By Arlene Chandler
The Affordable Care Act, requiring employers to provide health care to fulltime employees, has started many conversations about what employees are entitled to in the workplace. This leads to an important question, especially for small businesses: is what is legally required enough to draw in quality employees? Most employees, especially the ones worth pursuing, will likely say no.
Along with the mandated medical insurance that businesses must now offer their fulltime employees, entrepreneurs should also consider providing other benefits not required by law. Here’s what’s required and how you can go beyond.
Benefits that US Law Requires
Not everything you offer your employees will come from the goodness of your heart. US law dictates that employers must include specific benefits in their package. On pain of federally levied fines, small businesses must offer the following:
- family and medical leave, according to the Family and Medical Leave Act (FMLA)
- workers compensation
- time off for governmentally mandated events (jury duty, military service, etc.)
- unemployment and disability insurance
- social security taxes
Other laws that will apply to you will differ from state to state and depending on the size of the company in question. Familiarize yourself with the SBA federal requirements and your state requirements so that you don’t find yourself facing fines and tax penalties incurred by infractions. These matters generally fall into the jurisdiction of the IRS and the Department of Labor when it comes to legal action, so you may want to hire a savvy lawyer to help you avoid catching the attention of these watchdogs for the wrong reasons.
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Why Should Small Businesses Expand Benefits?
Some small business owners might be thinking there’s no way they can afford to put together a large benefits package to offer. Particularly newer companies will feel this pain. While it’s true that startups and small businesses will likely struggle with larger benefits packages, there is a very real incentive for them to put time, effort, and revenue into then. Especially for a smaller business, having a steady and happy pool of trusted employees is crucial for success.
Happy, career-minded employees will look for a company that offers comprehensive benefits packages. For startups, this goal might be further off into the future, but growth will require a similarly steady and happy core of employees to act as a springboard for advancement.
So what makes for an excellent benefits package?
One of the largest incentives you can put into a benefits package is extra insurance coverage. This might include the standards of dental and vision coverage, maternity riders, and income protection to help cover employees during incapacitation due to illness and accident.
Paid Time Off
Colloquially shortened to PTO, paid time off is something that many look for in a company where they’ll look to have a committed career as opposed to a short term job. There are plenty of desirable jobs that don’t offer PTO, but this is a major lure to employees. Almost all companies will offer PTO for major holidays, but many will also offer around two weeks of PTO per year for long term employees, flex time, and other options.
To make an employee benefits package that will attract the best of the best and encourage them to stay, you should also consider offering support in planning their retirement. Though there are sensible reasons for an SBA not to pursue a retirement plan option, businesses do receive tax benefits in exchange. When considering this option, make sure to review the Employee Retirement Income Security Act (ERISA), which has standards set in place for any company that chooses to offer pensions to employees.
A growing trend is for companies to provide routes to furthering their employees’ educations. Many will arrange for licensing classes and either reimburse employees for their tuition or negotiate a discount. This might be the most important benefit you can offer employees to show them that you are investing in their future.
Whatever you end up offering your employees, make sure you actively communicate these benefits to your employees. Through diligent research and a genuine motivation to improve your employees’ quality of life, your benefits package will represent the best of what your company offers to its workers. This ethos will reflect well on your company by improving its reputation and culture- and help to ensure that you can recruit the very best in your field so you can grow your business right.