As an employer and small business owner, you undoubtedly understand the importance offering your employees benefits. For many employees, salary is not the only factor in their decision to accept or refuse a job offer. With their health needs, a family to provide for, and planning for their future, it is understandable that benefits are of the utmost importance to employees.

Employee benefits fall into two categories. First, there are benefits which the law requires every employer to offer their employees. Secondly, there are optional benefits an employer can choose to offer in addition to required benefits. This article provides a thorough overview of required employee benefits, which include social security taxes, unemployment insurance, workers compensation, disability insurance, and leave benefits.

Tax Requirements

First, as an employer, you are required to withhold taxes from employee wages in line with the Federal Insurance Contributions Act. These withholding include both social security taxes and Medicare taxes. As their employer, you are legally required to withhold a certain amount from employee wages and deposit these with the Internal Revenue Service.

Additionally, employers are required to match their employees’ social security and Medicare deposits. The official Social Security website provides resources to business owners including guidelines, filing instructions, and social security number verification. Also, the Internal Revenue Service website provides instructions for paying social security taxes and due dates for payment.

Insurance Requirements

Next, employers are required to make certain insurance benefits available to their employees. According to the U.S. Small Business Administration, some businesses are required to provide unemployment insurance to their employees. Each state decides its laws concerning unemployment insurance. However, the U.S. Small Business Administration maintains a listing of each state's unemployment laws that you can access at the SBA's website.

Additionally, every state requires employers to carry workers’ compensation insurance, which can be obtained either through the state or a commercial provider. This information is also available through the U.S. Small Business Administration.

Also, a few states require employers to use disability insurance to partially replace employee wages in the case of a disabling injury or condition. The states required to offer disability insurance are California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico.

Employers may choose to offer health insurance benefits, retirement benefits, and incentive benefits to their employees.

Leave Benefits

Lastly, there are certain leave benefits that employers are legally required to offer employees. You may choose to provide jury leave, sick leave, bereavement leave, vacation leave, and personal leave. Those leave benefits are not required. However, employers are required to offer leave benefits that are qualified under the Family Medical Leave Act, or FMLA.

The United States Department of Labor clearly outlines the guidelines for leave under FMLA. This leave is an unpaid leave, and employees can qualify for up to 12 weeks of leave. Individuals qualify for leave under FMLA under any of the following circumstances:

• The employee has given birth to a child in the last year and needs time off to care for the child.
• The employee adopts a child or has a child placed with them through foster care within the last year, and the employee needs time off to care for the child.
• The employee needs time off to care for a child, spouse, or parent with a health condition.
• The employee has a health condition that disables them from performing their job duties.
• A qualifying event relating to a spouse, child, or parent is a covered military member.
• If an employee has an injured or ill service member in their family that requires care, they may qualify for up to 26 weeks up unpaid leave each year.

One requirement of leave under FMLA is that employees maintain their group health insurance plan during their leave. All public business owners are required to offer their employees leave under FMLA. Private business owners with more than 50 employees are required to offer FMLA leave as well.

Because employee benefits are an important part of the life of your employees and their family, they should be important to you as their employer as well. As a small business owner, beginning with ensuring you are compliant with legal benefits requirements is a great place to start. Seeking the help of an accountant, attorney, financial advisor, or payroll specialist for both required and optional employee benefits is recommended.