Employee Benefit Plans in Canada
So you’ve started a new job. And it’s been a while since you’ve been to the dentist. You’ve never had a massage and are wondering if it’s really as relaxing as you’ve heard. Plus you’ve got a prescription you’ve been meaning to fill but have been holding off because of the cost.
But now! Now you are employed. Now you will have benefits that cover these healthcare costs, right?
Do employers have to provide benefits to their employees?
There are some legislated benefits which your employer must provide, specifically:
- Employment Insurance (both you and your employer must pay into this)
- Canada Pension Plan (both you and your employer must pay into this)
- Workplace Insurance Coverage (requirements and premiums for this coverage vary by industry)
However, any additional benefits, such as health insurance, a dental plan or life insurance, are at your employer’s discretion to provide.
Benefits are often an important part of a competitive compensation package to attract the top talent to your business. Health and dental insurance are some of the perks that come with employment for many, but not all, Ontario workers.
Further examples of benefits an employer may choose to provide include:
- Retirement and pension benefits
- Termination benefits
- Disability, sickness and accident benefits
- Medical, hospital, drug or dental benefits
- Vision care
- Life insurance
- Flexible work arrangements
- Education and training
Benefit Plans and the Employment Standards Act
If your employer does choose to provide benefits, they must comply with the Employment Standards Act (ESA)’s rules against discrimination. The ESA’s anti-discrimination rule prohibits employers from discriminating in their benefit contribution requirements and benefit payments between employees, dependants or beneficiaries on the protected grounds of age, sex or marital status.
Benefits can, however, be varied among employees without being discriminatory if they are based on tenure. Furthermore, it is possible to provide different classes of employees (i.e. office workers and heavy machinery operators) with different benefit packages based on their needs.
While there are some complex exceptions to these rules, employers should be cautious and consult with an employment lawyer before providing different benefit plans between their employees.
Cost of Benefit Plans
Employers should carefully consider and define each benefit they choose to provide to their employees. Benefit plans can be costly – up to 30% of payroll for large companies – and cutting back on employee benefits, even in times of economic downturn, can be cause for constructive dismissal. Therefore, employers should carefully consider what types of benefits matter most to their employees and what they can afford.
Interaction Between Benefit Plans Leaves of Absence
All employees have the right to continue contributing to and participating in benefit plans when they take any job-protected leave of absence including pregnancy and parental leave, personal emergency leave or sick leave.
Benefit plans are an excellent way to attract top talent and ensure that your employees are healthy and productive. They can, however, be costly and choosing the right plan for your employees can be difficult. Consult with KCY at LAW to better understand your legal rights and obligations.