Final answer:
Employee compensation includes wages and benefits such as private pension contributions, health insurance, and legally required insurances such as workman's compensation and unemployment insurance.
Step-by-step explanation:
Compensation of employees generally includes financial remuneration paid in the form of wages and salaries by businesses and governments to their employees. However, it also encompasses more than just the immediate paycheck. Compensation typically includes payments into private pension, health, and welfare funds on behalf of workers. Moreover, employers make contributions to social insurance programs, such as workman's compensation insurance, which is mandated by law to cover employees who incur injuries while on the job. Funds for workman's compensation insurance are managed at the state level, ensuring that benefits are available to injured workers. Additionally, businesses contribute to systems like unemployment insurance and the Pension Benefit Guarantee Corporation, the latter safeguarding a portion of employees' pensions in the event of a company's insolvency.