Question: Suppose you are the human resource manager for a cellular phone company with600employees. Top management has asked you to implement three additional fringe benefits that

Suppose you are the human resource manager for a cellular phone company with600employees. Top management has asked you to implement three additional fringe benefits that were negotiated with employee representatives and agreed upon by a majority of the employees. These include group term life insurance, a group legal services plan, and a wellness center.

The life insurance is estimated to cost $520per employee per quarter. The legal plan will cost $416semiannually per employee. The company will contribute 40% to the life insurance premium and 75% to the cost of the legal services plan. The employees will pay the balance through payroll deductions from their biweekly paychecks. In addition, they will be charged1

of their gross earnings per paycheck for maintaining the wellness center. The company will pay the initial cost of $800,000to build the center. This expense will be spread over 5 years.

(a)

What total amount should be deductedper paycheckfor these new fringe benefits for an employee earning $62,400per year?

(b)

What is the totalannualcost of the new fringe benefits to the company?

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