6 Often-Mandatory Employee Benefits Every Leader Needs to Keep on Their Radar Though they vary by state in terms of scope and application, companies are typically required to provide the following, and the consequences of not following the rules can be dire.
By Mike Kappel
Opinions expressed by BIZ Experiences contributors are their own.
As an employer, it's critical to be a rule follower and toe the legal line, including abiding by payroll and tax requirements, and it's particularly vital to pay attention to employee-related regulations like mandatory benefits. Not keeping a steady eye on them means more than simply disgruntled workers, but fines, penalties and perhaps even jail time.
Which benefits might you be legally required to provide?
1. FMLA
The Family and Medical Leave Act (FMLA) is a federal law that protects an eligible employee's job if there is a need to take time off work for certain family and medical reasons (e.g., the birth of a child). Under the law, employers with 50 or more employees must provide 12 weeks of unpaid leave each year, provided the reason meets the qualifying criteria. And if someone takes such leave, you must protect their job until they return.
An employee qualifies for FMLA if they:
• Work for a covered employer
• Have worked 1,250 hours during the 12 months before the time of leave
• Work at a location in which the employer has 50 or more employees within 75 miles
• Have worked for the employer for 12 months, and those months do not have to be consecutive
Related: The Requirements of FMLA Compliance
2. Unemployment insurance
Most employers must contribute to unemployment insurance through payroll taxes (FUTA and SUTA). In turn, both the federal and state governments provide monetary benefits for eligible unemployed workers who cannot work through no fault of their own (e.g., being laid off).
Rates can vary by state and business. Each state sets its own rules, including who is eligible for benefits, how much they are and how long a worker can receive them.
The federal rate is the same for every business: 6% on the first $7,000 each employee earns per calendar year. However, employers might qualify for a tax credit of up to 5.4%. So, be sure you know your federal and state unemployment tax rates, and keep in mind that they can change from year to year.
3. Paid sick leave
When a staff member becomes ill, they may need to take time off, and — depending on your state — sick leave laws may require you to pay them during this period. Accrual rates and caps vary by state, as well as which employers must follow the law. For example, all Colorado employers (regardless of size) must provide workers with one hour of paid sick leave for every 30 hours of labor, and the maximum accrual limit is 48 hours per year.
Brush up on your local requirements, and check them regularly to see if anything has changed.
Related: This Tech Company Has The Best Perks And Benefits -- And No, It's Not Google
4. Paid family leave
Just as with sick leave, certain states require employers to provide paid family leave.
What's the difference between the two? State-mandated paid family leave provides qualified employees with paid family and medical time off (think FMLA leave, but paid) to take care of a seriously ill family member, for example, bond with a new child or deal with a serious health condition.
States with such laws require employers and/or employees to contribute to a fund, and rules vary by state when it comes to reasons for disbursing it, as well as how long leave can be, who qualifies and the contribution rate.
5. Retirement plans
These are a nice perk for employees but aren't a requirement in the majority of states. However, there are a handful that require eligible employers to offer a retirement plan option. Whether or not you're required to depends upon:
• Your state
• Number of employees
• Length of time in business
• Any already existing retirement programs
Check with your state to see if it has a mandated plan. If so, you must either enroll employees in a state-sponsored version or offer a qualifying alternative.
6. Healthcare under the ACA
Companies or organizations with 50 or more full-time or full-time-equivalent (FTE: a combination of part-time workers. When you add together multiple part-time positions, you create full-time equivalent employees) are required to offer health insurance under the Affordable Care Act (ACA). Those who fail to do so may be subject to penalties of various kinds.
Other potential benefits
Along with complying with federally- and state-mandated benefits, you are, of course, at liberty to offer others to win over top talent, including:
• Family-related benefits (e.g., adoption assistance)
• Work from home and hybrid work options
• Education assistance
In addition to the above, you can also offer tried and true examples like competitive pay, 401(k) match, and paid time off.
