Nowadays most companies offer a variety of benefits, especially if they are larger companies. Among them some of the benefits are compulsory. There are many major types of employee benefit plans to be offered for employees. There are many subcategories under this main category all of them are described here in detail below:
Table of Contents
Types of employee benefit plans
- Required or mandatory security
- Voluntary security
- Retirement-related security
- Time-off security
- Health insurance
- Financial service
- Social & recreational service
Required or mandatory Security
The government requires that employers provide a certain limit of protection or a security floor for each employee. There are three primary areas of compulsory security:
- Workers Compensation
- Unemployment compensation
- Social security benefit
Voluntary Security
Two of the major security benefit programs used by employers are voluntary severance pay and supplemental unemployment benefits. Severance pay is pay given to the employee at termination.
Its purpose is to provide funds to tide the employee over until he or she finds another job. The amount varies from several weeks of pay for hourly: workers to several- workers to several years worth of salary for executives.
Golden parachutes, a form of severance pay, arc paid to execute as a form of compensation if they are terminated during a hostile takeover. Executives who fear hostile takeovers often are able to obtain a golden parachute clause in their contract.
The second form of voluntary security is supplemental unemployment benefits. These are payments made by the employer to employees who are temporarily laid off. They are made in addition to unemployment compensation received from the state.
Retirement related security
Over 90 percent of full-time workers at companies with more than ‘T employees are covered by retirement plans, according to the employee benefits Research institute. A pension plan is considered a reward for long service and is not an incentive to work more efficiently and effectively unless the premium is tied to a stock option plan, as sears are. Pension plans are used primarily to retain a loyal workforce.
Time-off related benefits
1. Holiday Pay: Most employers provide pay for all established such as New Year’s Day, Memorial Day, and Fourth of July. Another firm also provides holiday pay for Christmas.
2. Vacations: Most employers offer paid vacations that range from one to six weeks per year. Depending on the length of time with the company. In one poll, employees rated paid vacations and holidays as the third most important benefit behind medical insurance and pension
3. Leave of Absence: Leaves are given for military service, jury duty, election, disability, sickness, and maternity. Longer leaves called sabbaticals are also given for renewal or special service.
Health and Insurance Related Benefit
Employers offer are various types of coverage including medical, disability, dental, life, and auto insurance. Maintaining adequate coverage while keeping costs w thin hounds is a challenge for organizations. Health Benefit.
- Cost containment method
- Employee co-payment
- Employee payment of a deductible
- Self-funded insurance
- Wellness Program
- Providing more information
- Restriction on psychiatric and substance abuse program
No medical insurance benefit: Besides health-related insurance employees also provide other forms of insurance.
According to a recent survey by the international certified society of employee benefit specialists, life insurance is offered by more employers than any other product.
Financial benefits
1. Non-financial benefits: The use of a company car, company account, club membership, help in buying and selling a home, and the use of company-owned resort condominiums are examples benefits of available to managers, executives, and some employees.
2. Stock benefits: Employee thrift, saving, or stock purchase investment plan are also popular. For example, in a stock option plan, an employee is often guaranteed the right to buy shares of company stock at a discount or a certain price.
3. ESOP: When the stock is provided as a part of a profit-sharing plan an employee stock ownership plan is developed. This benefit plan is available in the USA.
4. Educational benefits: Many firms offer a tuition reimbursement plan for employees who attend a school, college, or university. Usually, the firm requires that the employee take a course related to work.
5. Childcare benefit: Working with women with small children has become very common in our society. They should be given childcare benefits.
6. Eldercare: A study of benefit directors in 1988 indicated that 77 percent of them believed that elder care will be a major growth benefit in the USA.
7. Cafeteria plan: Because of the variety of options in the benefits area many employers have shifted to or are considering cafeteria plans. The cafeteria plan allows employees to pick and choose from a variety of benefit “options much as a person chooses food at a cafeteria.
Social and recreational benefits
Big and reputed organizations offer some social and recreational benefits to employees. For the purpose of giving relaxation, employees are given leave for a picnic, pleasure trip, etc.
Indoor and outdoor games and certificates for better performance award programs are some important social recreational benefits to the employees.
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