The term mandatory employee benefits refers to the programs all employers are legally required to provide their employees. Mandatory benefits include unemployment insurance, workers' compensation, and disability insurance. Companies with fifty or more employees are also required to provide their employees with family and medical leave.
While state law can be more generous, employers are required to provide employees with certain benefits under federal law. Generally, these benefits will provide the employee with some form of compensation or time away from work, which may be unpaid. The following are generally recognized as mandatory employee benefits:
- Compensation: employers must pay their employees an hourly rate that is not less than the federal minimum wage.
- Civic Duties: employers must allow their employees to take time away from work to fulfill their civic responsibilities such as jury duty, to appear as a crime victim or as a witness in a court proceeding, to elect government officials, and to serve in the military.
- Unemployment Insurance: if a worker loses their job through no fault of their own (downsizing, restructuring), they can apply for unemployment insurance, which provides a source of income (typically half their salary) for up to twenty six weeks.
- Workers' Compensation: offers protection to employees that miss work as a result of illness or injury that occurs while performing the duties of their job. Workers' compensation not only reimburses the employee for loss of pay, but also for their medical expenses. Note: Federal laws do not require employers to provide their employees with health insurance coverage.
- Disability Insurance: provides financial support to employees that are injured or ill and are not able to perform the functions of their job. Disability insurance provides partial wage replacement and is required in the states of California, Hawaii, New Jersey, New York and Rhode Island.
- Family and Medical Leave Act: companies with fifty or more workers must also provide employees up to twelve weeks of job-protected, unpaid leave for significant family or medical reasons, including paternity leave, adoption, foster care, and to care for a family member that has a serious health condition.
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