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Pear
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Employee Benefits and Services | 13-1
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Pear
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Dessler, Chhinzer, ColeHuman Resources
Management in CanadaCanadian Twelfth Edition
Chapter 13: Employee Benefits and Services
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Employee Benefits and Services | 13-2
Learning Outcomes
•EXPLAIN the strategic role of employee benefits.
•DESCRIBE six government-sponsored benefits.
•EXPLAIN why the cost of health insurance benefits is increasing and how employers can reduce these costs.
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Employee Benefits and Services | 13-3
Learning Outcomes
• DESCRIBE the two categories of pension plans and the shift that is occurring in their relative popularity.
• DISCUSS three types of personal employee services and six types of job-related services offered to employees.
• EXPLAIN how to set up a flexible benefits program.
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Employee Benefits and Services | 13-4
Employee Benefits
• indirect financial payments given to employees
• may include supplementary health and life insurance, vacation, pension, education plans, and discounts on company products
• becoming larger part of total compensation• useful in attracting talent• increasingly important for aging workforce
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Employee Benefits and Services | 13-5
Government-Mandated Benefits
• Employment Insurance (EI)• pay on termination of employment• leaves of absence• Canada/Quebec Pension Plan (CPP/QPP)• workers’ compensation• vacations and holidays• paid breaks
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Employee Benefits and Services | 13-6
Employment 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)
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Employee Benefits and Services | 13-7
Pay on Termination of Employment
• does not apply to those on 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)
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Employee Benefits and Services | 13-8
Leaves of Absence
• unpaid time off• conditions 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
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Employee Benefits and Services | 13-9
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Application for Leave of Absence
continued
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Employee Benefits and Services | 13-10
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Application for Leave of Absence
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Employee Benefits and Services | 13-11
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
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Employee Benefits and Services | 13-12
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
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Employee Benefits and Services | 13-13
Vacations, Holidaysand Paid Breaks
Vacation• minimum amount of paid vacation must be provided
to employeesHolidays• varies by jurisdiction,• minimum 5 days, maximum 9Paid breaks• uninterrupted break within a work day• e.g. 30 minute break on a shift over 5 hours
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Employee Benefits and Services | 13-14
Voluntary Employer-Sponsored Benefits
• life insurance• supplementary healthcare/medical insurance• short-term disability and sick leave plans• long-term disability• sabbaticals• retirement benefits
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Employee Benefits and Services | 13-15
Life Insurance
• group plans offer lower rates and inclusion of all employees
• additional benefits:• accidental death coverage• dismemberment coverage• critical illness insurance
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Employee Benefits and Services | 13-16
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
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Employee Benefits and Services | 13-17
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Health Plan Costs
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Employee Benefits and Services | 13-18
Reducing Health Benefit Costs
• increase amounts paid by employees• restrict drugs paid for by plan• health promotion• risk-assessment programs• healthcare spending accounts (HCSA)
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Employee Benefits and Services | 13-19
Short-Term Disability and Sick Leave Plans
• provides income to employees when absent due to non-work related injury or illness
• requires medical certificate• usually covered by insurance companysick leave plan• provides income for 2 or 3 days• usually a specified number of sick days per
year
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Employee Benefits and Services | 13-20
Long-Term Disability Plans
• income to employees for absence 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 claims
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Employee Benefits and Services | 13-21
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Mental Health Benefits
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Employee Benefits and Services | 13-22
Sabbaticals
• time off to rejuvenate or pursue personal goals
• usually unpaid• helps retain employees and avoid burnout
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Employee Benefits and Services | 13-23
Retirement Benefits• defined benefit pension plan
• benefits formula based on earnings and years of service
• defined contribution pension plan• benefits based on amount of contribution and
value of fund• group RRSP
• employer sets up RRSP fund• deferred profit sharing plan (DPSP)
• portion of profits is put into fund
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Employee Benefits and Services | 13-24
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Registered Pension Plans
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Employee Benefits and Services | 13-25
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Phased Retirement Programs
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Employee Benefits and Services | 13-26
Employee Services
Personal services:• credit unions• counselling services• employee assistance
programs (EAPs)• other personal
services (social and recreational)
Job-related services:• subsidized childcare• eldercare• subsidized employee
transportation• food services• educational subsidies• family-friendly benefits
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Employee Benefits and Services | 13-27
Executive Perquisites (Perks)
• management loans• salary guarantees (golden parachutes)• financial counselling• relocation benefits• outplacement assistance • company cars, chauffeured limousines • concierge service
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Employee Benefits and Services | 13-28
Flexible Benefits Programs
• individualized benefit 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)
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Employee Benefits and Services | 13-29
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Advantages and Disadvantages of Flexible Benefits Programs
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Employee Benefits and Services | 13-30
Benefits Administration
• approaches• use of software• outsourcing
• benefits communication• must provide correct, up-to-date information• ensure compliance with legislation• intranet increasingly used