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Required Employee Benefits
Employee benefits play an important role in the lives of employees as well as their families. For that reason, the benefits you offer can be a deciding factor for a potential employee’s decision to work at your business.
There are two types of employee benefits must provide by law those the employer must provide by law and those the employer offers as an option to compensate employees. Examples of required benefits include social security and workers' compensation, while optional benefits include health care insurance coverage and retirement benefits. Both required and optional benefits have legal and tax implications for the employer.
This guide helps employers understand what they need to do to supply employee benefits required by law.
Social Security Taxes
Every employer must pay Social Security taxes at the same rate paid by their employees.
The following sites from the Social Security Administration can help you comply:
- Information and Resources for Employers
- Social Security: Business Services Online
- Employer W-2 Filling Instructions and Information
- Instructions for Hiring Employees Not Covered by Social Security
Businesses with employees may be required to pay unemployment insurance taxes. If your business is required to pay these taxes, you must register with your state's workforce agency, which can be found on our State and Local Tax page
Businesses with employees are required to carry Workers' Compensation Insurance coverage through a commercial carrier, on a self-insured basis, or through the state Workers' Compensation Insurance program. Visit the Workers' Compensation page for more information.
The following states and territories require businesses to provide partial wage replacement insurance coverage to their eligible employees for non-work related sickness or injury:
The majority of common leave benefits offered by employers are not required by federal law, and are offered to employees as part of the employer's overall compensation and benefits plan. These leave benefits include holiday/vacation, jury duty, personal leave, sick leave and funeral/bereavement leave. However, employers are required to provide leave under the Family and Medical Leave Act (FMLA).
Family and Medical Leave
The Family and Medical Leave Act (FMLA) entitles employees up to have 12 weeks of job-protected, unpaid leave during any 12-month period for any of the following reasons:
- Birth and care of the eligible employee's child, or placement for adoption or foster care of a child with the employee
- Care of an immediate family member (spouse, child, parent) who has a serious health condition
- Care of the employee's own serious health condition
FMLA requires group health benefits to be maintained during the leave as if employees continued to work instead of taking leave. FMLA applies to private employers with 50 or more employees, and to all public employers. Visit the Department of Labor’s website for more information.