Chapter 13: Employee Benefits and Services Flashcards
Strategic role of employee benefits
- indirect financial payments given to employees
- may include supplementary health and life insurance, vacation, pension, education plans, and discounts on company product.
- becoming larger part of total compensation
- useful in attracting talent
- increasingly important for aging workforce
six government-sponsored benefits
- Employment Insurance (EI)
- pay on termination of employment (serverance , mass layoff)
- leaves of absennce
- Canada/Quebec Pension Plan (CPP/QPP) -casual and migrants are excluded. Self employed included
- Workers compensation-work rlacted accidents or illnness
- vacations and holidays, paid breaks
Employee Insurance (EI)
- a federal program that provides income benefits if a person is unable to work through no fault of his or her own
- eligibility
- benefit period
- funding
- supplemental unemployment benefit (SUB)
pay on termination of employment
- does not apply to those of short-term contract or fired for just cause
- amount of payment varies according to jurisdiction and circumstances:
- pay in lieu of reasonable notice
- severance pay (Ontario and federal jurisdiction only)
- pay for mass layoffs (some jurisdictions )
Leaves of Absence
unpaid time off
- condition vary by jurisdiction
- employer must guarantee same or similar job when employee returns
- common types :
- maternity/parental leave
- parental/adoption leave
- bereavement leave- compassionate care leave
- maternity/parental leave
Canada/Quebec Pension Plan (C/QPP)
- programs that provide basic level of security on retirement
- three types of benefits
- retirement income
- survivor or death benefits
- disability benefits
- benefits based on individual contributions made
Workers compensation
- “no fault” insurance plan
- income and medical benefits to victims of work related accidents or illnesses, regardless of fault
- funded collectively by employers
- administered by jurisdictional workers’ compensation boards
Paid time off
- Vacantion - minimum amount of paid vacation must be provided to employees
- Holidays- varies by jurisdiction— minimum 5 days, maximum 9
- Paid Breaks- uninterrupted break within a work day–e.g. 30 minute break on a shift over 5 hours
Voluntary Employer -Sponsered
- life insurance
- supplementary healthcare/medical insurance
- short-term disability and sick leave plans
- long-term disability
- sabbaticals
- retirement benefits
supplementary healthcare/medical insurance
- supplements provincial healthcare plans
- group rates lower than individual rates
- employee usually pays a yearly deductible amount
- usually includes prescription drugs, private/semi-private hospital rooms, other health costs not covered by provincial plans
- may include dental, vision care, hearing aids
Reducing health benefits costs
increase amounts paid by employees
- restrict drugs paid for by plan
- health promotion
- risk-assessment programs
- health care spending accounts (HCSA)
Short-term diability
- provides income to employees when absent due to non-work related injury or illness
- requires medical certificate
- usually covered by insurance company
-sick leave plans
- provides income for 2 or 3 days
- usually a specified number of sick days per year
long term disability plans
- income to employees for asence due to non-work related long-term injury or illness
- usually 50% to 75% of pay
- accelerating trend in claims
- disability management
- mental health issues are leading cause of disability
sabbaticals
- time off to rejuvenate or pursue personal goals
- usually unpaid
- helps retain employees and avoid burnout
defined benefit pension plan
A plan that contains a formula for determining retirement benefits.
defined contribution pension plan
A plan in which the employer’s contribution to the employees’ retirement fund is specified.
Group RRSP
- employees can have a portion of their compensation (which would otherwise be paid in case ) put into an RRSP by the employer- not taxed on dollars until they retire.
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.
employee services
flexible work schedules
- flextime
- telecommuting
- compressed workweeks
- job sharing
- work sharing
Flexible Benefits programs
- individualized benefits plans to accommodate employee needs and preferences
- constraints
- employer must limit total cost for each benefits package
- benefit plan must include certain items that are not optional (government mandated benefits)
Employee benefits
Indirect financial payments given to employees. They may include supplementary health and life insurance, vacation, pension plans, education plans, and discounts on company products.
Advance / reasonable notice
Advance written notice required if theemployer is going to terminate employment of a worker without cause.
pay in lieu
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.
Group Life Insurance
Life insurance provided at lower rates for all employees, including new employees, regardless of health or physical condition.
Accidental Death and Dismemberment Coverage
Employer-paid benefit that provides a fixed lump-sum benefit in addition to life insurance benefits when death is accidental or a range of benefits in case of accidental loss of limbs or sight.
Critical Illness insurance
The benefit that provides a lump-sum benefit to an employee who is diagnosed with and survives a life-threatening illness.
Dedectible
the annual amount of health/dental expenses that an employee must pay before insurance benefits will be paid
coinsurance
the percentage of expenses (in excess of the deductible) that are paid for by the insurance plan
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.
Pension plans
plans that provide income when employees reach a predetermined retirement age
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 the lump-sum value of the pension they have earned to a locked-in RRSP or their new employer’s pension plan.
Phased Retirement
An arrangement whereby employees gradually ease into retirement by using reduced workdays or shortened workweeks.
Supplemental employee retirement plans (SERPs)
Plans that provide the additional pension benefit required for employees to receive their full pension benefit in cases where their full pension benefit exceeds the maximum allowable benefit under the Income Tax Act.
Flextime
A work schedule in which employees’ workdays are built around a core of midday hours, and employees determine, within limits, what other hours they will work.
compressed workweek
Schedule in which employee works fewer but longer days each week.
telecomuting
using technology to work away from the office.
Job sharing
allows two or more people to share a single full-time job
work sharing
A temporary reduction in work hours by a group of employees during economic downturns as a way to prevent layoffs.
employee assistance plan
A 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.
flexible benefits programs
Individualized benefit plans to accommodate employee needs and preferences.
