Disability coverage, retirement savings, and health insurance are some of the benefits every employer may offer its workers. However, the question is, what are the mandatory benefits the law requires businesses to provide their full-time employees? In this article, we’ll address the benefits that federal law legally requires and some of those that are state-mandated. Keep reading to learn more.
Mandatory benefits: What Are They?
The benefits offered by employers are generally divided into two groups: those that the business provides voluntarily and those imposed by the law. The benefits legally required are there to ensure that workers are given medical care and retirement income, avoid economic struggles that may result from disability or losing work, and cover any liabilities that may come from work-related illnesses and injuries. Some of these include the following::
- Medicare and social security. These programs are considered to be statutory benefits. FICA is an employment tax used primarily to fund Medicare and social security, both of which exist to provide benefits for disabled individuals, children, and retirees. The law firmly states that employers and their employees must contribute to the abovementioned funds.
- Workers’ compensation. Workers compensation insurance is a type of coverage that provides people who cannot perform their duties and responsibilities to their respective employers due to illnesses or injuries sustained in the workplace. If employees experience any accidents that result from their on-the-job work, states mandate employers to cover any medical bills and income lost during their period of recovery. While limitations will undoubtedly exist, be it waiting periods or coverage type, the majority of states agree that a business must always keep their workers protected while they’re doing their respective jobs.
- Health insurance. Under the act for affordable care, applicable large employees (ALEs) can potentially risk assessments if they fail to provide affordable and sufficient coverage for their employees and dependents. ALEs are companies with 50 or more employees, including full-time workers. And to meet the minimum standard for health coverage, the policy must offer access to a network of specialists and providers, and more importantly, cover at least sixty per cent of the medical services’ total cost that the plan includes.
- Medical leave and family act protection. The medical leave and family act protection entitles all eligible workers of covered businesses to get job-protected, unpaid leaves for specified medical and family reasons. Additionally, some local jurisdictions and states may require paid or unpaid family, sick, or safe leaves. And as an employer, you must review all obligations applicable under the local and state laws.
Benefits that aren’t Required by the Law
Non-mandated benefits are those that are left to the employers’ discretion. These include but aren’t necessarily limited to contributions to saving for retirement plans, educational assistance, wellness programs, child care assistance, and paid vacations. Because these are increasingly becoming major considerations when it comes to evaluating prospective job offers, more and more employers are starting to include them as a component of their basic package to remain competitive in the recruitment and retention of a top-notch workforce.
There’s no denying that mandatory benefits are an integral aspect of any business. However, those that aren’t are equally essential. For this reason, you must make sure that both are a part of your entrepreneurial venture. It will make a difference to your ability to achieve success.