Chapter 13 dessler 12-ce_ppt_ch13

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Employee Benefits and Services | 13-1

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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