GLOBAL EMPLOYEE BENEFITS AT A GLANCE Chapter 1 GLOBAL EMPLOYEE BENEFITS AT A GLANCE McGraw-Hill/Irwin Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING OBJECTIVES Differences between benefits in the US and around the world Paid time-off benefits in various continents and countries Protection benefits such as retirement, health care, and social security in various continents and countries Legal and regulatory influences on employee benefits practices Other practices that distinguish countries benefits programs

NORTH AMERICA - NAFTA Mexico, Canada, and the US are part of a trade bloc known as NAFTA – the North Atlantic Free Trade Agreement Formed as of January 1, 1994, NAFTA called for the elimination of duties and phasing out of tariffs over a period of 14 years The labor side of NAFTA is the North American Agreement on Labor Cooperation (NAALC) and was created in order to promote cooperation between trade unions and social organizations in order to champion improved labor conditions

CANADA The basic rule of Canadian law holds that labor and employment law fall within the exclusive jurisdiction of the provinces 8 and 9 annual paid holidays; 2 weeks paid vacation 2 state pension plans, one for Quebec residents only and one for the rest of Canada Medical and basic hospital care paid for by provincial medical insurance plans with compulsory coverage for all residents

MEXICO Paid time-off during public holidays 6 weeks’ leave prior to giving birth and 6 weeks’ leave after birth on full salary Social security programs in Mexico are administered by the Mexican Social Security Institute Medical services provided directly to patients through the health facilities of the Mexican Social Security Institute

SOUTH AMERICA December 8, 2004 at the Third South American Summit - South American Community of Nations Modeled on the European Union

BRAZIL Consolidation of Labor Laws Employers discharge employees arbitrarily because of big supply of readily available workers willing to accept lower pay Comprehensive social security benefits Medical services are provided directly to patients in rural and urban areas through the Unified Health System

ARGENTINA 14 days of paid annual vacation maternity leave for 45 days before birth and 45 days after birth There is a mandatory retirement and pension system Employee health insurance mandated by statute

EU Directives and Community Legislations Labor law was designed with the aim of ensuring that the creation of the Single Market did not result in a lowering of labor standards or distortions in competition The concept of “employment at will” does not exist in the EU as in the United States

FRANCE 5 weeks paid leave after one year of employment Social security benefits granted to employees contain three components: health insurance, unemployment insurance, and retirement insurance Organization of medical services for employees is the responsibility of the employer

GERMANY 4 weeks paid vacation Statutory pension system analogous to the Social Security system in the United States German laws stipulate guidelines for minimal health welfare of workers

SPAIN 30 days paid vacation Leave of absence for up to 3 years from birth Pension funds are regulated under the Social Security system Medical services provided to patients directly through the National Health Management Institute

UK 4 weeks paid annual leave 26 weeks maternity, which may not begin prior to 11 weeks before birth All employees with the requisite National Insurance Contributions are entitled to basic state pension Medical services are provided by the National Health Service

THE NETHERLANDS Paid leave for works council duties Pregnancy and childbirth leave of 16 weeks with full pay Social security system – employee and national insurance and social assistance schemes State Old Age Pensions Act provides old age benefits

ITALY 3 to 5 weeks of paid vacation Paid maternity leave - mandatory 2 months before birth and 3 months after birth Two types of pension plans: compulsory and complementary

POLAND 20 days paid vacation Three-pillar system of pensions Medical services are provided directly to patients by private health care providers under contract to the National Health Fund

SWEDEN 1600 hours work year – shortest in the world 14 weeks of maternity leave Two statutory pension plans Workers’ medical benefits

RUSSIA 28 days paid leave Everyone guaranteed social insurance Government pensions are paid out of a federal budget Compulsory medical insurance covers medical services provided directly to patients by public and private health providers

PEOPLE’S REPUBLIC OF CHINA PRC Labor Law was established in 1995 Employees who have worked for more that one year are entitled to “home leave” Social insurance and mandatory individual accounts Basic Medical Insurance Fund - Pooled Fund and Personal Accounts

JAPAN Civil Code of 1896 10 days paid leave Social insurance system involving a flat-rate benefit National Health Insurance program

SOUTH KOREA 10 days paid leave National health insurance plan - National Health Insurance Act as of July 1, 2001 National Health Insurance Corporation (NHIC)

INDIA Up to 30 days paid leave 1952 - employees' provident funds 1995 - employees' pension scheme 1995 - national social assistance program Healthcare through Employees' State Insurance Corporation

SAUDI ARABIA Islamic Shari’a law 15 days paid vacation Eid Al-Fitr – 10 day holiday Maternity leave - 4 weeks before birth and 6 weeks after birth Comprehensive social insurance system covering all Full medical services Employer provides living quarters and transportation

SOUTH AFRICA Labour Relations Act of 1995 21 days annual leave 4 months of unpaid maternity leave State pensions Numerous private medical plans