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Introduction to Compensation Laws in Employment


Discuss about the Creating and Updating an Employee Policy.

Employment and in particular labor laws are significantly complex for government and private sector players like Reynolds Plastic Products. Although the company is trying is maximum best to have fair compensation policies it is somehow contravening the compensation practices in legal requirements. Most applicable employment and labor laws are basically determined by the nature of the business the employer engages in. laws such as the Canada labor code and the much strict federal employment equity act are the laws that govern compensation. Reynolds plastic although federally regulated will still conform to certain provincial laws that relates to compensation of its workers (DeCenzo, Robbins & Verhulst, 2013).

The compensation laws as a mechanism for extinguishing obligations and the legal requirements to apply it are important. We distinguish between legal and conventional compensation and recognize the difficulty of its application in employment proceedings(Alibekova &Campbell,2007).

The compensation law is something very easy to understand, which can be summarized in the total or partial extinction against the other party. A very thick but perfectly understandable example would be that of the one who owes 5 to a supplier but in turn is creditor of 3 in front of it (Harzing & Pinnington, 2015).

It is a mechanism that we must use and communicate expressly that we have made use of it, especially when we suspect that otherwise the collection of our credit will be impossible. Beyond this legal compensation, it is always possible to reach specific agreements of conventional compensation, when all the requirements are not met. Among the contravening aspects in labour laws are;

Underpaying employees at the company when normal compensation rates and market rates tend to show otherwise. Others are not paying of overtime in Reynolds plastic limited

One of the ways that employers use to extinguish the obligations they assume with others or with their clients is legal compensation, which can also be used as a defense mechanism against claims initiated by their creditors, provided that the legal requirements are met. for its use (Ivancevich & Konopaske, 2013).

Understaffing- employing very few workers to take a lot of work in the company and not hiring either on permanent or contractual basis.

Underpayment- compensation is done not only irregularly but also the workers are not paid according to market rates and compensation labor laws.

Overworking- as a plastic company with few workers, the company overworks its employees and as a result there is excessive fatigue and abject disregard of human working conditions.

Legal and Conventional Compensation

Delayed salary- sometimes the salaries are delayed leading to demoralization of workers at the site(Association, 2016).

Based on the legal definition described in the preceding paragraph, it is concluded that is before the existence of reciprocal compensation between two people, the figure of compensation is structured, causing such debts to be extinguished, leaving the parties to peace and so compensated.

The compensation, as a way through which the obligations are extinguished, is regulated in Title XVII of the Civil Code, applicable in commercial matters based on the express reference of article 822 of the Commercial Code.The requirements for legal compensation to operate are the following:

In that order of ideas, the compensation could not be alleged by the principal debtor before his creditor that claims the fulfillment of the obligation, based on the right of credit that the guarantor has in his favor and that the compensation process of Reynolds plastic must satisfy (Ivancevich & Konopaske, 2013).

That there is a fungibility of the credits. That is to say, that the mutual debts between the contractual parties are those that are classified as gender and that are also of the same gender. An example of this would be when both parties owe each other sums of money.

By virtue of the foregoing, it is affirmed that the compensation would not be viable when one of the obligations is to do or not to do, it is the case in which A owes the payment of a sum of money to B and, in turn, B He owes A the execution of a specific task or to refrain from doing something, for example to carry out legal accompaniment in a meeting of members or not to give an opinion in the assembly, without prior authorization from A (Ross, 2010).

That the reciprocal debts are liquid. The foregoing indicates that the debts must be certain and determined in their amount, a circumstance that is appreciated when by a simple arithmetic operation the existence of the reciprocal debts and their exact value is determined.

It is important to clarify that although it is true that of the Civil Code determines that if the requirements described above are met, the legal compensation operates automatically and therefore would not require the pronouncement of a judge, based on the provisions of Article 282 of the General Code of the Process, the compensation must be alleged by the interested party in the respective judicial process to produce its effects, since the judge can not declare it informally (Fisher, Schoenfeldt & Shaw, 2006).

Compensation management, also called compensation for performance is a practice that has been used for a long time in the management of human talent. Considered as a key differentiator for attracting talent today, it goes beyond that purpose as human capital managers have discovered that it is very useful to foster a high performance culture among employees.

Labor Laws that Govern Compensation in Canada

As mentioned above, employers are not required to provide their employees with medical, disability, dental or life insurance, but if they do, they must respect federal laws that prohibit discrimination in employment. As in other areas related to employment, such as hiring, promotion and dismissal, it is not permissible to provide different types of coverage based on gender, race, age, nationality, religion or disability of an employee or his / her employees. Dependents For example, an employer who provides its employees with health insurance cannot do the following, among other things. Refusing to provide coverage based on the actual or perceived disability of the employee or his dependents, or their genetic information (Grabowski, 2012).

Plan A

Plan B

Single Premium

$40 / employee /month

$60 / employee /month

Family Premium

$100 / employee /month

$120 / employee /month

One of the current challenges of the organizations is precisely not to focus their programs of compensations and incentives towards the benefit only of the company, the employees want to be successful and develop in a competitive environment for which the company must establish a philosophy of compensations and incentives that motivate employees to give their maximum effort and at the same time the organization is benefited by having staff that is achieving business goals.

There is a wide range of options in terms of designing a compensation and benefits plan and it is important that it is aligned with the overall strategy of the company and that it is part of an integral process of human capital management by connecting it with the other processes such as recruitment, performance evaluations, career plans, among others (Grabowski, 2012).

In PeopleNext we want to share with you 5 key tips so that the implementation of your compensation and benefits plan for your collaborators is a success.

When designing the compensation plan for your employees, it is important that you do it based on the organizational strategy, as this will help your employees' performance to have a significant impact on the achievement of organizational goals.

It is essential that each of the positions that make up your organization chart is well defined, since this is the basis on which the compensation and benefits plan is supported, in this way you can ensure that you are implementing an equitable practice for each of your employees. (Association, A. 2016).  . The job profile is a document in which all the information of the job position to be performed is included, such as skills, competences, attitudes, educational and professional training, experience, etc. It is essential that the recruitment and selection of staff is based on the job profiles developed to ensure that you are hiring people who meet the requirements and that your profile is appropriate to the values ??and organizational culture (Harzing & Pinnington, 2015).

Challenges in Labor Laws Related to Compensation

For the list of Health Procedures charged to the UPC, all the subcategories that make up each of the categories described in Annex 2 are considered financed with UPC resources, except those referred to as not funded in the explanatory note and those that correspond to a different field than health.

It is the maximum value that serves to define the orientation of public funding towards a reference value to be recognized by any drug in the group that complies. The VMR is calculated considering the annual weighted average value, position statistics of the values ??and frequencies reported in the SISMED; said value is adjusted taking into account, if necessary, the average prescription dose and maintaining the frequencies reported in the basis of service provision used for the calculation of the UPC. The expression of the value can be established either as a total, or as an expression per capita according to the number of exposed (Ivancevich & Konopaske, 2013).

According to resolution 5269 of 2017, the Maximum Recognition Value does not constitute a regulation or a setting of market prices, nor a billing value or a single tariff, therefore, it should not be used as recognition of treatment values ??between actors. .

In order to facilitate timely access, the Benefits Plan charged to the UPC finances the Telemedicine modality when it is available and allows the purpose of providing the service or guarantees greater opportunity in case the face-to-face is limited by geographic access barriers or low supply availability.

Most employers are not required by law to offer health benefits to their employees, although it is very common in many companies. When an employer offers or provides health benefits (including medical, disability, dental, and life insurance), it must respect federal anti-discrimination laws and regulations for the application of health plans that protect the rights of employees covered by these types of plans.


Alibekova, A., & Campbell, D. (2007). Employment law. Alphen aan den Rijn, The Netherlands: Kluwer Law International.

Association, A. (2016). Creating and Updating an Employee Policy Manual. Chicago: American Dental Association.

DeCenzo, D., Robbins, S., & Verhulst, S. (2013). Human resource management. Hoboken, NJ: Wiley.

Fisher, C., Schoenfeldt, L., & Shaw, J. (2006). Human resource management. Boston, Mass. [u.a.]: Houghton Mifflin.

Grabowski, W. (2012). Employee stock options, payout policy, and stock returns. Frankfurt am Main: Peter Lang.

Harzing, A., & Pinnington, A. (2015). International human resource management. London: SAGE Publications Ltd.

Ivancevich, J., & Konopaske, R. (2013). Human resource management. New York, NY: McGraw-Hill Irwin.

Ross, J. (2010). Employment law. Dundee: Dundee University Press.

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