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University of Waterloo
Human Resources Management
HRM 200
Katrina Di Gravio

CHAPTER THIRTEEN Strategic Role of Employee Benefits  benefits are indirect financial payments (such as insurance and pensions) traditionally used to reward loyalty and tenure  employee services more important today in post-job security era  can include life and health insurance, vacation, pension, education plans, and discounts on company products Government-Sponsored Benefits  Employment Insurance (EI)  Canada/Quebec Pension Plan (C/QPP)  Workers’ Compensation  Vacations and Holidays  Leaves of Absence  Pay on Termination of Employment Employment Insurance (EI)  provides income benefits for individuals unable to work through no fault of their own Canada/Quebec Pension Plan (C/QPP)  provides retirement income, survivor or death benefits, and disability benefits to individuals who contribute to these plans Workers’ Compensation  provides income and medical benefits to victims of work- related accidents and illness, regardless of fault Vacations and Holidays  specified in employment standards legislation  paid time for vacation and statutory holidays Leaves of Absence (unpaid)  specified in employment standards legislation  maternity/pregnancy leave  paternity/parental/adoption leave  bereavement leave  compassionate care leave Pay on Termination of Employment  specified in employment standards legislation  pay in lieu of notice  severance pay  pay for mass layoffs Voluntary Employer-Sponsored Benefits  life insurance  supplementary health care/medical insurance  short-term disability/sick leave  long term disability  additional leaves of absence  additional paid vacations and holidays  retirement benefits Life Insurance  group life insurance  accidental death and dismemberment insurance  critical illness insurance Supplementary Health Care/Medical Insurance Deductible  annual amount of health/dental expense paid by employee before insurance benefits will be paid Coinsurance  percentage of expenses (in excess of the deductible) paid for by the insurance plan Reducing Health Benefit Costs  increase the amount paid by employees  publish a restricted list of drugs covered  offer health promotion programs  implement risk assessment programs  health services spending accounts Short-Term Disability/Sick Leave  pay for employees who are unable to work due to non-work- related illness or injury  short-term disability plans pay (often at declining percentages of salary) during entire absence  sick leave plans pay for a specified number of days only – get full day for permissible number of sick days Long-Term Disability  pay for employees with non-work-related long-term illness or injury (until retirement if necessary) Disability Management  assists disabled employees with return to work: o reduced work hours o reduced work duties o workstation modification Long-Term Disability: Mental Health Benefits  depression a “clear and present danger” o alcoholism o absenteeism o injury o physical illness o lost productivity Additional Leaves of Absence, Vacations, Holidays  pay for required unpaid leaves  sabbatical leaves  vacation in excess of legislated minimum  additional holidays e.g. floating day Pension Plans: Two Types  Defined Benefit Pension Plan: contains a formula for determining retirement benefits  Defined Contribution Pension Plan: employer’s contribution to the employees’ retirement fund is specified Group RRSP/DPSP  employee contributions to RRSP  employer contributions to deferred profit-sharing plan (DPSP) – company profits credited to employee’s account, payable at retirement, termination, or death  enables both to be tax deductible Pension Planning Issues  membership requirements  benefit formula (defined benefit only)  retirement age  funding (contributory or non-contributory)  vesting - employer money placed in a pension fund cannot be forfeited, even if you’re terminated i.e. usually after 2 years of working for them  portability – employees who change jobs can transfer the lump-sum value of the pension they earned to a lock-in RRSP or to new employer’s pension plan Retirement Plans: Recent Trends  rapid growth of defined contribution plans  phased retirement – employees gradually ease into retirement by using reduced workdays and/or shortened weekends  supplemental employee retirement plans (SERPs) – plans that provide additional pension benefit required for employees to receive their full pension benefit in cases here their full pension benefit exceeds max. allowable benefit under ITA Employee Services: Personal Services  credit unions  counselling services  employee assistance programs (EAPs) – help employees cope with personal problems  other (social and recreational) Employee Services: Job-Related Services  subsidized childcare  eldercare  subsidized employee transportation  food services  educational subsidies  family-friendly benefits Executive Perquisites (Perks)  loans  golden parachutes (salary guarantees to protect execs if their firms are targets of acquisitions or mergers  financial counselling  company relocation benefits  limousines  executive dining room  concierge service Flexible Benefit Programs Advantages  choose benefits to suit individual needs  meet changing needs of workforce  increased employee involvement improves understanding  introduction of new benefits less costly (merely a new option)  cost containment: firm sets a dollar maximum Disadvantages  employees make bad choices (not covered for predictable emergencies)  increased administrative cost  adverse selection: employees pick only benefits they will use (subsequent high benefit utilization increases cost) Benefits Administration  Outsourcing  Communication (especially pension)  Use of technology CHAPTER FOURTEEN Occupational Health and Safety Legis
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