Unexpected Consequences of Tough Economic Times

Lack of internships, elimination of “feel good” benefits, mandatory wellness programs…these are some of the unexpected consequences of the current economic times. The Wall Street Journal reports today that support for adoptive parents (surprisingly one of the most popular feel good benefits prior to the recession) appears to be the first to fall under the ax, along with child and elder care referral services, matching of charitable contributions, and academic scholarships. Employers report that they are avoiding lay-offs by cutting back on these types of benefits.

Well-paying summer jobs and high-profile internships for college and graduate school students are disappearing as well. The National Association of Colleges and Employers reports that internships available to college students have fallen by 21%.  Not only are employers and government agencies  scaling back on summer programs, parents are not as willing or able to underwrite them.

And what about healthcare costs? Employers are implementing mandatory wellness programs that require employees to get annual physicals and regular screenings. In many cases, an employees’ failure to abide by the program results in the loss of insurance.  One survey found that 45% of companies are planning on or considering penalties for employees who do not participate in wellness activities. Not surprisingly, organized labor opposes mandatory programs and, as we pointed out previously, wellness programs and health assessments can be problematic under the disability and discimination laws.

Whether eliminating programs or implementing new ones, employers are well-served by considering the legal ramifications along with HR issues like employee morale.