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The Three Basic Employee Benefits Required By Law Are

Mine Safety And Health

HR Basics: Employee Benefits

The Federal Mine Safety and Health Act of 1977 covers all people who work on mine property. The Mine Safety and Health Administration administers this Act.

The Mine Act holds mine operators responsible for the safety and health of miners provides for the setting of mandatory safety and health standards, mandates miners’ training requirements prescribes penalties for violations and enables inspectors to close dangerous mines. The safety and health standards address numerous hazards including roof falls, flammable and explosive gases, fire, electricity, equipment rollovers and maintenance, airborne contaminants, noise, and respirable dust. MSHA enforces safety and health requirements at arround 13,000 mines, investigates mine accidents, and offers mine operators training, technical assistance and compliance assistance.

Which Of The Following Benefits Is Required By Law

Benefits required by law include Social Security, unemployment insurance, workers compensation, and leaves under the Family and Medical Leave Act. Disability, health, and life insurance, pension plans, executive perks, paid time off, employee assistance programs, and family friendly benefits are some of the discretionary benefits.

Social Security Medicare And Fica

Social Security and Medicare are considered statutory benefits. The Federal Insurance Contributions Act is a federal payroll tax used to fund Social Security and Medicare programs, both of which provide benefits for retirees, disabled individuals, and children. The law states that both employees and employers are required to contribute to these funds. Employers are required to withhold Social Security tax at 6.2% of gross compensation, up to the Social Security wage base.

Employers must withhold Medicare tax at 1.45% of gross compensation, and an additional 0.9% of compensation in excess of a threshold amount based on the employee’s filing status if an employee’s compensation exceeds $200,000 . Employers must also match 6.2% for Social Security up to the wage base and 1.45% for Medicare. Employers do not have to match the additional 0.9%.

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Transportation And Gas Mileage

With the average tradesman covering lots of miles over a year, employers will be happy to know they dont legally need to cover gas mileage. However, this is another discretionary benefit that many business owners choose to include for their workers.

If you choose to take this approach, youll need a clear company policy that outlines what can and cant be claimed by your employees. For example, it might state that workers must keep a detailed record accounting for their miles while excluding personal use from their claims.

Your business may also be subject to various transportation regulations if you use vans or buses to move employees between work sites, especially across state lines.

Are There Any Exceptions

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Keep in mind that not all employers have to provide benefits, and not all employees are automatically eligible to receive them.

The ACA, for example, requires that employers with 50 or more full-time employees provide health insurance. The Family Medical Leave Act similarly requires employers with 50 or more full-time employees to provide up to 12 weeks of unpaid leave. Smaller companies may be exempt from these requirements.

Part-time workers may be eligible for some benefits and not for others, depending on local and state laws and the employerâs policies.

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Why Do Employers Offer Benefits To Employees

Benefit packages take a lot of time out of many HR professionals time. And with good reason: theyre one of the most basic employee engagement and retention strategies, and they support talent attraction as well.

The numbers speak for themselves about the importance of employee benefits. Extensive research by the Society of Human Resource Management indicates that 92% of employees consider employment benefits as important for their overall job satisfaction . Almost one third of employees also cited work benefits as the top reason of looking for a job outside their organization and for choosing to stay at their job, too.

Benefits are also among the top driving factors candidates look for in job ads 63% of job seekers surveyed say they pay attention to what benefits a company offers. This means that offering benefits, and mentioning them in your job ads and careers page, is a great part of your employer branding efforts.

Employee benefits also help you take care of high-performing employees without the need to keep investing in exceptionally high pay raises. All employees should get paid enough to pay the bills and live comfortably, but they might accept less pay if they have strong health insurance, flexible hours and other benefits important to them. The practice of employees giving up a part of their salary for benefits is called salary packaging, and may also result in tax deductions or other gains for either party.

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Here Are The Top 10 Employee Benefits Worldwide:

  • Private Health Care Plan
  • Retirement / Pension plans
  • Work From Home and/or flexible hours
  • Food and snacks
  • Bonuses / Awards / Gifts
  • Company equipment

Note that the most popular benefits vary per location and there are also benefits that are exclusive to certain areas. For example, Australians can receive novated leasing as a benefit, enabling them to lease cars with their employer taking on the contracts obligations.

In the U.S., where paid parental leave isnt federally mandated by law like in other countries , time off for mothers and fathers is a popular company-offered benefit.

In four English-speaking countries, employee benefits may include:

Employee Discounts

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Migrant And Seasonal Agricultural Workers

The Migrant and Seasonal Agricultural Worker Protection Act regulates the hiring and employment activities of agricultural employers, farm labor contractors, and associations using migrant and seasonal agricultural workers. The Act prescribes wage protections, housing and transportation safety standards, farm labor contractor registration requirements, and disclosure requirements. The Wage and Hour Division administers this law.

The Fair Labor Standards Act exempts agricultural workers from overtime premium pay, but requires the payment of the minimum wage to workers employed on larger farms (farms employing more than approximately seven full-time workers. The Act has special child-labor regulations that apply to agricultural employment children under 16 are forbidden to work during school hours and in certain jobs deemed too dangerous. Children employed on their families’ farms are exempt from these regulations. The Wage and Hour Division administers this law. OSHA also has special safety and health standards that may apply to agricultural operations.

The Immigration and Nationality Act requires employers who want to use foreign temporary workers on H-2A visas to get a labor certificate from the Employment and Training Administration certifying that there are not sufficient, able, willing and qualified U.S. workers available to do the work. The labor standards protections of the H-2A program are enforced by The Wage and Hour Division.

Disability & Workers’ Compensation

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The purpose of both workers’ compensation and disability is to make sure that an injured or sick employee continues to get paid until they are well enough to return to work.

Every state has its own workers’ compensation and disability requirements for employers. While some businesses are exempt from providing workers’ compensation, most payroll employees are eligible if they are injured on the job.

Only a few states require employers to provide disability coverage. However, many employers offer this benefit to employees of their own accord.

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Family And Medical Leave Act

Administered by the Wage and Hour Division, the Family and Medical Leave Act requires employers of 50 or more employees to give up to 12 weeks of unpaid, job-protected leave to eligible employees for the birth or adoption of a child or for the serious illness of the employee or a spouse, child or parent.

How And When Erisa Applies

The obligations and requirements that stem from ERISA are often hard to understand. ERISA does not apply to every situation in which an employer promises or provides someone with an employee benefit. ERISA applies to employer-sponsored arrangements for employee benefits only where an employer has established an employee benefit plan that provides one or more of the benefits listed or referred to in ERISA for its employees. Furthermore, even when these conditions have been met, ERISA does not necessarily apply to a given employee benefit plan. There are exceptions to ERISA coverage based on:

  • the kind of employer that sponsors the plan
  • the nature of the employees covered by the plan
  • several other criteria.

When ERISA applies, it generally prevents the application of most types of state laws to an employee benefit plan and to the employers and others who administer the plan. This effect is called ERISA pre-emption and is discussed in more detail later in this chapter.

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Flexible Hours And Telecommuting/remote Work

Flexible hours and telecommuting are employee benefits that allow employees to have a more flexible work schedule. Flexible hours may involve working fewer hours overall or working different hours on different days. Telecommuting allows employees to work from home, either all or part of the time.

Flexible hours and telecommuting can be beneficial for employees who have children or other obligations outside of work. These employee benefits can also help reduce traffic and save employers money on office space.

Employers may offer flexible hours and telecommuting as employee benefits to attract and retain employees. Some employers may require employees to work a certain number of hours per week or to be available during specific hours.

Benefits That Are Required By Law

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When putting together a package, the first thing youll want to make sure to include is the plans youre required to offer by law.

Bear in mind that employment laws differ by country and state. Here, were going to outline the specific federal requirements in the US.

All companies operating in the US are required to offer these benefits:

  • Workers’ compensation insurance: This covers the costs of medical care, rehabilitation costs, replacement income, etc., for those who become ill or injured as a result of their job
  • Social Security and Medicare contributions
  • Minimum wage requirements and overtime pay
  • Unemployment insurance: This provides partial replacement of income for a short period of time if your employee involuntarily loses their job with you
  • Disability insurance

In addition, employers with 50 or more full-time employees must provide:

  • Family and medical leave

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Benefits Not Mandated By Law

Many are surprised to learn that the law does not mandate regular vacation days. Nor are employers required to provide retirement plans or life insurance, though many employees find these benefits essential reasons to take a job offer. Federal law does set minimum standards for certain types of benefits that employers voluntarily provide.

For example, the Employee Retirement Income Security Act of 1974 sets minimum standards for pension and health plans voluntarily offered in private industry. The goal is to protect individuals who accept employment, based on particular benefits that are offered, such as medical benefits and pensions. Under ERISA, plans must provide participants with plan features and funding information and set fiduciary responsibilities for the people who manage and control plan assets. ERISA gives participants the right to sue when there is a breach of fiduciary duty or a denial of benefits.

ERISA has been revised several times and its amendments have affected mental health, newborns, and cancer rights. Under one of the ERISA amendmentsthe Consolidated Omnibus Budget Reconciliation Act of 1985 employers with 20 employees or more on more than 50 percent of typical business days are required to abide by certain regulations. COBRA gives former employees, their spouses, and dependent children a continuation of their health insurance coverage at group rates.

Last reviewed October 2022

Employee Benefits Other Than Deferred Compensation

The second broad category of employee benefits consists primarily of coverage for certain unpredictable life events , plus some types of goods or services provided directly to the employee and/or the employees family members either as a matter of employer discretion , or at least partially for the convenience of the employer . Coverage in this context can mean insurance coverage or coverage under a program that is similar in certain specific ways to insurance, including a self-insured program under which the employer bears the financial risk associated with the plan.

Coverage under an insurance policy or a self-insured arrangement often results in a cash payment to the employee, the employees beneficiary, or a third party such as a physician or dentist who provides services to the employee. However, coverage is not always limited to arrangements that result in a cash payment or a cash reimbursement to the employee.


Medical coverage under an agreement with a health maintenance organization could consist of an employees right to medical treatment without a fee for the treatment.

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Social Security And Medicare Taxes

Regardless of the size of the business, every employer in the U.S. is required to match their employees social security and Medicare tax contributions. The cost of these contributions can range based on the age of the employee and their earned income. At the start of employment, each employee should complete certain tax forms.

The employer then uses this information to create a W-2 form which is used to report wages. To verify identities, employers typically use a Social Security verification system which helps minimize the risk of identification errors. This system also ensures each employee is rightfully credited for their Social Security and Medicare tax contributions.

Example Of Employee Benefits Structures

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Once you know the kind of employee benefits you’d like to offer, you’re ready to decide how you want to structure them.

In general, employers have two different ways to structure, contribute, and offer employee benefits:

  • Organizational-oriented benefits
  • Consumer-oriented benefits

Depending on the type of benefits you’re hoping to offer, you can offer all organizational-oriented benefits, all consumer-oriented, or a mix of both. Let’s go over each in more detail.

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Plant Closings And Layoffs

Such occurrences may be subject to the Worker Adjustment and Retraining Notification Act . WARN offers employees early warning of impending layoffs or plant closings. The Employment and Training Administration provides information to the public on WARN, though neither ETA nor the Department of Labor has administrative responsibility for the statute, which is enforced through private action in the federal courts.

Family Medical Leave Benefits

Any business that employs 50 or more full-time equivalent employees is required to offer eligible employees up to 12 weeks of unpaid, job-and-benefits-secured medical leave per year for any of the following reasons:

  • The birth of a child.
  • The adoption of a child.
  • To care for an immediate family member with a serious medical condition.
  • To receive care for the employees own serious medical condition.

These required employee benefits are outlined by the Family Medical Leave Act, and although FMLA does not require companies to financially compensate employees during these 12 weeks, many for-profits offer at least partial pay. Some businesses offer six weeks of paid leave and then allow the employee to take the additional six weeks unpaid if they would like.

Many employers allow their employees to use accumulated PTO during this time, either in addition to or in replacement of, monetary compensation. In the example of a pregnant woman, if a company offered her six weeks of fully paid leave, the employee could choose to use her two weeks of vacation time after exhausting that allotment, giving her eight weeks to be home with her newborn. If she wanted to take the following four weeks off, she could legally do so at her own expense.

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How Do Employee Benefits Benefit Your Business

Talent is everything. It is not only important to drive business performance, but it is a scarce commodity that deserves attention. Not only if your org wants to perform, but if you also want to grow, you will always need talent on hand.

In that sense, employee benefits can be a key differentiator for your business.

If we think about employee benefits, we need to think about them in three unique camps:

  • Benefits for Attraction

  • Benefits for Satisfaction

Coverage Of An Employee/establishment By An Employer

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An arrangement is not an employee benefit plan unless it was established by an employer to cover at least one employee of the employer that sponsors or maintains the arrangement or by an employee organization to cover one or more employees because of their status as employees. ERISA defines the term employer broadly to include any person acting directly as an employer, or indirectly in the interest of an employer in relation to an employee benefit plan and includes a group or association of employers acting for the employer in such capacity. Thus it is possible, at least in principle, that a plan sponsored or maintained by an organization of employers for the employees of constituent members of the organization is covered under ERISA. However, courts have ruled that a plan maintained by an association of employers does not necessarily satisfy the requirement of employer sponsorship or maintenance. It is also necessary that the association and the individuals that benefit from the plan are tied by a common economic or representational interest, unrelated to the provision of benefits.

Coverage of even a single employee is sufficient to satisfy the requirement that the plan provides a benefit because of an employment relationship. Moreover, coverage of even a single employee is sufficient to cause the entire plan to be governed by ERISA, even when the plan also covers a person who is not a common law employee of the business.

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