Introduction

Understanding the real competitive value of your benefits program is critical in making the right decisions about the most effective way to invest in your benefits to attract, retain and engage employees. Why not leverage your existing benefits spend to create a program that meets employee needs and enhances your employer value proposition and brand?

An effective employee benefit program will accomplish a few targeted goals. First, it will provide financial protection for employees and their families in the event of illness, disability, death, or unemployment. Second, it will promote positive employee morale and support the productivity of the company as a whole. Finally, it should act as a recruitment tool that will attract and keep quality talent, without costing your firm more than it’s worth. For many business owners, designing a benefit program that meets all of these criteria is a difficult task indeed.

Advantage: Slide 1

Providing employee benefits is not easy. Yet it is very satisfying, both to the employees and to the company.

A study says that, “A happy Employee is a Productive Employee” they found out that mood affects the behaviour of an employee towards his work. Happiness increases productivity. Other benefits are, it increases motivation, reduces absenteeism, and increases having top talents, and retention of employees, and reduces turnovers and resignations.

Advantage: Slide 2

Competitiveness also increases once an employee knew that there is an additional benefit waiting for him once he got promoted. It also saves money of the company in terms of providing/offering stock options in lieu of promotion.

Last benefit advantage we have on our slide is that, it provides financial protection for the employee’s family. Because they know that they are protected with such benefits like, SSS, Pension plans, and health benefits plan.

Disadvantages: Slide 1

Providing employee benefits not just give a positive response to the organization especially to its administration. It may sometimes lead to misunderstanding and lawsuits. So aside from advantages, there are also disadvantages of employee benefits. One of them is; it becomes a standard for competitiveness. It simply states that, providing employee benefits becomes a standard for organization’s competitiveness. The benefits which are commonly used by organizations are the standards of being competitive. And that matter becomes a disadvantage especially to the baby companies or small companies. Second is that, giving benefits are costly. Also especially to small companies. Because not all benefits requires contribution from the employees, some companies need to provide a benefit package for its employee for free; that also linked to being competitive. Third; some benefits plan are not for everyone. Some benefits are for only a group of employees and some are for individuals only.

Disadvantage: Slide 2

And last, mistakes/faults/misunderstandings may lead to lawsuits or regulatory fines. Whenever you make an employee benefits plan, be careful about entering into a contract in which you sense a negative vive towards your counter party. A fraud is getting normal nowadays, people tend to do bad things just to fulfil their everyday needs.

Step 1

Begin your employee benefit program by including the basic, federally mandated employee benefits. These benefits include unemployment insurance, workers compensation insurance, and social security. Businesses in the United States must provide at least these three benefits to ensure employee protection in cases of unemployment, injury, or disability.

Step 2

Consider what optional benefits are necessary to include. You will find that certain optional benefits have become industry standards and you will have significant difficulty hiring or retaining talented staff without these benefits. For example, health insurance, life insurance, paid and sick leave programs, retirement plans, and flexible compensation plans have all become staples of benefits plans in many industries.

Consider adding additional benefits to your program. Once your employee benefits program includes the basics, you’ll want to evaluate benefits like tuition reimbursement programs, flexible spending accounts, child care subsidies, retail discount programs, telecommuting options, legal insurance, bonus plans, and fitness or wellness programs. These programs will often provide an additional edge in increasing employee morale and reducing your employee turnover rate.

Evaluate what benefits are most important to your employees. You will need to survey your employees or potential employees to find out what benefit types hold the most value for them. For example, part-time retail employees will typically value a greater percentage discount for employee purchases over a sales-based bonus plan, while a company that employs a large number of working parents might find greater value in a child care subsidy benefit.

Step 3:

It is very important for your employee to know what kind of benefits you would want them to have. Because misunderstandings may lead to lawsuits or trust issues. As a manager, you need to make sure that your employee will fully understand what you want to give them. Especially those benefits that may require them to contribute a part of their salary. Always remember that misunderstanding will affect the employee’s morale. So, to effectively propose a benefit plan, consider having a seminar series. Chunk your discussion to seminars for you and your employee have a question and answer time. Until then, you can make sure that they fully understand your proposal.

Step 4:

Once your employees agreed to your benefit plan, it is now the time for you to test it. Continue monitoring their reactions towards it then have an evaluation(from at least a year since you started the benefit plan). What are their reactions? Does it affect their morale? How about their performance? It is very important for you to evaluate because there may be an error or a room for a change. That will help you even grow in your organization and eventually help your organization achieve its VMGO.

Step 5:

Give your Chief Financial Officer a financial report regarding your benefit plan. What happen to the company’s net income? Until your CFO gives his insight whether your benefit plan must continue or not, always make sure to think positive and continue delighting your employees. Because, a happy employee is a productive employee.

Job Street.com Survey:

To further make YOU believe that providing employee benefits really helps your organization to grow, attract and retain top talents, here is a survey form JOBSTREET.COM. These companies are the fantasies of most applicants because of some reasons.

San Miguel Corporation, SM Investments, and Accenture topped the 3 most preferred companies to work for. And the number one reason is because of the employee benefits. Salary and compensation is only second.

Slide 3 of the survey:

In fact, benefits and incentives, including “performance-based bonuses” health insurance, retirement pay, and “car and housing loans” was listed as the most popular element considered in most employees of different work levels starting from junior to executive.

Google Company

Not yet convinced? The last two slides are the employee benefits of GOOGLE Co. aside from free gourmet food, free haircuts and many more, GOOGLE also provides a DEATH BENEFIT. It states that, when a “googler” died, his survivors will receive half of his net income every year until the next decade. After hearing such good news from GOOGLE, many top talents went to apply.

MANDATORY BENEFITS OF EMPLOYEES

1. MINIMUM WAGE

Under the Philippines’ minimum wage law, the minimum wage rate varies from one region of the Country to another and is set by the relevant Regional Tripartite Wages and Productivity Board. Under The most recent wage order for the National Capital Region (i.e., Metro Manila), effective 1 November2012, the minimum gross basic wage is PHP426 per day plus cost of living allowance of PHP30 per day.

The Lowest wage rate fixed by law that an employer can pay his Employees. Paying less than the minimum wage is illegal. The employer cannot exempt himself from liability to pay minimum wage because of poor financial condition of the company, the payment of minimum wages is not dependent on the employer’s ability to pay.

CHAPTER IIMINIMUM WAGE RATESART. 99. REGIONAL MINIMUM WAGES.

2. WORK HOURS AND OVERTIME

The normal hours of work should not exceed eight hours a day. An employee who renders work in excess of eight hours a day is entitled to overtime pay equivalent to the applicable wage rate plus at least 25 percent thereof. The overtime rate will vary if the overtime work is rendered on a rest day, regular holiday or special day or during the period between 10 p.m. and 6 a.m. of the following day. However, certain classes of employees (called “exempt employees” in this publication) are not entitled to such overtime pay, namely:

Entitlement of employees to overtime pay depends on the nature of their duties and responsibilities. IfThe employees’ duties and responsibilities do not qualify them as exempt employees; they are entitled to overtime pay. Conversely, should these employees’ duties and responsibilities qualify them as exempt? Employees, they are not entitled to overtime pay. Furthermore, employers may not require employees to perform overtime work except in certain cases and provided appropriate compensation is paid. In practice, they ask employees to sign employment contracts where the employees agree to perform overtime work.

For purposes of this Article, "health personnel" shall include resident physicians, nurses, nutritionists, dieticians, pharmacists, social workers, laboratory technicians, paramedical technicians, psychologists, midwives, attendants and all other hospital or clinic personnel.  shall hold regular office hours for eight (8) hours a day, for five (5) days a

week, exclusive of time for meals, except where the exigencies of the service require that such personnel work for six (6) days or forty-eight (48) hours, in which case, they shall be entitled to an additional compensation of at least thirty percent (30%) of their regular wage for work on the sixth day.

3. NIGHT SHIFT DIFFERENTIAL

This refers to additional compensation of at least 10 percent of an employee’s applicable wage rate, payable to employees (except exempt employees) who perform work between 10 p.m. and 6 a.m. of the following day.

4. REST DAY

An employer may require its employees to work six days per week. Employees, except exempt

Employees, are entitled to a rest period without pay of not less than 24 consecutive hours for every sixConsecutive normal working days.

The employer shall determine and schedule the weekly rest day of his employees subject to collective bargaining agreement and to such rules and regulations as the Secretary of Labor and Employment may provide. However, the employer shall respect the preference of employees as to their weekly rest day when such preference is based on religious grounds.

Art. 92. When employer may require work on a rest day. The employer may require his employees to work on any day:

In case of actual or impending emergencies caused by serious accident, fire, flood, typhoon, earthquake, epidemic or other disaster or calamity to prevent loss of life and property, or imminent danger to public safety;

For work done on rest days, the employer should pay compensation equivalent to the applicable wage rate plus at least 30 percent thereof. The rate for work on a rest dayWill vary if the rest day work is rendered on a regular holiday or a special day or during the periodBetween 10 p.m. and 6 a.m. of the following day. Moreover, employers may not require employees to work during their scheduled rest day except in certain cases and provided appropriate compensation is paid. In practice, they ask employees to sign employment

contracts where the employees agree to perform work outside their normal work schedule.

5. REGULAR HOLIDAY

January 1, Thursday – New Year’s Day April 2 – Maundy Thursday April 3 – Good Friday April 9, Thursday – Araw ng Kagitingan May 1, Friday – Labor Day June 12, Friday – Independence Day August 31, Monday – National Heroes Day November 30, Monday – Bonifacio Day December 25, Friday – Christmas Day December 30, Wednesday – Rizal Day

Every worker shall be paid his regular daily wage during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers;

The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate.

6. SPECIAL NON-WORKING HOLIDAYS

February 19, Thursday – Chinese New Year April 4 – Black Saturday August 21, Friday – Ninoy Aquino Day November 1, Sunday – All Saints Day January 2, Friday – Special non-working day December 24, Thursday – Special non-working day December 31, Thursday – Last day of the year

Every employer should pay its employees, except exempt employees, their regular daily wage for anyUnworked regular holiday. When an employer asks a non-exempt employee to work during a regularHoliday, the employee should receive at least 200 percent of the applicable wage rate on the said regular Holiday.

Employees who are not required to work on these special days are not by law entitled to compensation. Work performed on these days by non-exempt employees, however, merits compensation equivalent to the applicable wage rate plus at least 30 percent thereof. If the special day also happens to be the non-exempt employee’s scheduled rest day, the premium rate is increased to at least 50 percent of the applicable wage rate. The rate for work on a special holiday will vary if the special holiday work is rendered during the period between 10 p.m. and 6 a.m. of the following day.

7. SERVICE INCENTIVE LEAVE

Except for exempt employees, every employee who has rendered at least one year of service is entitled to a yearly service incentive leave (which is commonly replaced by vacation leave) of five days with pay. The service incentive leave should be converted to its money equivalent and paid to the non exempt employee by the employer if not used or exhausted by the said employee at the end of the year. As a general rule, an employer can regulate the schedule of the service incentive leave of its employees.

8. MEAL PERIOD

An employer must give its employees at least one hour non-compensable time-

off for regular meals. However, an employer is allowed to give employees a meal

break of less than one hour in certain cases. In any of these cases, the shorter

meal period must be considered as compensable hours worked and must not, in

any case, be less than 20 minutes.

9. PRIVATE RETIREMENT BENEFIT

An employee is entitled to receive such retirement benefits as he may have

earned under existing laws and any collective bargaining agreement and other

agreements. However, an employee’s retirement benefits under any collective

bargaining and other agreements shall not be less than those provided by the

Labor Code.

In the absence of any provision on optional retirement in a collective bargaining

agreement, employer’s retirement plan or any other agreement, an employee

(except an underground mining employee) has the option to retire and receive

retirement pay upon reaching the age of 60 years or more, provided he has

served at least five years with his employer.

When the employee (who is not an underground mining employee) reaches the

compulsory retirement age of 65 years, his employer may retire him and pay him

retirement pay. In the case of underground mining employees, they may retire

and receive retirement pay upon reaching 50 years of age and completing five

years of service to their employer, and their employer may retire them and pay

them retirement pay when they reach 60 years (which is the compulsory

retirement age for underground mining worker)

An eligible retiring employee is entitled to retirement pay equivalent to at least his

half-month salary for every year of service, a fraction of at least six months of

service being considered as one whole year.

The term “half-month salary” generally includes the 15-day salary of the

employee based on his latest salary date, cash equivalent of five days of service

incentive leave, 1/12 of the 13th month pay due the employee, and all other

benefits that the employer and employee may agree upon to be included in

computing the retirement pay.

10.MATERNITY LEAVE

Every qualified pregnant woman in the private sector is entitled to maternity leave

of 60 days in case of normal delivery, abortion or miscarriage, or 78 days in case

of caesarean delivery. During such leave, the pregnant woman shall receive daily

maternity benefit equivalent to 100 percent of her average salary credit for 60 or

78 days, as the case may be. The maternity benefits shall be paid only for the

first four deliveries or miscarriages.

The employer is required to advance to the pregnant female employee the full

maternity benefit within 30 days from the filing of the maternity leave application.

The Social Security System (SSS) shall immediately reimburse the employer 100

percent of the amount of maternity benefits advanced to the employee upon

receipt of satisfactory proof of such payment and legality thereof.

11.PATERNITY LEAVE

Paternity leave benefit is granted to all married male employees, regardless of

employment status (e.g., probationary, regular, project). It applies to the first four

deliveries of the employee’s lawful wife with whom he is cohabiting. The leave

shall be for seven days, with full pay, consisting of his basic salary, provided that

his pay shall not be less than the mandated minimum wage. In the event the

paternity leave benefit is not availed of, said leave is not convertible to cash.

12.PARENTAL LEAVE

In addition to leave privileges under existing laws, parental leave of not more

than seven working days every year shall be granted to any solo parent

employee as defined in the law who has rendered service of at least one year. A

change in the status or circumstance of the parent claiming parental leave

benefit, such that he or she is no longer left alone with the responsibility of

parenthood, shall terminate his other eligibility for this benefit.

13.LEAVE DUE TO DOMESTIC VIOLENCE

A victim of violence against women and their children who is employed is entitled

to paid leaves of up to 10 days in addition to paid leaves under other laws,

extendible when the necessity arises as specified in a protection order issued by

an appropriate authority. The a ailment of the 10-day leave is at the option of the

female employee, and such leave shall cover the days that the employee has to

attend to medical and legal concerns. Unused leaves are not cumulative and not

convertible to cash.

14.LEAVE DUE TO GYNAECOLOGICAL DISORDERS

Women employees who have rendered continuous aggregate employment

service of at least six months for the last 12 months are entitled to the special

leave benefit of two months with full pay following surgery caused by

gynaecological disorders.

15.13TH MONTH PAY

All “rank-and-file” employees of employers covered by the Revised Guidelines on

the Implementation of the 13th Month Pay Law are entitled to a bonus called

“13th month pay,” regardless of the amount of their monthly basic salary, their

designation or employment status, and the method by which their salary is paid,

provided they have worked for at least one month during a calendar year.

The 13th month pay of a rank-and-file employee should be equivalent to at least

1/12 of the total basic salary that the employee earned within a calendar year.

The required 13th month pay should be paid not later than 24December of each

year. Nonetheless, an employer may give its rank-and-file employees half of the

required 13th month pay before the opening of the regular school year in June

and the other half on or before 24 December. The frequency of payment of the

13th month pay may also be the subject of an agreement between the employer

and the collective bargaining agent of its rank-and-file employees.