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Their firms’ benefits packages may indicate policy priorities
President Donald Trump and his initial nominee for labor secretary, Andrew Puzder, are known as tough corporate executives focused on the bottom line. So it's not surprising that many might be skeptical about their commitment to providing their own employees with leading-edge benefits. Prior to Puzder's withdrawal of his nomination, SHRM Online looked at the benefits offered by both men's organizations to see how generous or stingy they are.
Puzder's CKE Restaurants
Puzder, if he had been confirmed, would have left his position as chief executive of CKE Restaurants, the Carpinteria, Calif.-based company behind quick-service restaurants Hardee's, Carl's Jr., Green Burrito and Red Burrito.
CKE's website, the company offers employees a comprehensive benefits package that includes paid vacation and sick time; medical, dental and vision coverage; pet insurance; short- and long-term disability; and life and accidental death and dismemberment insurance. There's also an employee stock purchase plan, a 401(k) and an employee assistance program.
For more information about Donald Trump's workplace policies and how they affect HR professionals, check out the SHRM resources provided below:
The availability of these benefits is based on eligibility requirements, which the company has declined to specify, so it's unclear if they are limited to full-time employees or what probationary period workers must satisfy. Also, while these benefits are available to CKE employees at corporate offices and company-owned restaurants, the benefits provided by franchise-owned and -operated restaurants will vary, as those decisions are made by the restaurants' franchisees.
BrightScope, a San Diego provider of
retirement plan ratings and investment analytics,
gives CKE's 401(k) an overall rating of 50 out of 100, just above its industry peer group average of 45 but still below competitors such as McDonald's (59) and Yum Brands (52).
According to the most recent 5500 report filed with the Department of Labor, CKE made no matching contributions to employees' 401(k)s during 2015, a practice that elicited some complaints at
Glassdoor.com's webpage on CKE's employee benefits.
Also, BrightScope says the plan "carries high-fee investments, has low participation and
generally scores worse than many of its rivals in the notoriously high-turnover, low-benefit fast-food industry," as Reuters reported.
401(k) aside, Puzder has said he views many of CKE's jobs as being about
entering the workforce more than anything else. So it's worth noting that CKE
offers tuition reimbursement for job- and career-related courses to full-time employees, up to a lifetime maximum of $20,000.
[SHRM members-only how-to guide:
How to Design an Employee Benefits Program]
The Trump Organization(s)
It's a bit more difficult to get a picture of President Trump's approach to benefits, since his global business holdings often operate as independent limited liability companies (LLCs), a common practice in the world of commercial real estate. We looked at the Trump Payroll Corp.'s 401(k)/profit sharing plan, which covers nonunion employees at 35 Trump entities including the Mar-a-Lago Club in Palm Beach, Fla., and Trump Las Vegas Sales & Marketing Inc., a real estate agency in Las Vegas.
A defined contribution plan with a profit-sharing component and 401(k) feature, the
Trump Payroll Corp.'s plan has a BrightScope rating of 60, well below its peer group average of 75. Participants can join after a year's employment, and the company will contribute an amount equal to 4.5 percent of an employee's salary if the employee kicks in 6 percent.
matching contributions are made only at the end of the calendar year, Bloomberg notes. That means employees who leave in September, for example, see no benefit for that year. Also, the vesting period for company contributions is six years, the longest time period allowed by U.S. law.
The 401(k) vesting period for company contributions is six years, the longest time period allowed by law.
Trump is said to highly value personal loyalty, and in many ways the Trump Payroll Corp.'s 401(k) reflects that: The longer an employee's tenure, the better he or she does with the plan.
Among other benefits, the Trump Payroll Corp.
set up a group long-term care insurance program in 2004 through First Unum Life Insurance Co., according to the industry website LifeHealthPro.
In recent news, in December, after more than a year of refusing to negotiate, the Trump International Hotel Las Vegas
signed a four-year contract with Culinary Workers Union Local 226 and Bartenders Union Local 165. Under the pact, full-time workers will receive annual raises, a pension, family health care and other benefits.
Although the contract's terms weren't disclosed, in March Paul Fronstin, director of the Health Research and Education Program at the Employee Benefit Research Institute in Washington, D.C.,
reviewed Trump International Hotel Las Vegas's health benefits at Salon's request. Noting that the premiums were below average, Fronstin said, "Some might consider this a Cadillac plan."
At the same time, he agreed with the culinary union's contention that its plan was superior. Under the union's provisions, all employees—including part-time workers—qualified for a health plan that imposed no premiums. And Fronstin saw no deductibles and lower co-payments in the union plan as well. So whichever health plan is included in the contract, it seems that at least Trump's Las Vegas hotel full-time employees did reasonably well. (A spokeswoman for Local 226 declined to be interviewed.)
Whether or not employees at other Trump properties benefit from similar plans is unclear, but it's worth noting that in strong union areas like Las Vegas, even nonunion employers typically offer competitive benefits.
In September, then-candidate Trump
unveiled a plan to guarantee six weeks of paid maternity leave for new mothers after childbirth. Deirdre Rosen, senior vice president of HR at the Trump Organization,
told the Huffington Post that the company offers "an industry-leading eight-week paid-parental-leave policy" but in a follow-up statement clarified that "the policies and practices allowing employees to enjoy a healthy work/life balance vary from property to property" and that "we take an individualized approach to helping employees manage family and work responsibilities."
CNN report said that "a spokeswoman for the Trump Organization declined to explain which Trump Organization employees are not eligible for the eight-week paid parental leave." At many companies, paid parental leave is limited to salaried employees, for instance.
According to the Society for Human Resource Management's (SHRM's)
Employee Benefits survey report, based on a poll of SHRM members conducted early last year, slightly more than one-quarter of organizations (26 percent) offered paid parental leave to some or all employees beyond what is covered by short-term disability or state law.
As the Huffington Post article noted,
2015 survey data from the Labor Department showed that 87 percent of private-sector workers said they are not eligible to receive paid family leave.
What Does It Mean?
Given all that, are there any conclusions that can be drawn about how the new administration will approach the regulation of employee benefits? The answer, according to benefits experts, is "probably, in a general way."
Puzder "is bringing his experience with him," said a vice president of total rewards who asked not to be identified but has experience in the service, retail and restaurant sectors. Fast food, she observed, "is a not-very-unionized industry that relies a lot on part-timers."
In general, restaurants "aren't part of the usual benefits world," said a former benefits consultant who focused on small to midsize businesses in the mid-Atlantic region, who also asked not to be identified. "The relative richness of a benefits package will give you an indication of how an employer sees [its] employees," he noted. But, he added, there's a related question to consider as well: "Does how you operate in business translate to policymaking? I'd say yes. A guy who's paternalistic to his employees isn't going to just turn around."
Of Trump, "his company's benefits menu could shape how he thinks of insurance, retirement programs and employee benefits once he's in office," wrote Allison Bell, LifeHealthPro's health insurance channel editor.
The CEO of a company, however, may make decisions based on labor-market considerations—to attract and retain needed talent—that differ from the policies a president or labor secretary might want to impose on all businesses across the nation. Future developments will reveal the extent to which Trump and Puzder see their own businesses' benefits as models for government policy.
Mark Feffer is a freelance business writer based in Philadelphia.
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