Hoffman Comments on Grandfathering Benefits

24 March 2019 HR Bartender News

Partner Samuel Hoffman was quoted in an article in HR Bartender, “Consider the Implications of Grandfathering Benefits – Ask #HR Bartender,” about the pros and cons of “grandfathering” employee benefits.

Hoffman said the one pro of grandfathering a benefit is that it allows an employer to keep valuable employees happy by not having to take something away from them. The potential cons are increasing administrative complexity and the possibility for making mistakes, creating nondiscrimination testing problems, and engendering disgruntlement among newly hired workers who do not enjoy the benefits that longer-serving employees receive.

“In my experience, the disgruntlement problem is most pronounced when a more junior employee is receiving a benefit that is more valuable than the benefit being received by the employee’s boss,” he said.

Hoffman also said there are two scenarios in which an employer should consider grandfathering a benefit; when the employer has a valuable employee whom it believes would be disgruntled or perhaps leave if he or she lost a particular benefit; and when an employer has a legal or contractual obligation to continue a certain level of benefits for an employee.

“Except where grandfathering is legally required, an employer should carefully consider whether the ‘pros’ in employee retention or satisfaction for the employee or employees receiving the grandfathering outweighs the administrative and employee relations ‘cons’ of providing the grandfathered benefits,” he said.

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