5 Employee Benefits Required By Law in 2023

Especially as an employer should know the employee benefits required by law, not every type of employee benefit is mandatory by federal or state law. 

Employers also consider giving different types of employee benefit packages to run the business properly with all management and work.

The responsibility of employee’s health, vacation, and work/life balance are in the company’s hands; therefore, employers need to provide employee benefits programs.

So, let’s see which of the following benefits is required by federal or state law. We also cover the requirement or eligibility of legally required employee benefits.

Employee Benefits Required By Law

Family Medical Leave Act (FMLA), Social Security & Medicare, Health Insurance, Disability Insurance, and Unemployment Insurance are employee benefits required by law.

employee benefits required by law

Here are five legally required employee benefits:

  1. Family And Medical Leave Act (FMLA)
  2. Social Security & Medicare
  3. Unemployment Insurance
  4. Health Insurance
  5. Disability Insurance

1. Family And Medical Leave Act (FMLA)

family and medical leave act (FMLA)
Family And Medical Leave Act (FMLA)

Family And Medical Leave Act of 1993, shortly FMLA provides employees unpaid leave for family and medical reasons. President Bill Clinton first signed the Family And Medical Leave or FMLA.

The United States Department of Labor (DOL) makes Family and Medical Leave mandatory employee benefits. In the U.S., Every company offers FMLA benefits to their employees.

Pregnancy, an employee’s own serious health condition, family’s sick member, Birth of a new child, and more reasons are examples of Family and Medical Leave benefits. The FMLA is still employees’ most desirable benefit in 2023.

Family and Medical Leave given for maintaining the balance of employee’s job and family accountability. FMLA as an employee benefit brings employees job satisfaction.

Requirement for Family And Medical Leave Act:

  • Employees have to work at least 12 months for employers
  • Companies have to have 50 or more employees within 75 miles
  • Employees at least work 1,250 hours over the past 12 months period to eligible FMLA benefits.

2. Social Security & Medicare

social security & medicare
Social Security & Medicare

Every American employee and employer must pay Social Security and Medicare taxes. Even self-employed people are also required to pay Social Security and Medicare taxes.

Social Security and Medicare benefits programs require employees and employers to pay while they are working and get the future social benefit.

The U.S. government ensures employees’ financial stability after they retire or are permanently disabled by the Social Security benefits.

For people 65 or older, Medicare provides their health insurance coverage to protect them from hospitalization, prescription drugs, and more medical conditions.

President Roosevelt started Social Security and Medicare on August 14, 1935, and this law is still mandatory to pursue in the United States.

Requirement for Social Security and Medicare:

  • Citizens or Permanent residents of the United States.
  • People who are 65 or older.

3. Unemployment Insurance

unemployment insurance
Unemployment Insurance

Unemployment insurance is also known as unemployment benefits, unemployment payment. Unemployment insurance protects employees’ income when employees lose their job.

The state administration designed unemployment insurance. In the United States, every state has its own law for unemployment insurance programs.

The United States Department of Labor supervises the unemployment benefits. And part-time employees are also eligible for Unemployment Insurance.

Employees must apply to receive unemployment insurance; otherwise, employees do not get the unemployment benefit.

Unemployment insurance helps employees provide food for their family, pay rent on time, and help them find employment. Therefore, this employee benefit is important.

Eligibility for Unemployment Insurance:

  • Employees must meet work and wage requirements
  • An employee who quit his job or is fired will not be eligible for unemployment insurance (UI).
  • Employees must meet their state’s additional requirements

4. Health Insurance

health insurance
Health Insurance

Most of us know about health insurance because health insurance is another legally required benefit. Health insurance is the non-cash compensation in addition to an employee’s normal salary or wage.

Employers provide employees health insurance to protect employees’ welfare and health.

Since March 23, 2010, the Affordable Care Act has started, and health insurance has been under ACA. The Affordable Care Act is also known as Obamacare.

State or federal required health insurance covers employee emergency care, hospitalization, newborn care, mental health, and more.

Requirement for Health Insurance benefits:

  • Have to be citizens of the United States
  • Companies have to have 50 or more full-time employees.

5. Disability Insurance

disability insurance
Disability Insurance

There is some similarity between disability insurance and medical coverage. Disability insurance is one of 4 major employee benefits.

Disability insurance is not the legally required employee benefit, but in some states of the United States, disability insurance is required by law.

Disability insurance protects employees’ income from long-term and short-term disability. Disability Insurance mainly has two types: Long-Term Disability (LSD) and Short-term disability.

If your states require disability insurance, employers must provide their employee disability insurance benefits.

States Where Disability Insurance is Mandatory:

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

Final Thoughts

Employers must follow up with states or federal law to do business. And employee benefits are also an important factor in running a business. That’s why companies must know which employee benefits are required by law.

Most of the legally required employee benefits are eligible for full-time employees.

Many common employee benefits are not required by law; that’s why you must check the employer’s employee benefits packages before getting the job.

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