Comparing employee benefits in the public and private sectors.
While employee benefits are an important part of the compensation package for all workers, the characteristics of the benefit programs vary considerably between the private and public sectors. Differing employer and employee needs affect the types and characteristics of benefits received.
This article compares the incidence and administration of employee benefits for full-time full-time
Employed for or involving a standard number of hours of working time: a full-time administrative assistant.
full employees in the private and public sectors, and examines the characteristics of work schedules and paid leave plans. Accompanying articles appearing in this issue of the Review compare other private and public sector benefits-employer-sponsored health and life insurance and disability benefits, and defined benefit pension plans and defined contribution plans Defined contribution plan
A pension plan whose sponsor is responsible only for making specified contributions into the plan on behalf of qualifying participants. Related: Defined benefit plan (such as savings and thrift thrift: see leadwort. , profit-sharing profit-sharing
a system in which a portion of the net profit of a business is shared among its employees
profit-sharing n → participación f de empleados en los beneficios , and stock ownership plans). Taken together, these articles represent a current, comprehensive look at benefits provided to employees in medium and large firms in private industry and in State and local governments.
The data are from the Bureau of Labor Statistics' annual Employee Benefits Survey.' They show that:
* Paid vacations Noun 1. paid vacation - a vacation from work by an employee with pay granted
holiday, vacation - leisure time away from work devoted to rest or pleasure; "we get two weeks of vacation every summer"; "we took a short holiday in Puerto Rico" are granted to nearly all full-time employees in medium and large firms in private industry, compared with about three-fourths Noun 1. three-fourths - three of four equal parts; "three-fourths of a pound"
common fraction, simple fraction - the quotient of two integers of those employed by State and local governments, Teachers are the least likely of public employees to receive paid vacations; police and firefighters, the most likely. Private firms generally provide many single-purpose types of leave (such as separate vacation and personal leave plans); State and local govemments are more likely to provide a multiple-purpose annual leave plan.
* Defined benefit pension plans for State and local government workers, which are often jointly financed by employers and employees, provide more generous benefits than do plans in the private sector, which typically are financed by the employer only. However, private sector pensions are almost always accompanied by Social Security benefits. In the public sector, approximately one-fourth of pension plan participants Plan participants
Employees or other beneficiaries who are eligible to receive benefits from a company's employee benefit plan. work for jurisdictions not in the Social Security system.
* Participation in health maintenance organizations (HMO'S) is more prevalent prevalent
widespread occurrence. among public employees. Concentrations of public sector employers in metropolitan areas, where HMO'S are widely available, may help to explain civil servants' greater participation in these prepaid pre·pay
tr.v. pre·paid, pre·pay·ing, pre·pays
To pay or pay for beforehand.
pre·payment n. health plans.
The Bureau of Labor Statistics' Employee Benefits Survey, begun in 1979, initially looked exclusively at benefits in medium and large firms in private industry. The survey coverage mirrored that of the Bureau's National Survey of Professional, Administrative, Technical, and Clerical Pay (PATC PATC Potomac Appalachian Trail Club
PATC Primary Area of Technical Competence
PATC Product Assurance Training Curriculum
PATC Previously Active Trouble Code
PATC Pan African Theological College
PATC permission à titre de convalescence
PATC Page Address Translation Cache survey), yielding both pay and benefits data. In 1987, for the first time, the Employee Benefits Survey focused on benefits in State and local governments. both the private and public sector surveys, geographic coverage is limited to establishments in the 48 contiguous Adjacent or touching. Contrast with fragmentation. See contiguous file. States.
The Employee Benefits Survey provides information on the incidence and characteristics of paid leave, insurance plans, defined benefit pension plans, defined contribution plans, flexible benefits arrangements, and work schedules. Eligibility (but not details of plan provisions) for several additional benefits, such as severance pay Severance Pay
Compensation that an employer gives to someone who is about to lose their job.
Severance pay is not always paid to employees. It depends on the situation in which the employee is losing their job and whether legislation requires severance to be paid. and employersubsidized parking, is also provided. With a few exceptions, the survey is limited to benefits financed at least in part by employers. It is constantly revised in an effort to keep abreast Verb 1. keep abreast - keep informed; "He kept up on his country's foreign policies"
keep up, follow
trace, follow - follow, discover, or ascertain the course of development of something; "We must follow closely the economic development is Cuba" ; "trace the of new developments in employee benefits plans.
Private sector survey. During the 1979-86period, when medium and large firms in the private sector were surveyed, the industrial coverage included manufacturing; mining; construction; transportation, communications, electric, gas, and sanitary sanitary /san·i·tary/ (san´i-tar?e) promoting or pertaining to health.
1. Of or relating to health.
2. services; wholesale trade; retail trade; finance, insurance, and real estate; and selected services. The minimum number of employees required for an establishment to be surveyed varied by industry, ranging from 250 employees in mining, construction, and other industries to 50 employees in accounting service firms. The survey covered about 21 million workers.
Employees are grouped into three broad occupational categories-professional and administrative, technical and clerical, and production-to capture possible occupational differences in benefit plan availability and design. The first two occupational groups are often characterized char·ac·ter·ize
tr.v. character·ized, character·iz·ing, character·iz·es
1. To describe the qualities or peculiarities of: characterized the warden as ruthless.
2. as white collar, while production employees are referred to as blue collar. The data refer to all employees, unless differences among occupations warrant a more detailed treatment.
Public sector survey. The 1987 survey covered State governments and local governments classified as either administrative units Noun 1. administrative unit - a unit with administrative responsibilities
Inland Revenue, IR - a board of the British government that administers and collects major direct taxes , school districts, health services health services Managed care The benefits covered under a health contract , or special districts, such as water and sewer SEWER. Properly a trench artificially made for the purpose of carrying water into the sea, river, or some other place of reception. Public sewers are, in general, made at the public expense. Crabb, R. P. Sec. 113. authorities and regional transit operations. Minimum employment for local government units was 50 employees. The entire State government was considered a single unit for sampling purposes; thus, both administrative units and other units, such as State university systems and hospitals, were included. The study provides representative data for 10.3 million full-time workers in State and local governments, approximately three-quarters Noun 1. three-quarters - three of four equal parts; "three-fourths of a pound"
common fraction, simple fraction - the quotient of two integers
three-quarters npl → of the State and local government work force.
To reflect differences in benefit plans, employees in State and local governments were classified as either "regular" employees, teachers, or police and firefighters. Regular employees are all workers except teachers or police and firefighters. Because of benefit differences among these occupations, the discussion compares the plans available to each group of these State and local government employees .
Incidence of benefits
When comparing benefit practices between public and private sectors, one must consider groups of benefits: whether workers receive a particular benefit often depends upon what other items they are receiving.' For example, only 14 percent of public sector workers receive sickness SICKNESS. By sickness is understood any affection of the body which deprives it temporarily of the power to fulfill its usual functions.
2. Sickness is either such as affects the body generally, or only some parts of it. and accident insurance, but these workers are almost universally covered by paid sick leave, which reduces the need for such insurance.
Health insurance, one of the benefits studied in detail by the Employee Benefits Survey, shows practically no variation by sector. About 95 percent of employees in private industry in 1986, and 94 percent of those in State and local government in 1987 had health insurance coverage. (See table 1.) Life insurance is provided to 96 percent of private sector employees, while in the public sector, 91 percent of police and firefighters and just over 80 percent of teachers and regular workers are covered. Participants in public sector pension plans are often eligible for lump-sum death benefits, which make up for the lower incidence of life insurance.
Any investments with a maturity of one year or less.
1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. disability coverage is similar in both sectors-94 percent of private sector employees and 97 percent of public sector employees participate. But, as noted earlier, the method of providing benefits differs considerably. Long-term Long-term
Three or more years. In the context of accounting, more than 1 year.
1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. disability insurance is most common among white-collar private sector employees; in contrast, blue-collar private sector employees and public sector employees often have pension plans that provide disability coverage after short-term disability benefits have been exhausted.
Defined benefit pension plans, which specify a formula for determining the recipient's benefit, are provided to more than 9 of 10 workers in State and local governments and to 3 of 4 employees in medium and large firms in private industry. The incidence of these plans in the private sector has declined from 83 percent of employees in 1980. In their place, defined contribution plans (such as savings and thrift and profit-sharing plans Profit-Sharing Plan
A plan that gives employees a share in the profits of the company. Each employee receives into an account, a percentage of those profits based on their earnings. Also known as "deferred profit-sharing plan" or "DPSP". ), which specify the contribution of the employer but do not guarantee a benefit, have grown in popularity as a source of retirement income and capital accumulation Most generally, the accumulation of capital refers simply to the gathering or amassment of objects of value; the increase in wealth; or the creation of wealth. Capital can be generally defined as assets invested for profit. . Few defined contribution plans are found in the public sector.
Paid time off can range from a few minutes for a coffee break to several weeks of vacation. These benefits vary significantly among occupations and between the private and public sectors; often, unusual work schedules necessitate ne·ces·si·tate
tr.v. ne·ces·si·tat·ed, ne·ces·si·tat·ing, ne·ces·si·tates
1. To make necessary or unavoidable.
2. To require or compel. unique time-off provisions, as for teachers. Paid holidays and vacations are widely provided to all workers except teachers, who are often employed by contract for a fixed number of days, and whose stated pay is based on the contracted days. In contrast, personal leave, available to an employee for any reason, is provided to nearly threefifths of the teachers; about one-third of the remaining public sector employees and one-third of the white-collar private sector employees receive such leave. Only 15 percent of the blue-collar workers blue-collar worker n → obrero/a
blue-collar worker n → ouvrier/ère col bleu
blue-collar worker n → in the private sector have personal leave provisions.
Formal paid rest time is most commonly provided to blue-collar workers in the private sector and regular employees in the public sector; such rest time is least common among teachers, whose daily schedules often do not allow for such a break. Paid lunch time is not usual for any of the worker groups, but is most prevalent among teachers and police and firefighters. Paid time off for jury duty is provided to nearly all employees; military leave is more common among public sector workers, except teachers; and formal paid funeral leave is more common in the private sector.
Additional benefits. In addition to providing data on the incidence and characteristics of paid time off, insurance, and retirement and capital accumulation plans, the Employee Benefits Survey gathers information on the incidence of a number of other benefits. The survey measures the number of workers eligible for each of these benefits, whether or not employees actually use the benefits. Twelve benefits were studied in the surveys of medium and large firms in private industry in 1985 and of State and local governments in 1987. Benefits typically found in only one of the sectors-such as sabbatical leave Noun 1. sabbatical leave - a leave usually taken every seventh year
leave, leave of absence - the period of time during which you are absent from work or duty; "a ten day's leave to visit his mother" in the public sector or employee discounts in the private sector-are not discussed in this article.
For many of the benefits, incidence is greater in the private sector than in the public sector. (See table 2.) For example, severance pay is available to almost half of the employees in medium and large firms in private industry, but to fewer than 10 percent of State and local government employees. Other benefits occurring more frequently in the private sector include supplemental unemployment benefits, relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation.
2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. allowances, and travel accident insurance. The incidence of these benefits partly reflects the more uncertain nature of job security in private industry, compared with State and local governments, and the lack of need to move public employees to different locations, as is done in private firms.
Benefits that attempt to meet employees' personal needs are available to a small number in each sector. Employer-subsidized child care benefits, either an onsite facility or employer reimbursement Reimbursement
Payment made to someone for out-of-pocket expenses has incurred. of costs for an independent facility, are available to 2 percent of public sector employees and I percent of private sector employees. Similarly, financial counseling, prepaid legal services legal services n. the work performed by a lawyer for a client. , and subsidized sub·si·dize
tr.v. sub·si·dized, sub·si·diz·ing, sub·si·diz·es
1. To assist or support with a subsidy.
2. To secure the assistance of by granting a subsidy. commuting are available to about 10 percent or fewer of the employees. There appears to be little difference in the incidence of these benefits between the public and private sectors.
Employer-subsidized parking, either in an employer provided facility or through reduced rates in a commercial facility, is available to more than 70 percent of employees in both the public and private sectors. However, employers in major metropolitan areas, where parking facilities are scarce, often do not offer subsidized parking. Employerprovided recreation facilities, subsidized meals, and inhouse An operation that takes place on the user's premises. infirmaries are more common among private sector employees than public sector employees.
Amount of paid time off
Paid lunch time is not a common benefit, but is most often given to elementary and secondary schoolteachers, police and firefighters, and private sector blue-collar workers. Teachers are often required to remain on the school premises premises n. 1) in real estate, land and the improvements on it, a building, store, shop, apartment, or other designated structure. The exact premises may be important in determining if an outbuilding (shed, cabana, detached garage) is insured or whether a person during lunch, and may even have specific duties, such as monitoring students. Similarly, the private sector blue-collar workers most likely to receive paid lunch time are those who are unable to leave the worksite, such as coal miners. Paid lunch time averaged just more than a half hour in the public sector, and just under a half hour in the private sector. (See table 3.)
Paid rest time includes coffee breaks and cleanup time. This benefit was counted if it was formal; that is, established provisions existed. Informal policies, which may be more common among white-collar workers white-collar workers, broad occupational grouping of workers engaged in nonmanual labor; frequently contrasted with blue-collar (manual) employees. American in origin, the term has close analogues in other industrial countries. , were excluded. A majority of private sector employees and regular public sector employees had formal paid rest provisions, usually two daily breaks of 10 to 15 minutes each. Teachers and police and firefighters, because of the nature of their work and unusual work schedules, were less likely to receive formal paid rest time.
Nearly all employees in all occupational groups, except teachers, received paid holidays. Teachers often were paid on the basis of the number of school days in a year, and were not considered by their school system as paid on holidays and other days off. In the private sector, employees most commonly received 10 holidays; public sector workers often received 11 or 12 holidays, the result of State and local observances.
One significant difference between public and private sector paid time-off benefits is in paid vacations. In the public sector, vacations are often considered "annual leave," time available for a variety of uses, including vacations. Annual leave plans often provide more days than do private sector vacation plans.
However, annual leave must be used for such personal matters as funerals, while private sector employees are more likely to have vacation and other leave policies .
Employees in establishments that require around-theclock staffing, such as hospitals, may be part leave bank" or receive "all-purpose all-pur·pose
Having many purposes or uses: an all-purpose thread.
useful for many purposes
Adj. 1. leave." These plans often combine holidays, vacation, sick leave, and other leave into one block of time off. Employees then coordinate Belonging to a system of indexing by two or more terms. For example, points on a plane, cells in a spreadsheet and bits in dynamic RAM chips are identified by a pair of coordinates. Points in space are identified by sets of three coordinates. their leave requests so that adequate staffing is maintained.
In both the private and public sectors, paid vacation days usually increase with length of service. The following tabulation tab·u·late
tr.v. tab·u·lat·ed, tab·u·lat·ing, tab·u·lates
1. To arrange in tabular form; condense and list.
2. To cut or form with a plane surface.
Having a plane surface. details the average number of days provided at selected service intervals for employees who participated in a vacation or annualleave plan: length of service increases. For the small percentage of teachers receiving a paid vacation, the number of days varied only slightly as years of service increased.
Paid personal leave allows employees time off for a variety of purposes. Teachers are the most common recipient of this benefit, perhaps because they seldom receive paid vacations. Personal leave plans typically provide 1 to 5 days per year. The average of 3.7 days per year in the private sector is about 1 day more than that of the public sector.
Separate formal funeral leave plans are more common in the private sector; public sector workers without such a plan may use annualleave for this purpose. Where plans are available, they most commonly provide 3 days of funeral leave per occurrence in both the public and private sectors. About 23 percent of private sector employees and 17 percent of those in the public sector were in plans that varied the number of days according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. the relationship of the employee to the deceased deceased 1) adj. dead. 2) n. the person who has died, as used in the handling of his/her estate, probate of will and other proceedings after death, or in reference to the victim of a homicide (as: "The deceased had been shot three times. .
Paid military leave was available to a majority of all employees in both sectors. On average, State and local government employees could receive just over 3 weeks of paid leave, while private sector employees could receive just over 2 weeks.
Paid time off for jury duty was almost universally provided to all employees. These plans usually provided leave as needed as needed prn. See prn order. , rather than specifying a fixed number of days.
For many years, employees worked 40 hours a week, usually in 5 days, with relatively few departures from this pattern. However, this schedule is gradually becoming less common, as flexible work hours and the need to have services provided at different times have reduced uniformity in working patterns. In the private sector, the 5-day, 40-hour week is still the most common, applying to 82 percent of all employees, including 90 percent of production workers. Those not on a 40-hour schedule generally work fewer hours; 13 percent of technical and clerical workers, for example, work 37.5 hours per week-7.5 hours per day.
In the public sector, two-fifths of the employees work fewer than 40 hours per week. Elementary and secondary schoolteachers and regular public sector workers were generally scheduled for 5 days, 35 or 37.5 hours. Scheduled hours for teachers often included preparation and grading time. Private sector workers were more likely to work a standard 5-day, 40-hour week. The survey did not collect data on work schedules for college and university teachers because they often do not work fixed schedules.
Police and especially firefighters were more inclined to have unusual work schedules. A firefighter might work 24 hours, then have 24 hours off, work another 24 hours, and, finally, have 72 hours off. This cycle would then repeat. For the survey, this type of schedule was adjusted to determine the average number of days and hours worked in 7 days. For example, the above schedule yields a workweek of 2.3 days and 56 hours, a common schedule for firefighters."
The Employee Benefits Survey also develops data on sponsors of insurance and pension plans. (See table 4.) For private sector employees, benefits are sponsored by single employers, a multi-employer trust, or an employer association."
Public employees, on the contrary, are under plans sponsored by either State or local governments. The only benefit plan found in both surveys is the mandated temporary disability insurance plans in New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and New Jersey. (These plans are tabulated as sickness and accident insurance plans; they appear in table 4 as mandated benefits mandated benefit Managed care A benefit that a health plan is required by law to provide Examples In vitro fertilization, defined days of inpatient mental health or substance abuse treatment, special-condition treatments. See Benefit, ERISA. in the private sector and State-sponsored benefits in the public sector.)
Data on plan sponsors reveal that single-employer plans dominate in the private sector, while public sector plans vary between State and local sponsors. Defined benefit pension plans for public employees are frequently State-sponsored; local governments either may be required to join these plans, or may choose to join rather than establish their own plans. Conversely con·verse 1
intr.v. con·versed, con·vers·ing, con·vers·es
1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak.
2. , health and life insurance benefits for local government employees are more likely to be sponsored by the local governments.
Employers may provide benefits to employees either individually or through a flexible (package) arrangement. The Employee Benefits Survey included the incidence of two types of flexible arrangements: flexible benefits (or cafeteria cafeteria: see restaurant. ) plans and reimbursement (or flexible spending) accounts. Flexible benefits plans allow employees to choose between plans in two or more benefit areas, such as health, life, and disability insurance, and added vacation days. Reimbursement accounts provide funds to pay for expenses often not included in benefit packages, such as health insurance deductibles and coinsurances, 1 2 and employee child care costs. Flexible benefits packages were available to 2 percent of employees in medium and large firms in private industry, and to 5 percent of State and local government employees, most commonly teachers. Reimbursement accounts were available to 5 percent of all employees surveyed.