COMMERCE 2BC3 Study Guide - Final Guide: Canada Revenue Agency, Physical Fitness, Child Care
25 Jun 2018
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Employee Benefits
Part of an organization’s total compensation package and include both mandatory and government-sponsored benefits and
voluntary benefits such as life and disability insurance, extended health coverage, additional vacation pay, and a range of other
options.
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Add an average of 44.5 percent to every dollar of payroll thus accounting for about 30.8 percent of the total employee
compensation package.
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Most Popular Benefits
Offer travel opportunities and sabbaticals for employees, staff lotteries, financial advice and counselling, duvet days/mornings,
flexible working, creative recognition, etc.
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Reasons for Growth of Employee Benefits
Significant growth occurred following WWII during which there were wage and price controls and labour market shortages
1.
Tax treatment of benefits is often better than the tax treatment of wages and salaries for both employee and employers
2.
Cost advantage that groups realize over individuals
3.
Growth of organized labour from the 1930s to 1950s
4.
Employers might use benefits to differentiate themselves from other employers
5.
Benefit Programs
A mandatory government-sponsored pension plan funded by employers and employees that provides a basic level of
income security for working Canadians when they retire or become disabled; administered separately in Quebec
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Canada/Quebec Pension Plan (CPP/QPP)
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A mandatory government-sponsored plan funded by employee and employer contributions that offsets lost income to
eligible employees for reasons of job loss, illness or compassionate leave and that provides maternity and parental
benefits and a variety of other employment initiatives
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Financed through both federal and provincial funding supported by payroll deductions for employee and employer
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Employees contribute $1.88 for very 100 of insurable earning –max $930.60
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Employers pay 1.4 times the employee contribution
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Earnings = 55% of average earnings (14 to 26 weeks)
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Receive benefits for 14 to 45 weeks
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Employment Insurance Act/ Employment Insurance (EI)
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A mandatory government-sponsored insurance plan funded by employers that provides wage-loss benefits, health
care, survivor benefits and rehabilitative services to eligible employees with work-related injuries or diseases; is tax
free
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Nature of the occupation
1.
Province/territory where work was located
2.
Employer's experience rating
3.
It is a premium based on three factors:
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Workers’ Compensation
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Eligibility is determined by: prior workforce attachment, available and willing to work each day, actively seeking work, and
not discharged for cause
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Mandatory Government-Sponsored Benefits
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Group insurance rates usually lower than individual rates due to economies of scale, the ability to pool risks and the
greater bargaining power of a group
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Private Group Insurance
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Most important benefit to average person.
1.
Hospital expenses not covered by provincial plans
2.
Dental care
3.
Vision care
4.
Prescription drug programs
5.
Extended Medical Insurance
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Benefits plans that provide income security to employees for short periods of absence from work due to non-
work-related illness or injury
○
Usually less than a year
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Short-Term Disability Plan:
1.
A form of income for longer periods of absence from work due to non-work-related chronic illness or disabilities
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More than a year until 65 years
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Long-Term Disability Plan:
2.
Disability Insurance
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Voluntary Employer-Sponsored Benefits
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Pension Design and Education:
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Retirement
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Benefits
July 27, 2017
6:55 PM
Human Resources Management and Labour Relations Page 1
