Sick and old in small firms lose out as U.S benefits gap widens

2005

If you get sick or have to take time off work for illness in the U.S, you had better hope you are working for a large employer, a study has suggested.

The survey by the Washington-based Office of Advocacy of the U.S. Small Business Administration has found that workers in small businesses in the country generally have access to fewer benefits than their counterparts in larger firms,

While small businesses were continuing to provide benefits to their employees, they did so at a declining rate.

The report, which looked at the cost of health insurance, pension plans, paid vacation, and sick leave, also concluded that companies of all sizes have reduced the availability of health insurance to their employees because of the rising cost of premiums.

Access to retirement benefit is more prevalent among large firms than smaller businesses too, it found.

Paid holiday leave was the most commonly available benefit and access to sick leave tended to vary depending on the size of the company.

More than 81 per cent of employees working for large firms reported having access to sick leave, against 65 per cent in smaller firms.

Some 40 per cent of employees in the smallest firms were also eligible for health insurance cover, compared with slightly more than 77 per cent of those in the largest firms.

"The data indicate that large firms pay more in leave benefits per employee than do small businesses, since a larger share of employees have access to leave benefits in large firms than in small firms," it said.

When it came to health insurance, smaller companies had experienced a faster increase in premiums than larger companies between the mid-1990s through to 2002, it added.

Yet smaller firms also often made substantially larger contributions per participant than larger firms.

Access to retirement benefit was also more prevalent in larger firms, although there had been little change in access since 1998.

Again, smaller firms often made substantially larger contributions per participant than their larger rivals.

In larger firms, some 75 per cent of all employees had access to a retirement plan, compared with 35 per cent in smaller firms, dropping to 11 per cent in firms with fewer than five employees.