is, 6% (lowest) and 12% (highest)?

      What does the actual range look like?

      Originally posted by cbg View Post
      Additionally, under no law is your employer required to give you a raise, or a reason why he won't. The ONLY time an employer is required by law to give a raise is if minimum wage is raised by the appropriate legislative body and you are earning less than the new minimum. He is not obligated to defend his decision; all he has to say is, No.

      So even if you were able to prove conclusively that his numbers were wrong, it would not change anything if you were looking for a way to force the employer to change his mind.
      Fair enough and I understand that.
      Last edited by wideeyedwanderer; 04-07-2013, 07:13 AM.

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      • #4
        It doesn't matter what the #'s say - your employer still does not need to give you a raise unless the min. wage increases & you would be below it. (or unless you have a binding employment contract requiring raises ......)
        Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

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        • #5
          Originally posted by Betty3 View Post
          It doesn't matter what the #'s say - your employer still does not need to give you a raise unless the min. wage increases & you would be below it. (or unless you have a binding employment contract requiring raises ......)
          I understand that and so let me clarify my purpose for posting this -- my purpose for asking this is to understand facts about these numbers. Whether I can act on those facts or not is immaterial to me at this point.

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          • #6
            He might also be adding in (1) the cost of mandatory workers comp insurance.....that depends on industry and job type... also depends on the company's experience rating..... and (2) uenployment insurance which also has an experience rating. Those ratings can vary considerably....

            I can tell you we average 11-13% for our different companies in TX where we don't have disability...so 15% does not sound unreasonable prior to any voluntary employer paid benefits.
            Last edited by hr for me; 04-07-2013, 11:24 AM.

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