What are mandatory benefits?
Employers are obligated by law to give mandatory benefits, which are also known as statutory benefits, to their employees. Worker’s compensation insurance, unemployment insurance, and, in some states and localities, paid sick leave are examples of mandatory benefits for the employees.
Type Of Benefits Provided
Here are some of the types of benefits provided:
- Social Security – This term refers to the disability and retirement payments provided by the government. Payroll taxes cover half of the cost of such perks for employees.
- Workers’ compensation – This is a term that refers to the benefits that employees receive when they are injured on the job. Employers are responsible for the whole cost of the insurance.
- Unemployment insurance – This type of insurance assists jobless people in making ends meet until new work can be obtained. Employers are responsible for the entire cost through payroll taxes.
- Medical leave – Every firm with more than 50 workers are required to give these benefits to all employees.
- COBRA- This law mandates health coverage to be available to all the employees upon their termination. This law should cover the employee for at least 18-36 months.
- Paid Family Leave- Provides paid leaves to the employees so that they can spend some quality time with their family. These kind of leaves help employees to reduce their stress and deal with the emergencies in their family.
These kind of benefits organization by improving the retention rate of employees in the organization. An exemption from mandated benefits is provided to all the self-insured companies under Federal Employment Retirement Income Security Act. Those companies who don’t purchase health insurance coverage of their employees instead they bear the cost incurred on their health by employee are referred to as self- insured companies.