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Director of Insurance
As an employer, there are some benefits you need to provide employees to stay compliant. And others — while not required — can go a long way to keep you ahead of competitors. Read on so see all the basic requirements for small business owners. Or, our experts recently ran a webinar on this same topic. The full video is below if you’d rather have us walk you through it.
Workers’ Comp is likely a requirement in your state
Just about every state requires employers to offer some form of workers’ comp, except for Texas. Most companies are familiar with the large, upfront fees of traditional plans but may not realize that pay-as-you-go workers’ comp — and their lower costs — are an option.
Pay-as-you-go uses real-time payroll data to calculate your premiums, while traditional workers’ comp bases the costs on a guesstimate. It’s also likely you’ll be subject to an audit to see how accurate that initial estimate was, which can lead to more out-of-pocket expense (though sometimes you end up with a refund.)
Key takeaway: Many employers think traditional workers comp’ is the only game in town. But, pay-as-you-go workers comp can be a better fit for your cash flow — with much less hassle.
Mandatory plans making their way around the US
If you do business in one of the 14 states that have a mandate, you’ll need to offer employees access to a retirement program. Remember, the key term is access — you are free to pick the plan you think is the best fit for your organization — whether through a broker or the one your state offers. Requirements tend to vary by employee count.
We should point out these plans are not the same as a 401(k), which is a qualified plan and eligible for special tax benefits under IRS guidelines. Our guide on how to choose a 401(k) provider goes into more detail.
Key takeaway: While state-mandated retirement plans are becoming more commonplace, you are free to choose the program you like best. Also, while state plans usually don’t have costs to get started, they are generally one-size-fits-all. Private plans are much more flexible, and you’re likely eligible for tax credits to cover some of the administrative costs.
Short term disability can offer peace of mind
If an employee gets hurt or experiences a life-changing event, such as the birth of a child, short-term disability lets them take time away without loss of income. Are you doing business in California, Hawaii, Rhode Island, New Jersey, or New York? You’ll need to either provide coverage or access to it. It also applies to the commonwealth of Puerto Rico.
Key takeaway: Even if short-term disability isn’t a requirement where you do business, it can be a good idea to offer anyway. The insurance protects you and your employees – and lets your team know you have their well-being in mind. Also, it can be employee or employer-paid – so costs don’t have to be your entire responsibility.
Family and Medical Leave
Most companies are familiar with FMLA. It requires employers with 50 or more employees to provide employees with 12 weeks of unpaid leave – and job protection – for anyone who needs to take time away from work for personal reasons. Scenarios can include caring for a family member with a severe medical condition or a new parent staying home with their newborn.
Key takeaway: Some states require employers to provide paid leave benefits too. So be sure to take a look at state-by-state paid family leave requirements.
Health insurance helps keep people happy
For the most part, if you have 50 or more employees, you’ll need to offer health insurance or access to a plan. Even if you have a smaller team, it’s probably something to think about since 56% of employees consider health insurance a reason to stay with an employer or look elsewhere. So, if employee turnover keeps you up at night, it’s something to consider.
Key takeaway: While there is an investment to offer health insurance, attracting new talent can cost even more. So, even if not required in your state, it could be a way to encourage your top talent to stick around.
Next, our team discussed some great benefits for your employees, which can give you an edge over the competition. First, they talked about some eye-popping stats:
- 75% of employees say they are more likely to stay with an employer because of benefits programs
- 60% of people report benefits are perks are a significant factor when considering a job offer
- 80% of employees would choose additional benefits over a pay raise.
PTO makes a positive impact
Who doesn’t like paid time off? It helps staffers recharge their batteries and come back to the workplace refreshed. And according to our 2020 state of small business survey, it is one of the top two benefits employers offer.
Key takeaway: As you create your PTO policy, it can pay to think about how long you might require employees to work before they are eligible to earn it. Or if your team will accrue time or get a lump sum at the beginning of each year. Keep in mind that some state laws may require you to pay employees for unused vacation time – if they are terminated or resign.
Work from home continues to trend
While Covid-19 does contribute, work from home is one of those benefits continually on the rise. In fact, a whopping 60% of employees make work-from-home an option for their employees. It can prevent burnout and increase employee satisfaction. Some in the workforce would leave a job if they did not offer some type of hybrid work option.
Key takeaway: Employers understand employees want more flexibility. And increasingly are offering hybrid or fully remote work opportunities. Our guide to developing a work from home policy can help you roll out a plan at your organization.
Time off to volunteer
You may be familiar with paid time off, but what about volunteer time off? Typically companies provide one or two days off for employees to volunteer with a charity or organization of their choosing. It can be an effective team-building tool and a way to attract talent from generation Z.
Key takeaway: VTO is a growing trend and an employee benefit that could keep you a step ahead of the competition.
Commuter Benefits
Despite the increase of flexible work options, many individuals still commute to a workplace at least part of the week. And employers can provide them with pre-tax ways to pay for their travel expenses. Some states like New Jersey and New York even have taken steps to mandate commuter benefits programs.
Key takeaway: Commuter benefits are a nice perk to reduce travel costs for your team members who take public transportation or hit the road to make it to the office.
Back to school
Continuing education helps your team stay ahead of the curve but requires an investment. Consider tuition reimbursement as a benefit to your employees.
Key takeaway: Tuition reimbursement can reduce employee turnover, brings in knowledgeable workers to your business, and best of all, is tax-free under a certain amount.
More resources
Getting a handle on employee benefits can keep your business in good standing. It can also be an excellent way to thank your employees – and encourage them to stick around for the long run. If you are unsure where to start, you can get more details in our small business benefits guide.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.