Chapter 13: Employee Benefits and Services Flashcards
Employee benefits
indirect financial payments that an employee receives during his or her employment with an employer
Such as supplementary health and life insurance, vacation, pension plans, education plans, and discount on company products
Benefits as a percentage of gross annual payroll (for public and private sectors combined) are approximately______percent
10
Figure 13.1
Top Benefits Choices among Canadians
Top Three benefits
1) Additional week of paid time off
2) $500 salary increase
3) $500 employer contribution to TSFA / Retirement
Mandatory government benefits include:
1) employment insurance (EI),
2) pension plans (CPP/QPP),
3) workers’ compensation,
4) time off,
5) pay on termination of employment
How many Mandatory government benefits are tehre?
5
five
Employment Insurance (EI)
a federal program intended to provide temporary financial assistance to eligible persons who experience interruption to their work through no fault of their own
EI benefits are not payable when an employee is terminated for just cause
Qualifying period
Part of EI
To receive benefits, an employee must first have worked a minimum number of hours during a minimum number of weeks
Canada/Quebec Pension Plan (C/QPP)
CPP
Programs that provide three types of benefits:
Retirement income
Survivor or death benefits payable to the employee’s dependents regardless of age at time of death
Disability benefits payable to the employees with disabilities and their dependents.
Benefits are payable only to those individuals who make contributions to the plans or to their family members
The retirement pension (1/3 CPP benefits)
is calculated as 25 percent of the average earnings (adjusted for inflation up to the average inflation level during the last five years before retirement) over the years during which contributions were made
Disability benefits (1/3 CPP benefits)
only paid for severe disabilities that are expected to be permanent or to last for an extended period. The disability benefit is 75 percent of the pension benefit earned at the date of disability, plus a flat-rate amount per child
Survivor benefits (1/3 CPP benefits)
are paid on the death of a plan member. A lump-sum payment is made to the plan member’s estate, and a monthly pension is also payable to the surviving spouse and each dependent child.
Worker’s compensation
Provide income and medical benefits to victims of work-related accidents or illnesses or their dependents, regardless of fault
In practice, there are two basic approaches to reducing workers’ compensation claims:
First, firms try to reduce accident- or illness-causing conditions in facilities by instituting effective safety and health programs and complying with government safety standards.
Second, since workers’ compensation costs increase the longer an employee is unable to return to work, employers have become involved in instituting rehabilitation programs for injured or ill employees
All provinces, territories and the federal jurisdictions require unpaid leaves of absence to be provided to employees in certain circumstances
Word
_______________ leave is provided in every jurisdiction (usually after one year of service). The amount of maternity leave is 17 or 18 weeks in each jurisdiction (15 weeks in Alberta), but parental and _______ leaves range from 34 to 52 weeks.
Maternity and parental
adoption
integrated absence management
This starts with collecting data. For instance, how many people are on leave; how many days of work is the employer losing; how much is the employer spending to replace absent workers; and what units have the attendance problems? These employers then closely monitor all aspects of their employees’ leaves and absences.
The number of paid holidays similarly varies considerably from one jurisdiction to another, from a minimum of ____ to a maximum of ____
5 to 9
Advance notice
AKA Reasonable notice
Advance written notice required if the employer is going to terminate employment of a worker without just cause
Pay in lieu of reasonable notice
A lump-sum equal to an employee’s pay for the notice period provided to employees who cease working immediately
Severance Pay
an additional payout on top of the minimum notice period requirements, and only applies if the specific conditions in the applicable jurisdiction are met
Who pays into workers’ compensation?
PREMATURE QUIZ QUESTION
The employer alone.
Who pays into EI?
PREMATURE QUIZ QUESTION
Worker and Employer
Group Life insurance
Life insurance provided to lower rates for all employees, including new employees, regardless of health or physical condition
Accidental death and dismemberment coverage
provides a fixed lump-sum benefit in addition to life insurance benefits when death is accidental.
It also provides a range of benefits in case of accidental loss of limbs or sight, and is often paid for by the employer.
Critical illness insurance
provides a lump-sum benefit to an employee who is diagnosed with and survives a life-threatening illness
Deductible
The annual amount of health / dental expenses that an employee must pay before insurance benefits will be paid
Short-term disability plans
Salary continuation plans
Provide a continuation of all or part of an employee’s earnings when the employee is absent from work because of non-work-related illness or injury
Sick leave
Provides pay to employees when they’re out of work due to illness.
Most policies grant full pay for a specified number of sick days—perhaps 12 per year, usually accumulating at the rate of, say, one day per month of service.
Pooled paid leave plans (or “banks”)
These plans lump together sick leave, vacation, and personal days into a single leave pool
Disability management
A proactive, employer-centred process that coordinates the activities of the employer, the insurance company, and healthcare providers in an effort to minimize the impact of injury, disability, or disease on a worker’s capacity to successfully perform his or her job.
The Top Challenges in Improving How Mental Health Issues Are Addressed in the Workplace
1) Employee perception and stigma related to mental health issues (60%)
2) Lack of front-line manager awareness (54%)
3) Inability to identify suitable modified work (40%)
What is the difference between a deductible and co-insurance in supplementary health care?
PREMATURE QUIZ QUESTION
A deductible is a set amount per year, co-insurance is a percentage of the total cost.
Pension plans
Plans that provide income when employees reach a predetermined retirement age
Pension plans fall into two categories:
1) Defined benefit pension plans
2) Defined contribution pension plans
defined benefit pension plan
A plan that contains a formula for determining retirement benefits so that the actual benefits to be received are defined ahead of time
Example: the plan might include a formula, such as 2 percent of final year’s earnings for each year of service, which would provide a pension of 70 percent of final year’s earnings to an employee with 35 years of service
defined contribution pension plan
A plan in which the employer’s contribution to the employee’s retirement fund it specified
The employee cannot be sure of his or her retirement benefits until retirement, when his or her share of the money in the pension fund is used to buy an annuity.
Employer-sponsored pension plans
Intended to supplement an employee’s government-sponsored retirement benefits, which, on average, make up 50 percent of the average Canadian’s retirement income.
This is often seen as not sufficient alone.
The employer-sponsored pension plans are prefunded.
There are two other types of defined contribution arrangements: what are they?
1) Group registered retirement savings plan (group RRSP)
2) ??
Deferred profit-sharing plan (DPSP)
A plan in which a certain amount of company profits is credited to each employee’s account, payable at retirement, termination, or death
When designing a pension plan, there are several legal and policy issues to consider:
Membership requirements.
Benefit formula (defined benefit plans only)
Retirement age
Funding
Vesting
Portability
Vesting
A provision that employer money placed in a pension fund cannot be forfeited for any reason
Portability
A provision that employees who change jobs can transfer lump-sum value of the pension they have earned to a locked-in RRSP or their new employer’s pension plan
Phased retirement
employees gradually ease into retirement using reduced workdays or shortened work weeks, has been increasing in Canada
Supplemental Employee Retirement Plans (SERPs)
Plans that provide the additional pension benefits required for employees to receive their full pension benefits in cases where their full pension benefit exceeds the maximum allowable benefit under the Income Tax Act
Both an RRSP and a DPSP are types of defined contribution plan. However,
PREMATURE QUIZ QUESTION
an RRSP holds the employee’s contribution, while a DPSP holds the employer’s contribution.
Family-friendly benefits
intended to reduce the extent to which work–family conflicts spill over into the employee’s job and undermine the person’s job satisfaction and performance
There are several flexible work schedule options that do not reduce the hours that an employee contributes to the workplace, including:
flextime, telecommuting, compressed work weeks, job sharing, and work sharing
Flextime
a plan whereby employees’ workdays are built around a core of midday hours, such as 11:00 a.m. to 2:00 p.m. Thus, workers may opt to work from 7:00 a.m. to 3:00 p.m. or from 11:00 a.m. to 7:00 p.m
Telecommuting
using technology to work away from the office
Compressed Work Weeks
Working less days but longer hours
Such as 4 days a week, 10 hour shifts
Job Sharing
allows two or more people to share a single full-time job.
For example, two people may share a 40-hour-per-week job, with one working mornings and the other working afternoons
Work Sharing
refers to a temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs
Employee Assistance Plans (EAPs)
Company-sponsored program to help employees cope with personal problems that are interfering with or have the potential to interfere with their job performance, as well as issues affecting their well-being or the well-being of their families
Perquisites
perks, for short
Which of the following is not a mandatory benefit provided or required by government?
PREMATURE QUIZ QUESTION
Supplementary health care.
Which of the following is not considered a personal service offered by employers as part of employee benefits programs?
PREMATURE QUIZ QUESTION
Educational subsidies.
flexible benefits programs
individualized benefit plans to accommodate employee needs and preferences
Flexible benefits plans empower the employee to put together his or her own benefit package, subject to two constraints:
First, the employer must carefully limit total cost for each total benefits package.
Second, each benefit plan must include certain items that are not optional—for example, Canada/Quebec Pension Plan, workers’ compensation, and employment insurance
Dramatic increases in healthcare costs are the biggest issue facing benefits managers in Canada today
The main reasons for these increases are increased use of expensive new drugs and rising drug use by an aging population
Coinsurance
The Percentage of expenses (in excess of the deductible) that are paid for by the insurance plan
According to the textbook, the simplest approach to reducing health-benefit costs of organizations is to increase the amount of healthcare costs paid by which of the following?
QUIZ QUESTION
Employees
Individualized benefit plans that accommodate unique employee needs and preferences for benefits, are known as which of the following?
QUIZ QUESTION
Flexible benefit programs
Accidental death and dismemberment coverage provides annual payments in addition to life insurance benefits when employees are diagnosed with but survive a life-threatening illness.
QUIZ QUESTION
False
A defined benefit pension plan contains a formula for determining retirement benefits.
QUIZ QUESTION
TRUE
In most provinces, pension legislation requires that employer contributions be vested once the employee has completed how many years of service?
QUIZ QUESTION
2
Which of the following is the type of retirement plan that does not define the eventual benefit amount, but only the periodic employer contribution to the plan?
QUIZ QUESTION
Defined contribution pension plan
According to the textbook, what percentage of employers have implemented return-to-work programs specific to mental health?
QUIZ QUESTION
NOT 53%
The employment insurance program is funded by contributions from eligible employees but not their employers.
QUIZ QUESTION
FALSE
What is known as a proactive, employer-centred process that coordinates the activities of the employer, the insurance company, and healthcare providers in an effort to minimize the impact of injury, disability, or disease on a worker’s capacity to successfully perform his or her job?
QUIZ QUESTION
Disability management
According to the textbook, what are the main reasons for increasing healthcare costs in Canada?
QUIZ QUESTION
Increasing use of expensive new drugs and rising drug use by an aging population
A job-related service benefit that is designed to assist employees who must help aging parents or relatives who are not fully able to care for themselves is known as
QUIZ QUESTION
eldercare.
What is the benefit that provides a fixed lump-sum benefit in addition to life insurance benefits when death is accidental?
QUIZ QUESTION
Accidental death and dismemberment coverage
The provincial and federal governments pay the full cost of the workers’ compensation system.
QUIZ QUESTION
FALSE
According to the textbook, what three benefits form the cornerstone of almost all benefits programs?
QUIZ QUESTION
Life insurance,
long-term disability,
and supplementary healthcare/medical insurance
According to the textbook, what is the average cost of benefits, as a percentage of payroll for public and private sectors combined?
QUIZ QUESTION
37%
What are the indirect financial payments given to employees known as?
QUIZ QUESTION
Employee benefits
Individualized benefit plans that accommodate unique employee needs and preferences for benefits, are known as which of the following?
QUIZ QUESTION
Flexible benefit programs
Which of the following is a salary guarantee that protects executives if their firms are the targets of acquisitions or mergers?
QUIZ QUESTION
Golden parachutes
According to the textbook, which of the following employee benefits is becoming increasingly important for the aging workforce?
QUIZ QUESTION
Healthcare benefits
What is the purpose of a supplemental unemployment benefit plan?
QUIZ QUESTION
To supplement employment insurance benefits by receiving a combined benefit closer to the actual working wage
The three types of benefits provided under the Canada/Quebec Pension Plan are
QUIZ QUESTION
Retirement pensions,
disability pensions,
and survivor benefits.
What type of leave can employers provide for employees who want time off to rejuvenate or to pursue a personal goal?
QUIZ QUESTION
Sabbatical leave
What amount of life insurance does group life insurance usually provide?
QUIZ QUESTION
Two years’ salary
What is the benefit that provides pay to an employee when he or she is out of work because of a non-work related injury or illness?
QUIZ QUESTION
Short-term disability plans
In a contributory pension plan, pension fund contributions are made by
QUIZ QUESTION
both the employer and the employee.
Workers’ compensation is, in effect, what type of insurance plan?
QUIZ QUESTION
“No fault”
Which of the following includes executive perquisites related to subsidized mortgages, purchase of the executive’s current house, and payment for the actual move?
QUIZ QUESTION
Relocation benefits
What is the range of the leave in weeks for parental and adoption leaves?
QUIZ QUESTION
34 to 52
Which of the following is the popular work arrangement that involves using technology to work away from the office?
QUIZ QUESTION
Telecommuting
