When job seekers are looking for their next career opportunity, they consider several factors: the company’s culture and success, the responsibilities that come with the position, and the salary, among other things. Employee benefits are also important to many workers, and some of these are required by law. If you are a human resources manager or another top business executive, it’s critical to know which employee benefits are mandatory under federal and state laws.
Mandatory Employee Benefits Under Federal Law
Companies can often be more generous than others regarding their ability to provide certain perks and benefits (e.g., discounted gym memberships, health and wellness programs). Nevertheless, there are five required employee benefits that are mandatory under United States federal law. Here is a close look at each of these benefits.
If one of your employees loses his (or her) job through no fault of his/her own (e.g., downsizing, mass layoffs due to a recession), this worker can apply for unemployment insurance. This typically offers a source of income for a period of up to 26 weeks or approximately six months. The federal government (Congress) can often pass legislation to extend this period if elected officials deem it necessary. In the second half of 2019, $12.66 billion were paid in unemployment benefits in the U.S, according to Statista. Contrarily, $73.52 billion in unemployment benefits were paid out during the first half of 2020.
Workers Compensation Insurance
This type of insurance protects employees who are forced to stop working after sustaining a work-related injury or illness. Workers’ comp insurance reimburses said worker not only for the loss of income but also any ensuing medical expenses. Employers are not obligated under federal law to provide health insurance coverage, on the other hand.
Disability insurance offers financial support to workers who have become injured or fallen ill and cannot effectively do their job. In certain states (e.g., California, New Jersey, New York), this type of insurance can be used to replace part of your wages. The Social Security Act defines the term “disability” very strictly. According to the law, a person is considered disabled if he/she is unable to work “due to a severe medical condition that has lasted (or is expected to last) at least one year or result in death.”
Unpaid Leave For Family Or Medical Reasons
Suppose your company has fifty or more employees. In that case, you are required to provide up to 12 weeks of unpaid leave for family (e.g. maternity) or medical reasons (e.g. caring for a relative with a terminal illness). The Family and Medical Leave Act (FMLA) was passed in 1993 to protect workers in situations like these.
Leave To Fulfill Civic Responsibilities
Suppose one of your employees needs to step away from work to perform a civic duty (jury duty, vote, serve in the military, etc.). In that case, you are required by law to provide him/her with leave for the duration of the civic responsibility. Leave for civic responsibilities is typically unpaid, although certain states may issue the employee a small payment for the service performed. Therefore, be sure to check your state’s laws.
Are There Mandatory Employee Benefits Required Under State Laws?
In addition to employee benefits that are mandatory under federal law, certain states have their own laws concerning benefits. In California, for example, required benefits include Social Security (retirement) benefits, paid sick leave, and final wage payment when an employee is terminated. Concerning the latter benefit, California law specifically states that an employer is required to pay allowed wages within 72 hours of the employee’s departure.
Reach Out To A Professional Employee Benefits Firm
Speak to the experienced professionals at New City Insurance in San Diego for more information on which employee benefits are mandatory under federal and California state law. Since our founding in 2008, we have been dedicated to helping our clients obtain the most high-value insurance solutions, regardless of their needs and concerns. The members of our team are all extensively trained and knowledgeable about employee management software.
At New City Insurance, we place great emphasis on employee benefits compliance. We always strive to ensure that HR executives are abiding by all regulations concerning the administration of employee benefits including laws such as the FMLA, the Affordable Care Act, COBRA, and HIPAA. Call New City Insurance today at (888) 210-2759 or contact us online to request a consultation and to learn more about our services regarding employee benefits administration.