Required vs. Optional Employee Benefits | Netchex HCM Software
November 5, 2014

If you are starting a new business and have reached a point where it is time to hire employees, you may be venturing into the world of Human Resources for the very first time. One large aspect of this is knowing exactly which employee benefits you are required by law to offer. Below is a brief primer on what you required to offer, and what is optional.

The following are required employee benefits.

Social Security

Employers are required to pay social security taxes at the same rate as their employees. In 2014, the tax rate is 6.2% for the employer and 6.2% for the employee, for a total of 12.4% of each employee’s salary being contributed to Social Security. There is an additional 1.45% each for Medicare.

Health Insurance

Employers with more than 50 employees are required to provide them health insurance under the Patient Protection and Affordable Care Act.
Family and Medical Leave– Federal law states you must provide 12 weeks of job-protected unpaid leave per 12 month period to any eligible employee. This is typically used in the event of childbirth, urgent family care, or treatment of a health condition.

COBRA Benefits

Companies with 20 or more employees are required to provide continuation of health coverage at group rates for former employees, retirees, spouses, former spouses, and dependent children. Depending on the circumstances, the continuation of coverage can last for 18 or 36 months.

Unemployment Insurance

This funds the state’s payments to those who have filed for unemployment benefits. The contribution amount varies by state.
Workers Compensation– These are disability benefits offered to employees who are injured on the job or fall ill due to something job related. The requirements for this vary by state.

There are many other benefits you may wish to offer your employees, such as paid time off, flexible scheduling, the ability to work from home, retirement plans, pet insurance, and more. These optional benefits are typically a major factor when an employee is deciding if he or she wants to work for your company.

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