United States vs. Global Employee Benefits - Literature review Example

Human Re s United s vs. Global Employee Benefits HRM 435 Mary C. Jones The paper examines the concept of employee benefits comparing the United States benefits with global. Employee benefits are defined as indirect assistance given to an employee beyond salary, which may be mandated by law or voluntarily paid by employers. Employee benefits are supposed to provide workers with economic insurance and increase living standards as well as influence economic stability of the countries in general. The work gives broad definition of the term and concentrates on the peculiarities of legal, discretionary benefits, protection programs, paid-off time as well as accommodation and enhancement programs. The paper seeks to determine the advantages and disadvantages of working in the USA and in Canada and the types of benefits generally offered by state and private establishments in these countries. Key words: employee benefits, insurance program, retirement, medical care Employee benefits may be explained with the help of brief and wide definitions. In the limited interpretation, the definition might be regarded as legal employer`s payments in cases of deaths, sickness, retirement, accidents or unemployment. In more developed sense, the term presupposes different benefits and advantages apart from salaries for the period spent at work, that are granted to employees partially or in whole sums by the companies. Burton, Beam et al. (2001) propose to divide employee benefits into five categories. Presupposed by the law employee benefits include employer`s participation in the next categories: “social security, medical insurance, financial assistance in the case of unemployment, compensation program. The sums of money to be paid along with the period of payment are stipulated by the governments of the most countries of the world. Benefits, which are granted in cases of family members loss tragedies, are the following: deaths, age, legal expenses, disability income, property damage, liability judgments”. The third category includes the financial help for the period out of work: “vacations, holidays, maternity leave, sick leave, sabbatical leave, jury duty”. There exist additional financial help programs based on performance, such as payments for education, savings plans, and assistance with moving to the place of work, “current profit-sharing payments, and suggestion awards”. The fifth category includes the following benefits: company provided lunches, financial help with children adoption, and insurance for recovery, fitness programs, fees for garment, day care centers, legal financial advice, reimbursement assistance, and retirement benefits (Burton et al., 2001). The U.S. employee benefit system is cooperation between companies, employees, and the government. Pensions along with health care are guaranteed deliberately by most businesses. Government encourages such programs by ensuring them convenient taxation discounts (Vitt, 2003). Social Security, unemployment insurance, workers’ compensation, and maternal and medical leaves are those types of benefits, which are compulsory. Individual financial security programs are supported by the state with the help of individual retirement contracts, reduced amount of taxes, life insurance programs (Employee Benefits in the United States, 2013). Employee benefit programs have long history starting from the times of the colonists. Along to pension plan that was introduced first, latter a number of programs were included in the employee benefits list, among them health and life insurance programs, payment in cases of hospitalization for the employees and their relatives, income protection for workers with disabilities. Moreover, voluntary employment-based benefit programs became more common as state tax preferences for employee benefits coincided with rising tax rates, strengthening incentives to provide private benefits (Vitt, 2003). Today major part of employees of private and state sectors of the United States of America are provided with legal employee benefits. Employees of the federal government are more likely to receive various fringe benefits, such as health insurance coverage and a pension in retirement than workers in the private sector are. Legal benefits for public service employees are granted though there are certain variations from state to state (Beam et al., 2013). The availability of benefits for private companies depends mostly on the size of establishments: companies with more than 100 workers usually provide all range of employee programs apart from legally required. According to the US Bureau OF Labor statistics, Employee benefits in the United states (2013), 85 percent of full-time private industry workers received the access to medical care in 2013. Retirement benefits followed a similar procedure as 74 percent of full-time employees were granted with retirement plan. Paid sick leaves were received by 73 percent of all the employees those in medium and large establishments. Access and participation in life insurance benefits varied significantly for full-time and part-time workers. In private industry, 72 percent of full-time workers had access to life insurance benefits. For state and local government workers, 90 percent of full-time workers had access. In contrast, only 14 percent of part-time workers in private industry and 23 percent of state and local government workers had access. Paid holidays were available to 97 percent of management, business, and financial employees in private industry. In contrast, only 53 percent of service employees in private industry were offered paid holidays. Maternity and paternity leaves are granted for the parents for 12 weeks in according to the Family Maternity Leave Act, nevertheless the payment is usually paid after this leave period. (Employee benefits in the United States, 2013). According to Beam et al. (2001), a family’s income security plan can also be offered for the employees who have lost one of the family members, who was the one supporting the family financially. The staggering number of people, including retired, disabled, dependent, can exemplify substantial increase of quantity of these programs among private and federal employers, who received this payment. Employee benefit programs in the USA are not limited to income security and health insurance. Specialized benefits programs help provide access to a wide range of important services, including ongoing education and training, childcare, long-term care, and legal assistance. About a half percent of state and private establishments offer this type of benefits voluntarily. Other employee benefits, such as discounts for parking, products for reduced prices, assistance with relocation expenses as well reimbursement are helpful for the low-pay workers as they can provide some economically stable family life. According to The Forbes journalist, Mahn (2013), the situation with paid-off time is rather critical in the USA, as it turns out that America, despite being one of the leading world economies does not oblige employers to guarantee paid-off vacation. The lack of paid vacation and paid holidays felt the most by low-wage workers, part-time workers, and for employees of small businesses. Workers in small businesses are less likely to have any paid vacation (69 percent) than those in medium and large establishments (86 percent). Only 49 percent of low-wage workers have paid vacation, compared to 90 percent of high-wage workers; part-time workers are far less likely to have paid vacations (35 percent) than full-time workers (91 percent) (Mohn, 2013). While workers in the European Union are compulsory provided with at least 20 paid vacation days per year, with 25 and even 30 or more days in some countries (Mahn, 2013). Canada and Japan guarantee at least 10 days of paid vacation per year. Five countries even mandate that employers pay vacationing workers a small premium above their standard pay in order to help with vacation. As for Canada the situation with employee benefits is quite different despite the neighborhood with the USA. Workers in Canada have legally announced nine holidays. Workers in state as well as private establishments are also offered to two weeks’ paid vacation time, along with special benefit if a sum of money, which increases after three years of work. There exist some differences depending on the province. Maternity and paternity leaves are provided by Federal Employment Insurance Act in Canadian provinces compulsory. Employees are permitted to have job-protected, paternal and maternity leave up to 52 weeks around overall territory of Canada. Moreover, Canadian government has recently introduced an important employee benefit- additional leave for seriously ill family members, such as spouses, parents, and children. The introduction of this program adds to the family security insurance program. Canada has two well-developed pension plans for Canadian members and the citizens of Quebec. In addition to the public plans, many employers offer additional pension programs that are regulated by provincial or federal legislation, introducing minimal wages standards, specifying the types of investments. Companies often represent various plans for executive, managerial, and other workers depending on their experience and family situation. Medical insurance programs grant basic medical and hospital care in Canada to all the citizens of Canada compulsory. While public medical programs normally do not offer employees prescription medicines except of the cases of their hospitalization, nevertheless dental care is supplementary provided to the employees in some companies. Workers are also offered long- and short-term disability benefits for sickness or injury as part of employee insurance programs (Andrea, 2003). Most industries in the USA and Canada are highly prestigious and therefore must compete for the most qualified potential employees. This means that businesses must be more responsive and creative in designing benefits plans. The more progressive an organization is, the more likely the chance they will offer a flexible structure to their employee benefits. Employers with limited and conventional plans may find it difficult to hire and retain the best workers. Thus, despite the fact that employee benefits differ in some point in the USA and Canada they seek to reward, encourage and provide stability to the lives of the employees. References Andrea, J. (2003). Employee obligations in Canada. Toronto: Canada Law Book Beam, B., Burton, T., McFadden, J. (2001). Employee Benefits, Dearborn Trade Publishing. Chicago. Retrieved from http://books.google.com.ua/books?id=yN9vHhgi5lQC&printsec=frontcover&hl=uk&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false Employee Benefits in the United States. (2013). Retrieved from http://www.bls.gov/news.release/pdf/ebs2.pdf Mahn, T. (2013). U.S. The Only Advanced Economy That Does Not Require Employers To Provide Paid Vacation Time, Report Says. The Forbes. Retrieved March 28, 2014 from: http://www.forbes.com/sites/tanyamohn/2013/08/13/paid-time-off-forget-about-it-a-report-looks-at-how-the-u-s-compares-to-other-countries/ Vitt, L. (2003). Encyclopedia of Retirement and Finance.vol.1 (pp.314-320). Read More