SECTION 5
COMPENSATION CONCEPTS

The total compensation of any employed individual or the total payroll cost of an employee is made up of two major segments — salary and benefits. Payroll costs do not include office space, secretarial help, insurance etc., which are created or added to when an employee is on or added to the payroll.

Salary is also made up of two parts - regular salary and overtime compensation (some employers do not provide overtime compensation). Figure 13 summarizes data obtained from the 2003 Employer Salary Survey regarding overtime compensation.

The benefit segment is made up of two parts - the time-not-worked benefits and what might be called the general benefits. Details of what is included in each segment are provided in Employee Benefits which follow.

The percentage (of the total compensation) proportions given in Figure 14 are averages which reflect values for 2003. No given company (or employee) will exactly match these.

EMPLOYEE BENEFITS

There is a wide variation of practice and opinion as to what should be classed as an employee benefit. The definitions described below have been used in this publication.

1. Quoted Yearly Salary or Base Salary

Pay for time worked at normal rates plus the cost of the time-not-worked benefits. Quoted yearly salary does not include payment of overtime.

2. General Benefits

A payment by the employer to the employee directly or to a third party on behalf of the employee to secure for the employee, an advantage or protection of benefit to the employee.

Provision by the employer or the making available of (at no or reduced cost) some facility, object or service of benefit to the employer.

(a) Cash Benefit Payments made by the employer on behalf of the employee for:

i) pension or superannuation provisions.
ii) a hospital, medical, dental, sickness, disability, life, income maintenance, etc., plan.
iii) the Canada Pension Plan, Unemployment Insurance, Workers' Compensation plans (compulsory in Alberta).
iv) termination or severance pay, the premium portion of premium pay, relocation assistance.

(b) No Cash Benefit Provision by the employer, at no or reduced cost to the employee, of: recreation facilities and/or equipment, food, lodging, loans, parking, transportation, educational opportunities, discounts on company products, etc.

3. Time-Not-Worked Benefits
(payments made by the employer to the employee for time not worked)

This is included as part of the Quoted Yearly Salary.

(a) For Monthly or Yearly Paid Employees:
Time off from work (the employee does not have to be at the place of work), or periods when the employee is at work but not working and for which there is no reduction to the quoted yearly salary.

(b) For Hourly Paid Workers:
Payments in lieu of holiday days and vacation days.

(c) Holiday Days
Includes the nine statutory (also called general) holidays in Alberta and declared holidays which may be declared by federal, provincial or municipal authorities (but they become a work holiday only if the employer so declares).

i) Statutory Holidays: New Year's Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Remembrance Day, and Christmas Day.
ii) Declared Holidays: Boxing Day and Heritage Day.

(d) Vacation Days

(e) Other Days and/or Periods Sick Leave not covered by 2 (a)ii, travel time, clean-up time, rest and/or coffee periods, personal leave (jury duty, voting, bereavement, maternity, paternity, etc.).

EMPLOYER SALARY SURVEY COMPENSATION DATA

The APEGGA survey collected additional information on other compensation provided to employees. (see Figures 13, 14 and 15). This data indicated 98% of the organizations provide a comprehensive benefits package which includes dental, drug, long-term disability, life/accident insurance and medical plans. At least 74% of employers offered some form of pension plan.

Additional cash compensation was disbursed to approximately 42% of the engineers, 82% of the geologists and 87% of the geophysicists. Figures 15 reports other details on cash compensation.

Information from the survey pertaining to weekly hours of work and overtime compensation are reported in Figures 12, 13, 14, and 15. Vacation entitlement data is report in Figure 16.