Do You Have to Offer Small Business Employee Benefits?

COVID has caused an upheaval in employment in the US. About one-third of Americans have changed or lost their jobs during the pandemic.

As things begin to return to normal, businesses are looking to fill positions. But, companies are struggling to hire talent as the nation faces a worker shortage. One way companies are attracting employees is to provide better benefits for employees. 

Cost limits the number of benefits small businesses can offer. Your businesses’ benefits can include a variety of benefits, but it’s important to note that some benefits are required by law. Read on to learn which small business employee benefits are required and common employee benefits you should offer. 

Required Business Benefits

Federal and state laws require all businesses to offer certain benefits to employees. Your business should always stay up to date on required benefits. Some required benefits include the following: 

Social Security and Medicare Taxes

Your small business must pay the government a percentage of your employee’s wages for social security and medicare taxes. You can do this by withholding a percentage of your employee’s wages from their paychecks that you then pay to the government.

Another federal regulation is unemployment insurance. Small businesses must pay this to the federal government or state government to provide benefits to the unemployed. 

Worker’s Compensation 

Worker’s compensation provides money to workers injured on the job and unable to work. Worker’s compensation isn’t a federal mandate. Most states require businesses to have worker’s compensation insurance and pay into a state compensation fund.  

Health Insurance

The Affordable Care Act requires businesses that employ 50 or more full-time employees to carry health insurance. Although not required for all small businesses, many offer group health plans. If you provide health insurance, you have to offer it once new employees become eligible after 90 days. 

Finding an affordable health plan that works for you and your employees can be challenging. You can find a variety of health care plans and other common employee benefits at

Family and Medical Leave 

Businesses must provide employees with 12 weeks of unpaid leave for the birth of a child or to care for a sick family member. During these 12 weeks, their job is protected, and you must continue their health insurance.  

More Small Business Employee Benefits

Once you have your required employee benefits covered, your company should consider offering additional benefits to employees. The following benefits can set your small business apart from other companies looking to hire. 

Employee Retirement Plans

Retirement plans help employees ensure they are financially prepared to enter retirement. 401Ks are one of the most common types of retirement plans, allowing employees to use a part of their paycheck to invest in their retirement. With many 401k plans, employers can offer matching programs that allow employees to earn more for their retirement. 

Paid Time Off 

Paid and unpaid time off allows workers to take time away from work when they need it. Some vacation and time off is a benefit expected by many job seekers. Giving your employees time off helps avoid burnout and gives them flexibility. 

Wellness Benefits 

Physical and mental health is essential to your employee’s well-being. Your business can help provide access to mental health services. You can also offer incentives for employees to go to gyms and see wellness professionals to help employees stay healthy. 

Know the Right Benefits for Your Small Business Employees

Now that you know the difference between small business employee benefits, you can build a  competitive compensation package for your employees that is affordable for your business. With a good benefits package, your small business can attract and keep top talent. 

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