Required employee benefits
Social Security Taxes:
Every employer must pay Social Security taxes at the same rate their employees are paying it. If you hire employees who aren’t covered by Social Security, such as government employees, there are additional requirements.
Unemployment Insurance:
A business may be required to pay unemployment insurance taxes, requiring the employer to register with its state’s workforce agency.
Workers’ Compensation:
Businesses with employees must have workers’ compensation insurance coverage through a commercial carrier, on a self-insured basis, or through the state Workers’ Compensation Insurance program.
Disability Insurance:
The U.S. territory of Puerto Rico and the five states of California, Hawaii, New Jersey, New York and Rhode Island require businesses to provide partial wage replacement insurance coverage to eligible employees for non-work related sickness or injury.
Family and Medical Leave:
The federal law called the Family and Medical Leave Act, or FMLA, entitles employees to have up to 12 weeks of job-protected, unpaid leave during any 12 months. This leave can be for three reasons: For birth and care of a child or adoption or foster care of a child, care of an immediate family member who has a serious health condition, or the care of the employee’s own serious health condition.
Group health benefits must be maintained during the leave. FMLA applies to private employers with 50 or more employees, and to all public employers.
Optional Employee Benefits:
There are also optional benefits that employers can provide as incentives. Some have legal and tax implications:
Leave Benefits:
Other than the federally required family and medical leave, most common leave benefits are not required by federal law as part of a benefits plan. These include holidays and vacations, jury duty, personal leave, sick leave and funeral and bereavement leave.
