Employee Benefits in the US

Anke Corbin

The information on this page was current at the time it was published. Regulations, trends, statistics, and other information are constantly changing. While we strive to update our Knowledge Base, we strongly suggest you use these pages as a general guide and be sure to verify any regulations, statistics, guidelines, or other information that is important to your efforts.

Employee Benefits in the US

Employment benefits refers to compensation provided to employees, by their employers, to supplement their wages or salaries. Employment benefits play an important role in the lives of employees, and their families, in the US. Because of that, the benefits you offer can be a deciding factor for an employee’s decision to work for you. Employment benefits include health insurance, life insurance, disability insurance, sick leave, paid vacation, pensions, tuition reimbursement, relocation expenses, housing, profit sharing, child care benefits, and other perks.

There are very few employment benefits that are required by law in the US. However, federal and state governments may set minimum standards for benefits employers voluntarily provide to their employees. Furthermore, legally required and voluntary benefits have legal and tax implications for you.

In the United States today, there is generally no accepted practice relating to employment benefits. Employment benefits vary from employer to employer based on location, industry, company size, etc.

The two federally required benefits are Social Security and workers’ compensation:

Social Security

You must pay Social Security taxes at the same rate your employees pay. Here are some websites to help you understand your Social Security obligations:

Workers’ Compensation

If you have employees, you are required to carry workers’ compensation insurance coverage through a commercial carrier, on a self-insured basis, or through a state workers’ compensation insurance program. Workers’ compensation is designed to help pay the expenses of employees who are harmed while performing job-related duties. Expenses available generally include: wages, medical expenses, disability payments, and costs associated with rehabilitation and retraining. Workers’ compensation programs are administered by each individual state and financed by mandatory employer contributions.

Unemployment Insurance

You may be required, by state law, to pay unemployment insurance taxes. If you are required to pay these taxes, you must register with your state’s workforce agency.

Disability Insurance

Some states require that businesses provide partial wage replacement insurance coverage to eligible employees for non-work related sickness or injury. These state include:

Leave Benefits

Most leave benefits offered by employers are not required by federal law, rather, they are offered to employees as part of an overall compensation and benefits plan. Leave benefits include: holiday/vacation, jury duty, personal leave, sick leave, and funeral/bereavement leave.

Some employers are required to provide leave under the Family and Medical Leave Act of 1993 (FMLA). FMLA entitles employees to have up to 12 weeks of job-protected, unpaid leave during a 12-month period for the birth and care of a child, the adoption or foster care of a child, care of an immediate family member with a serious health condition, and care of the employee’s own serious health condition.

The FMLA does not apply to the vast majority of small and medium sized businesses. The FMLA applies to all public agencies, including state and local agencies throughout the US, and to private sector employers who have 50 or more employees each working day during at least 20 calendar weeks in the current or preceding calendar year.

Health Plans

Whether or not you offer your employees access to a group health plan through your company is optional. However, if you offer a group health plan to your employees, you must comply with federal law.

Retirement Plans

Retirement plans are also an option benefit you can provide to your employees. Below are several resources to help small businesses determine whether and what type of retirement plan you would like to offer your employees:

Employee Incentives Programs in the US

Many employers in the US understand the benefits of providing incentive programs for employees. Incentive programs can boost the morale of employees through engagement and reward. The following are a few of the many incentive programs that are offered by small businesses across the US:

Flex time : Offering employees the opportunity for flexible work hours can be a great incentive for attracting and retaining high performing and motivated employees.
Company functions and events : Planning and hosting company functions and events is a great way to encourage your employees to interact with each other outside the workplace. Family friendly functions and events are particularly rewarding for many employees.
Workplace wellness programs : Investing in your employees’ wellness is a great way to show your investment in your employees. Workplace wellness programs do not have to involve a great deal of money or administrative work. Examples include wellness presentations and challenges, including weight loss and quit smoking initiatives, and lunchtime team walks.
Corporate memberships : Discounted or free memberships help promote employee well being while enabling and promoting company goals. These memberships include: gym memberships and recreational or entertainment memberships.

References

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