Choosing an employee benefits plan for your company is an important task, and one that involves walking a delicate tightrope. On the one hand, you know that offering great benefits to your employees creates loyalty and boosts morale; on the other hand, you need to be realistic about your company’s finances and just how much you can offer without hurting your income.
Balancing these two needs is not easy, but it is most definitely doable. In fact, that’s what Corporate Finance specializes in: Employee benefits plans that benefit both employer and employee.
To help employers make the best choice, we’ve started this blog that will be packed with useful information and the latest updates in the world of employee benefits, HR, and all the gray areas in between.
We’ll start off by reviewing the basics: What exactly is included in an employee benefits plan?
Employee benefits plans consist of two parts: One part has mandated benefits, benefits that are required by law, and the other part consists of voluntary benefits, benefits which are offered by the employer “out of the goodness of their hearts,” so to speak. Of course, it’s not pure altruism, but employers know that offering more than the bare minimum of benefits will increase their worth as a company, attract better-qualified candidates for open positions and create a valued-employee culture.
These are the main mandated components of an employee benefits plan:
- Social Security Taxes – Employers must pay social security taxes at the same rate paid by their employees. The Social Security Administration page for employers is a great resource for how to make sure your company is complying with the rules of social security taxes.
- Workers’ Compensation Insurance – Employers can offer this through a commercial carrier or through the state Workers’ Compensation Insurance program. To see what your state offers, you can visit the Workers’ Compensation page of the U.S. Small Business Association.
- Unemployment Insurance – The tax on unemployment insurance is only required to be paid by businesses under certain conditions. If your company is required to pay these taxes, you must register with the state’s workforce agency, which can be found here.
- Disability Insurance – Certain states are required to provide employees with partial salary replacement in the event of a non-work related injury or illness. These states include California, Hawaii, New Jersey, New York, Puerto Rico and Rhode Island.
- Family and Medical Leave Act (FMLA) – This act requires employers with more than 50 employees to provide up to 12 weeks of job-protected, unpaid leave to employees who meet the requirements.
What are voluntary benefits?
While state-mandated benefits are a no-brainer (you do it, or suffer the consequences), voluntary benefits are what separate the good employers from the great employers, and it is here that balancing your company’s finances and employee good will becomes delicate.
There are a whole slew of voluntary benefits plans employers can choose from, which can include some, all or a variation of the following benefits: Life insurance, dental insurance, medical insurance, leave benefits (holiday/vacation/sick leave days), auto and home insurance, vision, disability and more.
Don’t Go At It Alone
When choosing the employee benefits plan for your company, it’s important that you have the proper guidance; someone who will understand both your needs as an employer and the needs of your clients. That’s where Corpfi comes in. With over 20 years of experience, we have the expertise and the information to help make the best decision for all parties involved.