What is an Hour Bank
Hour Bank helps you provide benefits for your contract employees. It enables them to “bank” a number of hours so they can maintain their benefits while working on your project.
Hour Bank is an employer-paid plan. Our supplier, D.A Townley, issues a T4A to all eligible employees for Life Insurance, Dependent Life Insurance, and the Accidental Death and Dismemberment insurance premiums, which are taxable benefits to the employee.
- Employees can bank a maximum of 750 hours
- Life, Dependent Life and AD&D terminate at age 70
- Long-Term Disability terminates at age 65
- Extended Health Care, Vision Care and Dental Care terminate at age 85
How Does it Work?
Every hour an employee works is a step closer to a month of benefits.
Benefits are provided to the employee at a “cost” of 150 hours./month. The benefits begin the month after the employee has accumulated 300 hours.
If the employee works more than 150 hours, the extra hours will be stored for times when the employee doesn’t work the required 150 hours. That helps the employee prepare for any life emergencies while helping you build rapport so that they will work with you again. And by accumulating hours in the Hour Bank, employees can continue to receive benefits while not working, until they have “spent” all of their banked hours.
Employers have the option to pre-pay the required 300 hours in order to receive benefits from the start. Every hour the employee works is banked as benefits for when the employee is not workings. Every 150 hours banked is equivalent to one month of benefits.
John needs to work 150 hours each month to receive benefits.
This is his journey.
John works 160 hours. He successfully unlocked his benefits. The extra 10 hours are saved for the future.
John receives benefits this month since he worked the required 150 hour minimum in August. This month he works 220 hours. 150 of those hours go toward benefits in October and he gets to add 70 hours to the 10 he had saved up in August for a total of 80 hours.
John continues to receive benefits since working the required 150 hours the month before. This month he works 150 hours and carries forward the same 80 hours he previously banked.
John gets lucky this month and works 220 hours. He’s worked well beyond the 150 hour minimum, which saves him 70 more hours. Plus he already had 80 hours banked from previous months giving him a grand total of 150 hours banked.
It’s winter, so conditions for John’s work are not ideal. He doesn’t pick up any contracts this month. But thankfully he still has benefits because he was able to bank 150 hours from previous jobs.