Government-Mandated Benefits Compliance Guide for 2020

In the United States, employers are legally required to provide certain employee benefits.The U.S. Bureau of Labor Statistics (BLS) defines them as benefits that facilitate the provision of retirement income and medical care, lessen financial burdens following job loss or disability, and provide coverage in the event of workplace injuries and illnesses.”

The following is a comprehensive look at the benefits U.S. employers must provide in accordance with local, state and federal law this year.

Social Security, Medicare, and Federal Insurance Contributions Act (FICA)

In accordance with federal law, employers and employees must both contribute to funds used to underwrite Social Security and Medicare. To comply, a certain amount of tax is withheld from the employee’s gross earnings and the employer must pay that amount. The amount is calculated based on specific formulas using the Social Security tax rate (6.2%), the Medicare tax rate (1.45%) and the employee’s gross earnings.

Workers compensation

This is insurance that employers must provide for workers to access in the event of a work-related accident or illness. Most employers provide this insurance through the official program administered by the state. However, this is not mandatory. As an employer you may also be able to provide this insurance through commercial insurance or through a self-insurance program.

Disability insurance

As of 2019, five states and one U.S. territory mandated that employers provide limited (short-term or temporary) disability insurance. These insurance plans allow for some income replacement if workers need to take extended time off for non-work related injuries, illnesses, childbirth and recuperation from childbirth.
As an employer, you must provide this type of insurance in:

  • California
  • Hawaii
  • New Jersey
  • New York
  • Puerto Rico
  • Rhode Island

Family and medical leave

In accordance with applicable laws, private employers with at least 50 workers and all public sector businesses must make the following available:

  • A maximum of 12 weeks;
  • Of job-protected, unpaid leave;
  • During a 12-month period;
  • To be used for qualifying family and medical reasons; and
  • To handle qualifying emergencies.

In this context, qualifying family and medical reasons include the birth and care of the employee’s child; foster care or adoption of a child; care for an immediate family member (defined as a parent, child or spouse) with a serious illness or injury; or care for the employee’s illness or injury (as long as it is serious).
Furthermore, employers that meet the criteria listed above must ensure that their employees keep their group health benefits while they are on family or medical leave.

The businesses as well as described above must also provide:

  • No more than 26 workweeks of unpaid, job protected leave;
  • In a single 12-month period;
  • In accordance with the Military Caregiver Leave.

Health insurance

While smaller businesses do not have to offer health insurance, most do as a matter of course. For larger businesses – those with 50 or more full-time employees, including full-time equivalent employees – the Affordable Care Act (ACA) provides extra incentive for providing this benefit. This is because failure to do so puts them at risk for potential assessment if they do not offer sufficient and reasonable coverage to their full-time employees and their dependents.

*The preceding information is presented as a general guide for U.S. employers. Requirements may vary based on the size of your business and where it is located. Consult a qualified employment lawyer in your area for specific information about legally mandated and discretionary benefits.

Featured Image Credit: Nick Youngson / Alpha Stock Images via The Blue Diamond Gallery / CC BY-SA 3.0

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