Home > HR Pro Shop > 6 Mandated Employee Benefits You are Required to Provide

As an employer, it’s important to know the mandated employee benefits that you are required to provide to your employees.

These benefits are designed to make sure that workers are treated fairly and have access to basic protections and support. You can minimize the manual time investment by implementing a benefits administration software solution.

As such, in this article, we’ll cover some of the mandated employee benefits that you should be aware of.

But First, Let’s Get One Thing Straight

When most people hear the term ‘employee benefits’, they think of things like health insurance, vacation time, and 401(k) plans. Employee benefits are much more than that, though. According to Merriam-Webster’s definition of the word ‘benefit,’ “a benefit is a service or right provided by an employer in addition to wages or salary.”

Some of these ‘services’ or ‘rights’ are government mandated and companies are required by law to provide them to their employees. So while you may choose to offer your employees fringe benefits like a retirement plan or dental insurance, there are six mandated benefits that most small and mid-size business owners must provide their employees.

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1. Government-Mandated Benefits for Employees

In addition to paying your employees a salary or hourly wage, the following are government-mandated employee benefits that most businesses are required by law to provide.

  • Social Security & Medicare Contributions
  • Workers’ Compensation Insurance
  • Unemployment Compensation Contributions

Depending on the size of your company and the benefits you offer your employees, you may also be required to provide COBRA, CHIPRA (Children’s Health Insurance Program Reauthorization Act) and Family and Medical Leave.

2. Social Security & Medicare

Social security and Medicare are Federally-funded and mandated benefits programs. These 2 government taxes are paid equally by both the employee and their employer as payroll deductions. Social Security benefits provide income to employees after they retire or in instances where they become permanently disabled. Medicare provides health insurance programs for people age 65 or older and in some cases, people that are younger than 65 due to certain disabilities or medical conditions.

3. Workers’ Compensation

Workers’ compensation insurance provides medical care and treatment, rehabilitation and replacement income for employees due to job-related injuries and illnesses. Workers’ comp is provided by an employer through either a state run insurance fund or through an insurance company. 

4. Unemployment Compensation

The purpose of unemployment compensation is to provide temporary and partial income replacement to employees that have involuntarily lost their jobs. Terminated employees may not collect unemployment if they were let go due to certain circumstances… one being willful misconduct. Unemployment insurance is a combination of Federal and State run programs that both employees and employers pay into.

5. Family and Medical Leave Act (FMLA)

The FMLA requires covered employers to provide eligible employees with up to 12 weeks of unpaid leave for certain family and medical reasons. This includes the birth or adoption of a child, caring for a family member with a serious health condition, or the employee’s own serious health condition.

6. Affordable Care Act (ACA)

The ACA requires employers with 50 or more full-time employees to provide health insurance coverage to their employees. The law also includes provisions for preventive care services, as well as protections for individuals with pre-existing conditions.

In addition to these mandated employee benefits, some states and localities have their own requirements for employers. For example, some states require employers to provide paid sick leave or paid family leave to their employees.

It’s important to stay up-to-date on the mandated employee benefits that apply to your business. Failure to comply with these requirements can result in penalties and fines. Additionally, providing these benefits can help attract and retain top talent, as well as promote a positive workplace culture.

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