Benefits and Compensation

What Employee Benefits Are Required by Law?

When it comes to employee benefits, surprisingly few are required by law in the United States. For example, the United States, unlike most other countries, does not mandate that employers provide vacation days, sick days, or maternity or paternity leave.

That said, there are some benefits—mostly behind the scenes—that are mandated under U.S. law and are provided to employees, even if not all employees end up taking advantage. Here are some of the ones that employers are responsible to provide, by law:

  • Workers’ compensation insurance. The details vary by state, but every state carries some type of mandatory workers’ compensation insurance program.
  • Health insurance, as defined by the rules set forth in the Affordable Care Act for covered employers and employees.
    • Another example is health insurance continuation in the event of job loss—which is mandated under the Consolidated Omnibus Budget Reconciliation Act (COBRA). For employers that provide health insurance, they may have an obligation to continue that coverage under the COBRA regulations. But for those that do not provide health insurance, this will not apply.
  • Family and medical leave, as provided under the regulations of the Family Medical Leave Act (FMLA). This provides up to 12 weeks of unpaid leave for qualified employees working for covered employers as defined by the FMLA.
  • Payment of the employer portion of Social Security and Medicare taxes, as well as withholding and payment on behalf of the employee for the employee portion of both taxes.
  • Unemployment insurance. This requirement varies at the state level rather than at the federal level.
  • Time off for and/or reinstatement after military service, as required under the Uniformed Services Employment and Reemployment Rights Act (USERRA).
  • Time off to vote or for jury duty. The details vary at the state level, but nearly every state mandates these items.

Several of these benefits are only applicable to employers of a certain size rather than all employers; be sure to check the regulations for each if you’re in doubt that all apply to you.

As you can see, many of the benefits that are required by law are the ones that protect workers who are ill or injured or who are unable to attend work due to extenuating circumstances. Some of these, such as workers’ compensation insurance and unemployment insurance, are the type of benefits that most of us hope not to have to use, but we are grateful for when needed.

Mandatory Benefits: Other Considerations

Employers should remember that when they voluntarily provide other benefits, some of these will then be subject to regulations. Retirement planning is the perfect example. Employers are not required by law to provide any retirement planning benefit, but if they do, they must abide by the rules set forth in the Employee Retirement Income Security Act (ERISA).

There are also some requirements that only kick in under certain circumstances. For example, an employer may be required to provide reasonable accommodations for a disabled employee—and these accommodations may extend to flexible scheduling, leaves of absence, and other items that may be similar to employee benefits. These are not benefits in and of themselves, but they are a mandated requirement in these circumstances.

Finally, remember that there are additional requirements at the state level. For example, some states require separate disability insurance to be maintained for employees.

*This article does not constitute legal advice. Always consult legal counsel with specific questions.


About Bridget Miller:

Bridget Miller is a business consultant with a specialized MBA in International Economics and Management, which provides a unique perspective on business challenges. She’s been working in the corporate world for over 15 years, with experience across multiple diverse departments including HR, sales, marketing, IT, commercial development, and training.