What are Employee Benefits?

Learn more about employee benefits, including required and non-required benefits along with frequently asked questions.

Updated on October 31st, 2019

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Employee benefits are non-monetary compensation provided to employees in addition to their salaries or wages. Many companies offer competitive packages to retain employees, while certain benefits are mandated by law.

Types of Employee Benefits:

Employee benefits differ from company to company and vary according to whether your employees are full-time or part-time workers. Each state in the U.S. has its own rules and regulations, but there are certain employee benefits that each company or organization must legally provide. Offering an attractive benefits package can give your business a competitive edge during the recruitment process.

Government-Mandated Employee Benefits:

  • Health Insurance – applies to companies with 50 or more full-time employees.
  • Disability Insurance (California, Hawaii, New Jersey, New York, Puerto Rico, Rhode Island).
  • Employers are required to withhold FICA tax to fund Social Security and Medicare.
  • Federal Family and Medical Leave Act (FMLA) – 12 weeks of unpaid leave for employees to care for themselves or an immediate family member, including the birth, foster care placement, or adoption of a child.
  • Overtime Pay – for non-exempt employees who work more than 40 hours per week.
  • Workers' Compensation – for employees who are injured at work.
  • Unemployment Insurance – for employees who are retrenched or laid off.
  • Time off for employees to vote, serve on a jury or perform military service.

Note: Check the requirements in your state or local jurisdiction for location-specific required benefits.

Employee Benefits Not Required by Law:

Though not required by law, many companies offer additional benefits to provide for the well-being of their employees and to aid in recruiting and retaining staff. These include:

  • Health Insurance.
  • Vision and/or Dental Insurance.
  • Paid Leave (vacation, sick pay, bereavement, personal, and maternity).
  • Unpaid Leave.
  • Retirement Plans.
  • Gym Memberships.
  • Wellness Programs.
  • Flexible Work Schedules.
  • Flexible Spending Accounts (FSA).
  • Daycare.
  • Tuition Contributions.
  • Profit Sharing.
  • Yearly Bonus.
  • Salary Increase.
  • Travel Allowance.

FAQs:

What is the importance of employee benefits for small businesses?

Offering employee benefits shows that you as a small business owner care about your employees' health and wellbeing. A good benefits package will help to attract and retain employees who add value to your organization.

Read more about Employee Benefits.

What are the different types of employee benefits?

Employee benefits are divided into required and non-required benefits. Required benefits are mandated by law and include workers' compensation, unemployment insurance, Social Security and Medicare, and the Federal Family and Medical Leave Act.

Non-required benefits are all those that a business provides at its own discretion, such as paid time off, gym memberships, and wellness programs.

Do employers have to provide employee benefits?

Yes. Businesses are legally required to provide certain benefits to employees. These are protected by federal and state law. All part-time employees must receive workers' compensation and unemployment insurance.

Can an employer take away benefits?

Yes. Employers can take away benefits at their discretion with or without consulting employees. This does not apply to government-mandated benefits or those protected by an employment contract.

  • Health Insurance.
  • Vision and/or Dental Insurance.
  • Paid Leave (vacation, sick pay, bereavement, personal, and maternity).
  • Unpaid Leave.
  • Retirement Plans.
  • Gym Memberships.
  • Wellness Programs.
  • Flexible Work Schedules.
  • Flexible Spending Accounts (FSA).
  • Daycare.
  • Tuition Contributions.
  • Profit Sharing.
  • Yearly Bonus.
  • Salary Increase.
  • Travel Allowance.