Employee benefits, Unemployment insurance and workers compensation

Employee benefits also known as fringe benefits are non-wage compensations provided by the employer exclusive of their normal earnings. These benefits differ from country to country depending on the country’s laws. Employee benefits are not counted as part of salary or wages earned by the employees and are provided to the employees in exchange for their contribution towards the organization. Common examples of employee benefits include leave pays, health insurance, pensions, stock options, vacation fees among others.

Besides these benefits, which are referred to as tangible ones, there are other intangible benefits like promotions, or employer’s oral appreciation. In addition to employees’ benefits, there is worker’s compensation that has been made a legal requirement and therefore every employer is required by the law to comply that includes salaries, wages and tips. These compensations are direct payments to employees for the job they have done (Lohr 43).

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Employee benefits motivate employees and improve their productivity towards their organizations. Studies have indicated that organizations that offer good employee benefits tend to retain workers easily than those offering poor benefits. Employee benefits serve as saving schemes to employees for instance retirement benefits and provide financial security to retired employees and their families (Bojas 75). There are several ways through which employee benefits are provided or implemented.

They can be through group insurance plan whereby the concerned parties make their contributions jointly, retirement plans initiated, or benefits are automatically determined by the employer based on their policies. Group insurance plan is renewed on an annual basis and is cheaper for an individual’s working career. There is also universal life insurance that incorporates both insurance and saving components.

Upon the maturity of the agreed period, the person is given his savings plus accrued interests and therefore these schemes are more of an investment than insurance. There are group disability-income insurance schemes paid on a weekly or monthly basis as long as the individual was contributing premiums up to hi/her death. They are either short-term or long-term. Some organizations have introduced cafeteria plans that help employees to choose the benefits that best suit their requirements.

Unemployment Insurance

In some industrialized countries, governments have introduced special unemployment insurance that refers to weekly or monthly cash benefits to workers who are involuntarily unemployed. In United States, it is known as unemployment compensation. It is usually given to those unemployed people who cannot find available jobs and are willing to work to enable them earn their living (Bojas 34).

This is because unemployment is termed as a fundamental risk and the fact that it cannot be insured. In most cases, these programmes are state based since commercial insurance is not able to cover them. The objectives of putting up these programmes are to ensure basic human needs are adequately met for the maintenance of peace and order in the society.

These programmes also help to provide income to those individuals that are involuntarily unemployed in the short-run. Other objectives are to encourage government and other employers stabilize employment opportunities for the people hence creating jobs for the unemployed workers and economic stabilization during hard economic times i.e. recession and depression.

Unemployment insurance covers all the private organizations, central government, local authorities as well as non-governmental organizations. There are well down laid procedures, systems and norms for their administration and coverage. However, proper eligibility criteria must be established to determine who qualifies to be an unemployed worker. Periodic cash benefits are given as per the pre-determined formula.

Workers Compensation

Sometimes workers may be injured in their job places or even fall sick while still at work. In other instances, an employee may even die due to job related accidents (Bojas 34). These are risk factors and workers need to be assured of some forms of compensations incase of contingencies before undertaking their jobs because economic insecurity might arise.

In such cases, workers are compensated through social insurance programmes to provide medical care or cash benefits to the victims. Laws have been enacted to ensure that fairness and justice prevails to those who fall sick or get injured at their work places. These also address the disabled workers and prevent employers from intimidating their employees (Lohr 43). One of the objectives of these programmes is to provide a comprehensive cover for job related misfortunes.

They also protect employees against any possible loss of income. Disputes between employers and employees are reduced and people’s safety properly guaranteed. The specific employees’ compensation law provides for several benefits that an employee is entitled to for instance medical care, death benefits among others. Disabled people have to be recognized in the society and their presence appreciated by providing relevant benefits to them.

They might be temporarily disabled or permanently disabled and some weekly cash benefits need to be paid to them. All the three discussed social welfare programmes are what differentiates good employers from bad ones (Lohr 43). Employers that implement appropriate packages for employee benefits and workers’ compensations have had good performance and reputable images due to higher attraction of employees.

Works cited

Bojas George J. Labor Economics. New York, NY: McGraw-Hill, 2002.

Lohr, Kathy. Unemployed without benefits: A Couple’s Struggle. National Public Radio. Accessed on May 6, 2011 from http://www.npr.org/templates/story/story.php?storyId=99170822.


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