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Lecture 2

Week 23

5 Pages
93 Views

Department
Economics
Course Code
ECO244Y5
Professor
Reid/ Curran

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Textbook:
Week 23 - Chapter 13
Government-Sponsored Benefits
Employment Insurance (EI)
Employment Insurance is a federal program that provides income benefits if a person is unable to
work through no fault of his/her own. Ex. Getting laid off for an unjust reason.
To receive benefits, an employee must first have worked a minimum number of hours during a
minimum number of weeks, which is called a qualifying period. Then theres a waiting period
from the last day of work and until the benefits begin. If the employer provides severance pay at
the time of losing the job, these payments must run out before the waiting period being.
Employer contributions can be reduced if the employer provides a wage loss replacement plan for
employee sick leave.
A supplemental unemployment benefit (SUB) plan is an agreement between an employer and the
employee for a plan that enables employees who are eligible for EI benefits to receive additional
benefits from a SUB fund created by the employer. They use this when the employee is on
maternity leave.
Canada/Quebec Pension Plan (C/QPP)
C/QPP are programs that provide three types of benefits: retirement pensions, disability pensions,
and survivor benefits.. Benefits are payable only to those individuals who make contributions to
the plans and/or available to their family members.
Retirement Pension
oCalculated as 25% of the average earnings over the years during which contributions were
made.
oBenefits are reduced on early retirement and are increased in the case of late retirement.
Disability Benefits
oAre only paid for severe disabilities that are expected to be permanent or to last for an
extended period.
oThe disability benefit is 75% of the pension benefit earned at the date of the disability,
plus a flat-rate amount per child.
Survivor Benefits
oAre benefits paid on the death of a plan member.
oA lump sum payment is made to the plan members estate, and a monthly pension is also
payable to the surviving spouse and each dependent child.
Workers Compensation
Workers compensation laws are aimed at providing sure, prompt income and medical benefits to
victims of work-related accidents or illnesses and/or their dependants, regardless of fault.
This is basically a no fault insurance plan designed to help injured or ill workers get well and
return to work. The basic requirement that an employee need in order to qualify for the
compensation is that they must prove that it arose while the employee was on the job.
Controlling Workers Compensation Costs
oControl the accidents from happening by reducing anything that can cause accidents.
oThere are two basic approaches to reducing workers compensation claims
Firms try to reduce accidents- or illness-causing conditions in the company by
having safety and health programs.
www.notesolution.com
Since workers compensation costs increase the longer an employee is unable to
return to work, employers have become involved in instituting rehabilitation
programs for injured or ill employees.
This includes physical therapy programs and career counselling.
Vacations and Holidays
Labour/employment standards legislation sets out a minimum amount of paid vacation that must
be provided to employees.
Leaves of Absence
In Canada, it is required that employees get unpaid leaves of absence in certain circumstances.
Maternity leave is provided in every jurisdiction.
Employees who take those leaves of absence are guaranteed their old job or a similar job when
they return to work.
Although these leaves are unpaid, it is incorrect to assume that the leave is costless to the
employer.
Pay on Termination of Employment
Employment/labour standards legislation requires that employees whose employment is being
terminated by the employer be provided with termination pay when they leave.
Pay in Lieu of Notice
oAn employee must be provided with advance written notice if the employer is going to
terminate his/her employment.
oThe amount of advance notice that is required increases with the length of employment of
the employee and varies among jurisdictions.
oMost of the time, employers ask the employee to cease working immediately and provide
the employee with a lump sum equal to their pay for the notice period. This amount is
called pay in lieu of notice.
Severance Pay
oEmployees in most jurisdiction may be eligible for severance pay in addition to pay in lieu
of notice in certain termination situations.
oPeople thats eligible for this if:
The employee has been in the company for 5+ years
The employer’s annual payroll is $2.5+ million
The employer is closing down the business and 50 or more employees will be
losing their jobs within a 6-month period.
oThe amount of pay ranges from 1 week to 26 weeks.
Pay for Mass Layoffs
oAdditional pay must be provided when a layoff of 50 or more employees occurs.
oThe amount of pay range from 8 weeks to 18 weeks.
Voluntary Employer-Sponsored Benefits
Employers often provide many other employee benefits, even if theyre not required to do so.
Life Insurance
All employers provide group life insurance plans for their employees.
oInsurance provided at lower rates for all employees, including new employees, regardless
of health or physical condition.
www.notesolution.com

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Description
Textbook: Week 23 - Chapter 13 Government-Sponsored Benefits Employment Insurance (EI) Employment Insurance is a federal program that provides income benefits if a person is unable to work through no fault of hisher own. Ex. Getting laid off for an unjust reason. To receive benefits, an employee must first have worked a minimum number of hours during a minimum number of weeks, which is called a qualifying period. Then theres a waiting period from the last day of work and until the benefits begin. If the employer provides severance pay at the time of losing the job, these payments must run out before the waiting period being. Employer contributions can be reduced if the employer provides a wage loss replacement plan for employee sick leave. A supplemental unemployment benefit (SUB) plan is an agreement between an employer and the employee for a plan that enables employees who are eligible for EI benefits to receive additional benefits from a SUB fund created by the employer. They use this when the employee is on maternity leave. CanadaQuebec Pension Plan (CQPP) CQPP are programs that provide three types of benefits: retirement pensions, disability pensions, and survivor benefits.. Benefits are payable only to those individuals who make contributions to the plans andor available to their family members. Retirement Pension o Calculated as 25% of the average earnings over the years during which contributions were made. o Benefits are reduced on early retirement and are increased in the case of late retirement. Disability Benefits o Are only paid for severe disabilities that are expected to be permanent or to last for an extended period. o The disability benefit is 75% of the pension benefit earned at the date of the disability, plus a flat-rate amount per child. Survivor Benefits o Are benefits paid on the death of a plan member. o A lump sum payment is made to the plan members estate, and a monthly pension is also payable to the surviving spouse and each dependent child. Workers Compensation Workers compensation laws are aimed at providing sure, prompt income and medical benefits to victims of work-related accidents or illnesses andor their dependants, regardless of fault. This is basically a no fault insurance plan designed to help injured or ill workers get well and return to work. The basic requirement that an employee need in order to qualify for the compensation is that they must prove that it arose while the employee was on the job. Controlling Workers Compensation Costs o Control the accidents from happening by reducing anything that can cause accidents. o Ther arFirms try to reduce accidents- or illness-causing conditions in the company by having safety and health programs. www.notesolution.com
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