Employee Benefits for Employers - A Primer
A great employee benefits plan can help employers attract the best and most promising talent in 2020 and beyond. A valuable employee benefits package also keeps highly-qualified talent from leaving the company. However, many employers are unfamiliar with employee benefits. Talking with a business attorney or fractional general counsel can help guide you through the process. Meanwhile, check out this primer on employee benefits. It will help you understand some things to consider as you create an employee benefits package for your company.
Required vs. Optional Employee Benefits
Employment law requires employers to provide employees with several basic benefits. These benefits are not optional. Employers must include basic benefits in all employee benefit plans. The list of basic benefits may vary slightly based on state laws. However, common basic employee benefits required by law include:
Provide time off for an employee to serve on a jury, vote in elections, and perform military service.
Comply with FMLA (Federal Family and Medical Leave) rules.
Provide workers’ compensation benefits as required by state law.
Withhold and pay required employment taxes from an employee’s payroll and pay matching FICA taxes based on employee wages.
Unemployment insurance as required by state law.
COBRA benefits (required for certain employers) that allow employees to continue group health insurance policies at the employer’s group rate for a certain period after termination.
Contribute to disability programs in states that require employers to do so.
There are optional benefits that employers are typically not required to provide in most states. Examples of optional employee benefits include:
Retirement plans
Life insurance coverage
Health, vision, or dental plans (except as required by the Affordable Care Act for certain employers
Paid time off for vacation or holidays
Paid sick leave or personal leave (except as provided under FMLA)
Option to purchase company stock
Even though many employee benefits are optional, companies should strongly consider the advantages of offering a strong benefits package for their employees. Many individuals now search for jobs based on benefits and decide between potential employers based on the benefits offered.
Salaries are important, but employee benefits are a higher priority, especially when salaries are close. Sometimes, an individual may accept a job that pays a little less because it has a better benefits package.
Employers Can Tailor Benefit Package to Their Employees
Voluntary benefits are the main aspect of a great employee benefits package. Employers can choose benefits that their employees desire. For example, a company might offer pet bereavement, free life coaching services, or reimbursement for mental health services.
Millennials are attracted to a benefits package that includes assistance with student loan repayment. They also may be interested in benefits they will use in the future, such as benefits designed to help them when they are ready to begin a family, including benefits related to infertility treatments, pregnancy, and maternity leave. Flex-schedules and remote offices are other benefits that millennials may be interested in as they search for a job.
Customizing a benefits plan is a perk that individuals may be searching for when they apply for positions. For instance, offering a variety of benefits and allowing employees to choose a certain number of optional benefits to tailor a plan that meets their needs is highly desirable. Employees receive the benefits that are most important to them. Employers can offer a greater variety of employee benefits because they are not paying for all benefits for all employees.
Enhanced Health Care Benefits
The great majority of employees list health care benefits as their top priority, after salary, when searching for a job. Besides health insurance, employers can offer many optional health care benefits beneficial for the employer and the employee.
Many health care benefits lower healthcare costs for employers. For instance, paying for gym memberships, wellness programs, regular health screenings, and on-site clinics can help reduce the high cost of chronic-condition management by reducing the risk of developing these conditions.
Some companies offer quarterly or yearly contributions to an employee health savings account if they participate in a wellness plan. The contribution increases if the employee’s spouse also participates in the wellness plan. The key to any wellness program is to provide sufficient incentives to encourage employees and their spouses to participate in the wellness program.
Building a Competitive Employee Benefits Package for Your Company
Developing a competitive employee benefits package can be challenging. One way to approach the process is to ask your employees what matters most to them. Give employees choices to determine which benefits options they prefer.
Another approach is to research the employee packages being offered by your competitors and other companies. Researching employee benefits trends online is another way to learn more about employee benefits packages.
Lastly, consulting legal professionals, like a DC fractional general counsel, can be very helpful. In addition to discussing the variety of employee benefits available, a DC fractional general counsel can ensure that your company provides the required employee benefits and all other benefits meet or exceed state and federal laws for employee benefit programs.
Areas to Cover When Developing an Employee Benefits Package
Before finalizing your employee benefits package, double-check the package to ensure it covers the highest priority benefits that make packages competitive against other companies:
Health Insurance
Health and Wellness Benefits
Dental and Vision Insurance
Flexible Spending Accounts and Health Savings Accounts
Retirement Savings Plan
Paid Time Off (PTO), including vacation time, sick leave, bereavement, maternity leave, sabbaticals, and family medical leave
Flextime and remote work options
Training and development classes or tuition reimbursement
Life Insurance and Disability Insurance
Special benefits tailored to specific employees or your company
As you are designing a competitive employee benefits package, you must also keep a close eye on your budget. Balancing the need to attract great talent with your budget can be difficult, but it is possible to develop a package that attracts and retains top talent in your industry.
If you have questions about employee benefits, contact DC fractional general counsel Steve Thienel today. A fractional general counsel can provide the information you need regarding all matters related to employment law.
