Employee Benefits Chapter

Chapter 13: Employee Benefits and
Services

Employee Benefits and Services | 13-1

Copyright © 2014 Pearson Canada Inc. All rights reserved.

Dessler, Chhinzer, Cole
Human Resources
Management in Canada
Canadian Twelfth Edition

Learning Outcomes

• DESCRIBE six government-sponsored
benefits.
• EXPLAIN why the cost of health
insurance benefits is increasing and how
employers can reduce these costs.


• EXPLAIN the strategic role of employee
benefits.

Learning Outcomes

• 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.


• DESCRIBE the two categories of pension
plans and the shift that is occurring in their
relative popularity.

Employee Benefits

• 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


• indirect financial payments given to
employees

Government-Mandated Benefits
• Employment Insurance (EI)
• pay on termination of employment
• Canada/Quebec Pension Plan (CPP/QPP)
• workers’ compensation
• vacations and holidays
• paid breaks


• leaves of absence

Employment Insurance (EI)

• eligibility
• benefit period
• funding
• supplemental unemployment benefit (SUB)


• a federal program that provides income
benefits if a person is unable to work
through no fault of his or her own

Pay on Termination of
Employment

• 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)



• does not apply to those on short-term
contract or fired for just cause

Leaves of Absence
• unpaid time off
• employer must guarantee same or similar
job when employee returns
• common types:
•
•
•
•

maternity/parental leave
parental/adoption leave
bereavement leave
compassionate care leave



• conditions vary by jurisdiction

reserved.
Copyright © 2014 Pearson Canada Inc. All rights reserved

Application for Leave of
Absence

continued

reserved.

Application for Leave of
Absence


Canada/Quebec Pension Plan
(C/QPP)
• programs that provide basic level of
security on retirement
• retirement income
• survivor or death benefits
• disability benefits

• benefits based on individual contributions
made



• three types of benefits:

Workers’ Compensation

• 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



• “no fault” insurance plan

Vacations, Holidays
and Paid Breaks
Vacation
• minimum amount of paid vacation must be
provided to employees
• 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


Holidays

Voluntary Employer-Sponsored
Benefits
• life insurance

• supplementary healthcare/medical insurance

• long-term disability
• sabbaticals
• retirement benefits



• short-term disability and sick leave plans

Life Insurance
• group plans offer lower rates and inclusion
of all employees
• accidental death coverage
• dismemberment coverage
• critical illness insurance



• additional benefits:

Supplementary Healthcare/
Medical Insurance
• supplements provincial healthcare plans

• 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



• group rates lower than individual rates

reserved.

Health Plan Costs


Reducing Health Benefit Costs
• increase amounts paid by employees

• restrict drugs paid for by plan

• risk-assessment programs
• healthcare spending accounts (HCSA)



• health promotion

Short-Term Disability
and Sick Leave Plans
• provides income to employees when absent
due to non-work related injury or illness

• usually covered by insurance company
sick leave plan
• provides income for 2 or 3 days
• usually a specified number of sick days per
year


• requires medical certificate

Long-Term Disability Plans
• income to employees for absence due to nonwork related long-term injury or illness

• accelerating trend in claims

• disability management
• mental health issues are leading cause of
disability claims



• usually 50% to 75% of pay

reserved.

Mental Health Benefits


Sabbaticals
• time off to rejuvenate or pursue personal
goals

• helps retain employees and avoid burnout



• usually unpaid

Retirement Benefits

• 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


• defined benefit pension plan
• benefits formula based on earnings and
years of service

reserved.

Registered Pension Plans


reserved.

Phased Retirement Programs


Employee Services
Job-related services:

• credit unions

• subsidized childcare

• counselling services

• eldercare

• employee
assistance programs
(EAPs)

• subsidized employee
transportation

• other personal
services (social and
recreational)

• food services
• educational subsidies
• family-friendly benefits


Personal services:

Executive Perquisites (Perks)
• management loans

• salary guarantees (golden parachutes)
• relocation benefits
• outplacement assistance
• company cars, chauffeured limousines

• concierge service


• financial counselling

Flexible Benefits Programs

• constraints:
• employer must limit total cost for each benefits
package
• benefit plan must include certain items that are not
optional (government mandated benefits)



• individualized benefit plans to
accommodate employee needs and
preferences

reserved.

Advantages and Disadvantages of
Flexible Benefits Programs


Benefits Administration
• approaches

• benefits communication
• must provide correct, up-to-date information
• ensure compliance with legislation
• intranet increasingly used



• use of software
• outsourcing

Employee Benefits Chapter

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