Running a business successfully is fairly challenging, especially in this fast-changing business arena. The legal obligations for businesses are continuously evolving, and with the rising numbers of obligatory employee benefits, it happens to be quite difficult for employers to keep the right track of them. To assist business owners understand the benefits they are obligated to provide their employees ranging from health benefits, paternity leave, and so on as per the law, the distinguished personality Charles Spinelli has narrated the subject in an easy-understandable manner.
List of Employee Benefits Mandated By the Federal Government:
Social Security Contributions and Medicare
The objective of Social Security benefits is to ensure employees will have a source of income after retiring or being permanently disabled due to any cause. Similarly, Medicare is intended to provide coverage of health insurance to Americans aged 65 or above or victims of disabilities and specified medical conditions.
Both are federally mandated employee benefits. Social Security taxes and premiums for Medicare are to be paid by both employers and employees. It is deducted from the employees’ payroll before paying them wages/salaries.
Workers’ Compensation Insurance
Another major benefit that employers are legally obligated to provide their employees is workers’ compensation insurance. This benefits the workers to get coverage of medical treatment, rehabilitation, replacement income, or paid leaves apart from survivor’s benefit for ensuring the financial security of the family of an employee who dies due to any on-the-job accident.
Unemployment Insurance
In the event employee losses his/her employment unwillingly, unemployment insurance will pay compensation of partial income replacement to them for a specified time. Both employers and employees are obligated to contribute to the unemployment insurance system, which is under the governance of the federal or state level.
Health Insurance
With the enactment of the Affordable Care Act (ACA) lately, employers with full-time employees of 50 or more are legally obligated to provide healthcare coverage to their employees. The employers are supposed to report the total sum or value of health insurance on each employee in W2-forms to the insurer. Similarly, they have to furnish the details using the same form with the IRS with clarification about the types and costs of insurance plans that they will allow their employees.
According to Charles Spinelli, employers need to note carefully that if the health insurance offer is not justifiable for full-time employees, it can lead to further investigation and possible penalization by the federal government.
Family Medical Leave
Providing employees with family medical leave as per the FMLA Act has become mandatory for employers with 50 or more employees. The law requires employers to allow their employees unpaid leave for 12 weeks while ensuring their job security.
The law intends to help workers retain the balance of their demands towards family and medical needs without being worried to get fired for taking long-term leave. An employee is eligible to apply for FMLA leave after the birth of a child, taking care of a spouse, or family loved one in serious medical condition, or caring for their personal health conditions.
To be eligible for FMLA leave, employees need to meet the following criterion.
- Working for the employer for a minimum of 12 months or more.
- Have devoted a minimum of 1,250 hours to the workplace before having the privilege.
The benefits that employers offer to their employees are what attract talented employees and help retain them. Among those benefits, the above-stated are mandatory for employers. Providing additional employee benefits is optional to employers which may include, home loan facility, conveyance allowance, paid leave vacation, paid sick leave, and more.
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