Educational assistance benefits are employee benefits that allow workers to participate in educational programs for free or at a reduced cost. These benefits are administered through education assistance programs. Education assistance programs are used by corporations to recruit, retain, and retrain employees and to increase goodwill with former employees and the public. [1] They also serve as a corporate tax break.
Corporations with these programs include Walmart (Live Better U), Target Corporation, Amazon (Career Choice), McDonald's (Archways to Opportunity) and Kroger (Feed Your Future). [2] The US Department of Defense also has a program called DOD Tuition Assistance that provides troops with funds for higher education and the US Department of Veterans Affairs has the Forever GI Bill for eligible servicemembers, veterans, and select family members. Some corporations employ private companies, such as Bright Horizons and Guild Education, to manage tuition payments to specific colleges and other education providers. [3] [4] According to Wharton College professor Peter Cappelli, a small percentage of workers use educational assistance benefits, but the programs "do reduce employee turnover and help businesses identify their most productive workers." [5] [6]
US history has seen a rise and fall of benefits for working people. In 1875, the American Express Railroad Company established the first private pension plan in the United States. Other large businesses soon followed. [7]
During the Great Depression, the US government's New Deal provided jobs and job skills training. [8]
The post World War II GI Bill also provided opportunities for those who served. Following World War II employer health plans rose to 70 percent of all employers by the 1960s. [9]
In the 1980s, US corporations began reducing training and other benefits for employees. The prevalence of employee education benefits programs was further reduced during the Great Recession, from 61 percent of companies surveyed in 2008 to 51 percent in 2018. [10]
In 2021, a refound popularity among large employers has been met with skepticism. According to Peter Cappelli, director of Wharton’s Center for Human Resources, “They’re doing this because it sounds great and it’s cheap – almost no one can use them, they are all online/cut rate degree programs." [11]
Between one and ten percent of all employees typically use employee education benefits. Because many employees live paycheck to paycheck, and employers often reimburse workers instead of paying up front, about half of all money designated for these programs goes unused. [12]
Employers may deduct all that they pay for the employee's educational costs as a business expense. [13]
The US Internal Revenue Service allows workers to deduct $5,250 in employee education benefits from taxable income. [14]
Amazon's Career Choice program pre-pays 95 percent of tuition for courses in high-demand fields. The corporation has said it will spend more than $700 million to upskill 100,000 of their U.S. employees for in-demand jobs such as aircraft mechanics, computer-aided design, machine tool technologies, medical lab technologies and nursing. At the time of its inception in 2012, critics called it a "PR stunt." [15] By 2020, 25,000 associates from 14 countries had participated. [16]
DOD Tuition Assistance is a US Department of Defense (DOD) program that funds higher education programming for US military servicemembers. Currently, DOD TA funds servicemember's college tuition and fees, not to exceed $250 per semester credit hour or $166 per quarter credit hour and not to exceed $4,500 per fiscal year, Oct. 1 through Sept. 30. In 2019, DOD spent more than $492 million on the program that year and about 220,000 troops used the benefits. [17]
The GI Bill is the largest employee benefits program in the US. The program was originally for veterans of World War II. [18] The latest iteration of the GI Bill is the Forever GI Bill.
The FedEx program LiFE Inspired by FedEx (LiFE) is partnering with University of Memphis Global to offer educational benefits and boost employee retention. [19]
As part of the company's employee growth effort, Kroger supports full-time and part-time workers in pursuing GEDs, MBAs or professional certifications [20]
McDonald's employees and the employees of participating independent franchises offer employee benefits to improve English language skills, earn a high school diploma, work toward a college degree, and get counseling about education and career plans. The corporation has spent more than $100 million on the program over the past four years. Independent franchises are charged for participating in the program. [21] McDonalds' education partners are Colorado Technical University, Excelsior College, and DePaul University. [22]
Starbucks has offered 100 percent tuition coverage discounts for Arizona State University since 2014. The goal of the program was to graduate 25,000 workers by 2025.By 2019, about 3000 employees had gotten degrees. According to the company "participants stay at Starbucks 50 percent longer and are promoted at three times the rate of U.S. retail employees who don't use the program." [23]
In August 2021 Target Corporation said it was investing $200 million over the next four years, offering workers “'debt-free undergraduate degrees, certificates, certifications, free textbooks and more with no out-of-pocket costs' in 250 business-aligned programs from more than 40 schools, colleges and universities." [24] The cost to Target is approximately $147 per worker per year. [25]
In 2021, Walmart reported that they would be offering education benefits to 1.6 million workers without any tuition payout by workers. Walmart claimed to be committing $1 billion over 5 years for this effort.[ citation needed ] According to Walmart, program participants are "two times more likely to get promoted, and they retain at a significantly higher rate."[ citation needed ] In 2020, according to Walmart, "about 15,000 of 950,000 eligible employees use the $1-a-day tuition benefit." [26] In 2021, a Walmart official stated that 52,000 workers had participated and 8,000 had earned a degree or certificate. [27] The Lumina Foundation reported that Walmart employee participation had increased to 30,000 active in the program. In three years the LBU program had the following results: 336 earned bachelor’s degrees, 50 earned associate degrees, and 1,805 earned certificates. [28]
Waste Management's "Your Tomorrow" program provides access to more than 170 fully-funded programs. In 2022, Your Tomorrow will include employees' children and spouses. [29]
Some corporations offer tuition discounts to their employees with schools they partner with.
Bright Horizons provides workforce education (tuition discounts from about 220 schools) and student loan support for employees from several companies. Its clients include CVS Health, Home Depot, Children's Health, Bank of America, and Allstate Insurance. [30] [31]
Guild works for corporate clients, including Walmart, Target, Lowe's, Chipotle, Taco Bell, Disney and Discover Financial. [32] Its education partners include Penn Foster High School, University of Arizona, Colorado State University online, Purdue University Global (formerly Kaplan University), University of Denver University College, Johnson and Wales University Online, Brandman University, Bellevue University, Oregon State e-university, Rio Salado College and Spelman College. According to Guild Education CEO Rachel Romer Carlson "the average worker who enrolls in education assistance is about 32, a woman of color and often a mom." [33]
Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores in the United States, headquartered in Bentonville, Arkansas. The company was founded by brothers Sam and James "Bud" Walton in nearby Rogers, Arkansas in 1962 and incorporated under Delaware General Corporation Law on October 31, 1969. It also owns and operates Sam's Club retail warehouses.
The G.I. Bill, formally known as the Servicemen's Readjustment Act of 1944, was a law that provided a range of benefits for some of the returning World War II veterans. The original G.I. Bill expired in 1956, but the term "G.I. Bill" is still used to refer to programs created to assist some of the U.S. military veterans.
University of Phoenix (UoPX) is a private for-profit university headquartered in Phoenix, Arizona. Founded in 1976, the university confers certificates and degrees at the certificate, associate, bachelor's, master's, and doctoral degree levels. It is institutionally accredited by the Higher Learning Commission and has an open enrollment admissions policy for many undergraduate programs. The school is owned by Apollo Global Management and Vistria Group, two US private-equity firms, but is in the process of being sold. The University of Idaho announced in May 2023 its intention to acquire University of Phoenix for $550 million.
The University of Arizona Global Campus is a public online university affiliated with the University of Arizona. In 2020, Ashford University was acquired by the University of Arizona from Zovio, a for-profit higher education technology services company, and renamed the University of Arizona Global Campus. Zovio continued as the campus's online program manager until UAGC terminated its contract with Zovio in 2022.
Human resource management is the strategic and coherent approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives. Human resource management is primarily concerned with the management of people within organizations, focusing on policies and systems. HR departments are responsible for overseeing employee-benefits design, employee recruitment, training and development, performance appraisal, and reward management, such as managing pay and employee benefits systems. HR also concerns itself with organizational change and industrial relations, or the balancing of organizational practices with requirements arising from collective bargaining and governmental laws.
Employee benefits and benefits in kind include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. Instances where an employee exchanges (cash) wages for some other form of benefit is generally referred to as a "salary packaging" or "salary exchange" arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree. Examples of these benefits include: housing furnished or not, with or without free utilities; group insurance ; disability income protection; retirement benefits; daycare; tuition reimbursement; sick leave; vacation ; social security; profit sharing; employer student loan contributions; conveyancing; long service leave; domestic help (servants); and other specialized benefits.
The Veterans Benefits Administration (VBA) is an agency of the U.S. Department of Veterans Affairs. It is responsible for administering the department's programs that provide financial and other forms of assistance to veterans, their dependents, and survivors. Major benefits include Veterans' compensation, Veterans' pension, survivors' benefits, rehabilitation and employment assistance, education assistance, home loan guaranties, and life insurance coverage.
American Public University System (APUS) is a private, for-profit, online university system with its headquarters in Charles Town, West Virginia. It is composed of American Military University (AMU) and American Public University (APU). APUS is wholly owned by American Public Education, Inc., a publicly traded private-sector corporation. APUS maintains corporate and academic offices in Charles Town, West Virginia. APUS offers associates, bachelors, masters, and doctoral degrees, in addition to dual degrees, certificate programs and learning tracks.
The Society for Human Resource Management (SHRM) is a professional human resources membership association headquartered in Alexandria, Virginia. SHRM promotes the role of HR as a profession and provides education, certification, and networking to its members, while lobbying Congress on issues pertinent to labor management.
Paid time off, planned time off, or personal time off (PTO), is a policy in some employee handbooks that provides a bank of hours in which the employer pools sick days, vacation days, and personal days that allows employees to use as the need or desire arises. This policy pertains mainly to the United States, where there are no federal legal requirements for a minimum number of paid vacation days. Instead, U.S. companies determine the amount of paid time off that will be allotted to employees, while keeping in mind the payoff in recruiting and retaining employees.
The Post-9/11 Veterans Educational Assistance Act of 2008 is Title V of the Supplemental Appropriations Act of 2008, Pub. L. 110–252 (text)(PDF), H.R. 2642, an Act of Congress which became law on June 30, 2008. The act amended Part III of Title 38, United States Code to include a new Chapter 33, which expands the educational benefits for military veterans who have served since September 11, 2001. At various times the new education benefits have been referred to as the Post-9/11 GI Bill, the 21st Century G.I. Bill of Rights, or the Webb G.I. Bill, with many current references calling it simply the new G.I. Bill. President George W. Bush signed H.R. 2642 into law on June 30, 2008.
In July 2008 the Post-9/11 GI Bill was signed into law, creating a new robust education benefits program rivaling the WWII Era GI Bill of Rights. The new Post 9/11 GI Bill, which went into effect on August 1, 2009, provides education benefits for service members who served on active duty for 90 or more days since September 10, 2001. These benefits are tiered based on the number of days served on active duty, creating a benefit package that gives current and previously activated National Guard and Reserve members the same benefits as active duty servicemembers.
Wage theft is the failing to pay wages or provide employee benefits owed to an employee by contract or law. It can be conducted by employers in various ways, among them failing to pay overtime; violating minimum-wage laws; the misclassification of employees as independent contractors, illegal deductions in pay; forcing employees to work "off the clock", not paying annual leave or holiday entitlements, or simply not paying an employee at all.
Tuition.io is an American company that enables other companies to provide employer-paid student loan contributions as an employee benefit. The company is headquartered in Santa Monica, California.
The G.I. Bill Tuition Fairness Act of 2013 is a bill that would require colleges to charge veterans the in-state tuition rates regardless of whether they meet the residency requirement. The bill also makes several other changes related to veterans benefits, such as extending the time period during which veterans are eligible for job training. The bill passed the House of Representatives on February 4, 2014 during the 113th United States Congress.
For-profit higher education in the United States refers to the commercialization and privatization of American higher education institutions. For-profit colleges have been the most recognizable for-profit institutions, but commercialization has been a part of US higher education for centuries. Privatization of public institutions has also been increasing since at least the 1980s.
Purdue University Global, Inc, is a nonprofit public online university that operates as a public-benefit corporation, and is part of the Purdue University system. The university was created in April 2018 by Purdue University's acquisition and rebranding of the former private for-profit Kaplan University.
Guild is a private company headquartered in Denver, Colorado that is employed by Fortune 1000 companies to manage their education assistance benefits. Guild works for corporate employer clients to facilitate direct payment for courses to education provider clients and offers marketing services to the education provider clients.
DOD Tuition Assistance is a US Department of Defense (DOD) program that fund higher education programming for US military servicemembers who wish to attend college before their service obligation ends. Currently, DOD TA funds servicemember's college tuition and fees, not to exceed $250 per semester credit hour or $166 per quarter credit hour and not to exceed $4,500 per fiscal year, Oct. 1 through Sept. 30. In 2019, DOD spent more than $492 million on the program that year and about 220,000 troops used the benefits.
Absence management, also known as leave management, is a combination of employer policies, procedures, or programs designed to handle employee leaves of absence and minimize the impact of those absences on the employer. Absence management programs aim to maximize productivity by supporting an employee from initial absence through return-to-work and stay-at-work plans.