Small Business Tips
Small businesses attract top talent when they design employee benefits plans with standard options and creative new perks. Additionally, some federal, state and city laws require that employers provide some benefits.
Here’s what to know about employee benefits plans for your business.
Employee benefits include a broad group of resources that have a positive impact on the financial, physical and emotional well-being of employees and their families. They are diverse and range from the somber to the frivolous. Life insurance and free tickets to baseball games are both employee benefits.
Benefits laws are complex and change with new applicable legislation. The information provided here represents a casual introduction to the topic. It should only serve as a guide to begin your employee-benefits research.
Private-sector employee benefits fall into two broad categories for employers: optional and those required by law.
Federal laws require that US employers of all sizes provide these benefits:
Federal laws require that US employers with 50 or more full-time employees provide these benefits:
Employers with more than 15 employees are required to comply with the Americans with Disabilities Act (ADA). The ADA prohibits employers from discriminating against individuals with disabilities. The ADA includes regulations on employee compensation and privileges of employment.
The ADA may not outline any specific benefit requirements; however, employers should understand the spirit of the law. Benefits offered should include options of equal value and accessibility for those with disabilities.
State and local laws may also impact employers. Employers in some states and cities must provide paid sick leave for their employees. Some cities have sick pay laws that differ from state laws or have local laws where there are no state regulations.
Along with the legal requirements, offering benefits enables small businesses to attract and retain talent. Top candidates will often be able to choose from a variety of roles. Offering benefits could be the difference between landing your ideal employees and seeing them join a competitor.
The following benefits are part of many standard packages. Full-time employees expect some version of these benefits.
Some employers offer benefits to encourage employees to join their companies. These may include trips to visit employer locations, relocation assistance and hiring bonuses.
Employers offer health-related benefits for employees, their spouses, and children. Some employers also provide these benefits to domestic partners. Employers pay for health benefits or require a contribution from employees.
To learn more about employer costs for health benefits, visit the non-profit Kaiser Family Foundation (KFF) website. The KFF surveys examine employer health care costs each year.
Traditional health benefits may include:
Employees expect a benefits package to include some PTO. The US is conservative when it comes to providing PTO. While US employers aren’t required to furnish any PTO, a European Union (EU) employee receives at least four weeks of paid vacation by law.
Vacation benefits often vary by time with the company and an employee’s seniority. Employers grant vacation days upon hiring or require time off to accrue over time.
When you hire a senior staff member, prepare to match or exceed the amount of PTO they receive from their current employer. Though a senior employee may be new to your company, most expect to retain the level of PTO benefits they’ve earned at other employers.
Like vacation days, employers grant sick leave days upon hiring or require them to accrue. The Bureau of Labor Statistics (BLS) reports that “On average, workers in private industry received seven days of sick leave per year at one year of service.” Providing sick leave to employees benefits your entire workforce. When sick employees stay home, they get healthy sooner and limit their colleague’s exposure to illnesses.
Employers offer personal days or floating days off so employees can participate in holidays or use them as they please for personal reasons. Personal days are scheduled or used to cover an absence the employee did not expect. For instance, an employee may need to take a child to an unexpected medical appointment or have a vehicle repaired.
Some employers offer paid bereavement leave if a close family member of an employee dies. The terms of this leave vary. Employers may grant longer bereavement leaves if an employee has to travel to attend a funeral.
Benefit plans often include life, disability, and accidental death and dismemberment insurance.
Additional benefits offered include:
Employers experiment with new benefit offerings to:
More workplaces now allow pets and include them in their benefits packages. Pet-related benefits include:
Unlimited PTO works for responsible employees. Salaried employees are trusted to set their daily work schedules, so there’s evidence to suggest they won’t take advantage of unlimited days off. Unlimited PTO eliminates the need to document the accrual of vacation days and the payout of unused days at termination.
Consider a range of benefits when you design a plan for your employees. As your business grows, expand your benefits plan.
