Landing top-quality employees goes far beyond the salary. It also depends on the employee benefits that come with the position. While employment benefits can be limited to those required by law, some companies expand their offerings and perks to create a more competitive employee benefits package, which could make all the difference in recruiting the qualified employees you want.
What You Need to Know
The law requires employers to provide several benefits, including family leave, minimum wage and overtime.
Employers also offer several additional benefits to attract employees. Thes include health insurance, paid time off, and childcare benefits, among others options.
What Employee Benefits Are Required by Law?
To protect workers, the U.S. Department of Labor enforces more than 180 federal laws related to such issues as wages, overtime and unemployment insurance. The laws cover most workers, though there are some exceptions. For example, certain farm workers or theme park workers may be exempt from minimum wage and overtime pay laws.
Per the Consolidated Omnibus Budget Reconciliation Act (COBRA), employers with 20 or more employees must allow employees to continue benefits under their group health plan for a limited period of time after they lose their job, as well as certain other circumstances.
Disability & Workers Compensation
Five states — California, Hawaii, New Jersey, New York and Rhode Island — require employers to carry disability insurance for workers to support them if they’re out of work due to a non-work-related injury or illness. You’re not required to offer long-term disability coverage, though many employers offer it anyway. But you’re required under the law in all states except Texas to provide workers compensation insurance to cover expenses and lost wages when employees are hurt on the job.
Under the Family and Medical Leave Act (FMLA), employers with 50 or more employees must provide up to 12 weeks of unpaid leave to eligible employees for the birth or adoption of a child. Employees also can receive this leave if they, their spouse, their child or their parent has a serious illness. Their job is protected while they’re on leave.
You’re required to pay nonexempt employees at least the federal minimum wage under the Fair Labor Standards Act (FLSA). In 2020, the federal minimum wage is $7.25 per hour. Many states have their own minimum wage laws, and employees are entitled to the higher wage of the two.
Under the FLSA, nonexempt employees should get overtime pay at the rate of one and a half times their regular pay rate for all hours worked beyond 40 hours per week.
If employees lose their job through no fault of their own — for instance, a lack of available work — unemployment insurance benefits will provide income for a specific period of time. Each state administers its own unemployment benefits program.
What Are the Most Popular Types of Employee Benefits?
Along with the benefits required by law, you could offer additional benefits to your employees. These can be a good supplement to the salary package.
The benefits that aren’t required can really make an exceptional employment package
Many employers offer health insurance coverage through a group plan, in which the company pays part or all of employees’ insurance premiums. You can also provide funds in a special account to help employees offset medical costs not covered under insurance.
- Flexible Savings Account (FSA): You or your employee contributes up to $2,650 per year to this tax-free account, which they can use to pay qualified expenses.
- Health Savings Account (HSA): Your employee deposits money into this pretax account to pay expenses not covered by medical insurance. They must have a high-deductible health plan to qualify for an HSA.
- Health Reimbursement Arrangements (HRA): This account-based health plan allows you to provide preset, non-taxed reimbursements to your employee for qualified health insurance costs.
- Dental and Vision Insurance
These supplemental plans cover certain preventive services not covered under regular medical insurance, like dental exams or fillings, eye exams, glasses or contacts.
Paid Time Off
This includes vacation time, sick leave and personal days off.
Flexible Work Schedules
This allows employees to vary their work start and end times instead of working a traditional 9-to-5, 40-hour work week.
You can allow employees to work remotely either a few days a week or full time.
Tuition Assistance and Reimbursement
You can offer to help pay employees’ student loans following graduation as an enticement to work for you, or help pay for additional education so employees can more effectively do their job.
Childcare costs are a major expense for working parents, so you could help reimburse a portion of these costs or even offer childcare facilities onsite.
To help your employees stay healthy, you could offer free or reduced-cost fitness center memberships, provide gym membership reimbursements, or maintain free onsite fitness center facilities.
To help employees save for retirement, you could offer retirement plans such as 401(k) plans, pension plans, or Employee Stock Ownership Plans (ESOPs). You can choose to contribute to these plans.
To help an employee’s family following their death, you could provide life insurance to help cover funeral and living expenses.
As noted above, disability insurance is not required by law for most employers. However, you could offer this benefit to help employees pay expenses if they can’t work due to a non-work-related injury.
You could think outside the benefits box, offering free drinks and snacks in the breakroom, free T-shirts to wear on the job, free tickets to a sporting event in the company suite, or other extras. These can add to the enjoyment of working for your company.
Although state and federal laws require you to provide specific benefits to your employees, the benefits that aren’t required can really make an exceptional employment package. The choices you make will depend on what you want your employees to gain from working for you.