What Are Benefit Packages for Employees? (With Details)

By Indeed Editorial Team

Published October 12, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Providing benefits to employees is an excellent way to attract new talent and retain staff members. High-quality employees are more likely to remain with a company if they receive competitive benefits packages. If you're working as a human resources (HR) manager, learning more about these packages may help you determine which are mandatory by law and which your employees prefer to receive. In this article, we discuss what benefit packages for employees are, explain the importance of employee benefits, and provide you with a list of common benefits employers offer.

What are benefit packages for employees?

Benefits packages for employees are non-monetary and indirect compensation offered by employers to their staff. The benefits that organizations provide employees can vary depending on their industry, and many employees apply for jobs depending on the benefits the employing organization offers.

Related: Workers Perks and Benefits: 20 Most Common and Explanation

Why are benefit packages important?

The following explains the importance of offering benefits to employees:

Attract talented candidates

A salary or hourly wage isn't the only aspect of a compensation package that appeals to new candidates. The inclusion of a benefits package can encourage a potential employee's decision to join a company. An attractive benefits package also helps persuade a candidate to work for an employer instead of taking a position elsewhere. It's crucial for an organization to use opportunities to present itself as the best choice for top talent. Offering an excellent benefits package with a job offer is a tactic that can be helpful to a company.

Increase employee retention

After a new candidate signs an employment contract with an organization, it's important for the company to work on retaining them. An attractive benefits package can encourage employees to stay with a company. Benefits show an organization's appreciation for its employees. When employees are recognized for their hard work and loyalty, overall job satisfaction is likely to increase. When employees are happy, they often remain committed to the employer, resulting in greater motivation, productivity, and efficiency.

Related: Common Causes and How to Prevent High Employee Turnover

Keep a healthy workforce

Providing company benefits such as extended health can help maintain a productive workforce and keep business operations running smoothly. Some benefits may encourage employees to stay home when they feel sick, preventing them from passing their illness to their colleagues. This helps prevent a loss of revenue due to absence or illness and shows overall concern for the well-being of employees.

Types of employee benefits

As of 2022, these are the requirements for employee benefits under Canada's Labour Law:

Paid time off

The federal government guarantees employees various amounts of paid time off (PTO) depending on where they live. Federal law mandates that employees receive a minimum of two weeks of PTO per year with a minimum of one year of employment. After working for five years, this minimum increases to three weeks. After 10 consecutive years of working for the same employer, the minimum is four weeks annually.

Pension plan contributions

Employers, employees, and self-employed individuals are required to contribute to the Canadian Pension Plan (CPP). An employer is required to contribute by deducting a specific percentage of their employee's wages, but some employees are exempt from this. In return for this deduction, employees have access to survivors' benefits, retirement pensions, and specific disability benefits. The percentage an employer is required to contribute varies each year.

Related: How Employer-Sponsored Pension Plans Work

Minimum wage and overtime

Minimum wage and overtime rates vary according to the employer's province or territory. Some regions in the country require employers to pay an overtime rate when employees work more than eight hours a day or 40 hours per week, and others increase this limit to 48 hours per week. Most provinces or territories mandate that employers pay 150% of regular wages when employees work overtime. Some increase this rate to 200%, depending on how much overtime the employee works.

Employment insurance

Employment insurance (EI) provides employees with regular benefits if they lose their employment through no fault of their own and cannot replace their job. Individuals receiving EI can have these benefits from 14 to 45 weeks while they attempt to find another position. Employers are required to make contributions to EI according to their employees' earnings. Typically, employers deduct a specific percentage of an employee's wages and contribute to their premiums. Employers can deduct this contribution as a standard business expense. In return, the employee can receive benefits in the event of unemployment.

Maternity and parental leave

The federal government provides for a maximum of 15 weeks of maternity leave for all employees who give birth. Some provinces and territories offer different numbers of weeks for unpaid maternity leave. New parents can use this benefit, separately or consecutively, if the employee uses it within one year from the child's birth. Employers aren't required to pay for maternity and parental leave. The employee receives pay from government programs that receive funding from social contributions and taxes.

Related: How to Write a Maternity Leave Letter to Your Employer

Sick leave

Sick leave is a type of paid leave available to employees who are incapable of performing their duties because of non-occupational illness or injury. The number of days varies depending on where you live. It entitles employees in certain provinces or territories to five paid sick days, with an additional three for every year the company employs them. Canada's Labour Code includes three paid days after an employee works for a company for three consecutive months.

Supplemental health insurance

Many organizations offer employees supplemental private health insurance as a standard in their benefits package. This policy covers employees' medical treatments or expenses for a specific amount. Some employers extend this to the employee's family members, and some policies cover all medical bills when working for a company. Additional health-related insurance an employer can offer includes:

  • Dental insurance: This type of insurance is one of the most popular employee benefits. It enables employees to visit a dentist or other dental professionals to receive emergency and preventive teeth treatment.

  • Vision insurance: Typically, this is an additional benefit to a health insurance plan that allows an individual to find vision care and get glasses or contact lenses for a lower price. Vision insurance benefits might also apply to an employee's spouse or children.

  • Medication insurance: Without coverage from an employer, many employees pay full price for their medication, which can get expensive. Medication insurance can help employees pay a reduced price for their or family members' medicine.

  • Paramedical insurance: Paramedical includes services such as physical therapy, massage therapy, and chiropractors, which the country's public plan generally doesn't cover. Not many employers offer paramedical insurance, so it can benefit an organization to provide this for employees.

Personal leave

Employees can receive personal leave after working in the same position for three consecutive months. Employers are required to pay for the first three days of the employee's leave. Personal leave allows individuals to take off time for important tasks, such as caring for sick family members. Employers cannot punish an employee for using the entire amount of their personal leave.

Employee assistance programs

Employee assistance programs (EAP) are essential additions to an employee benefits package. They provide various services, such as general mental health support or short-term counselling. Many employees value it when employers care about their mental health, and EAP can help an employee if they're experiencing personal difficulties.

Bereavement leave

When an employee's immediate family member passes away, the federal government provides them with a minimum of five days' leave. Employers are required to pay for three days. These minimums apply after an employee works for an employer for at least three consecutive months.

Disability insurance

There are two forms of disability insurance that employers can provide. These are short- and long-term disability insurance. Many describe short-term insurance as when employees take between three and six months off from work and long-term as 12 months and above. Short-term disability provides employees with a percentage of their income if they cannot work because of a short-term illness, condition, or injury. In contrast, long-term disability provides part of an employee's income in the case of a condition or injury that causes them to miss work for a significant period.

Related: What Is Short-Term Disability? (With Conditions and FAQS)

Holiday pay

Employees throughout the country can receive compensation for specific public holidays. The holidays covered vary by area. Employees are eligible to use their holiday pay benefits from the first day of their employment.

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