Employers provide employee benefits for several reasons. See them below:
(1) certain laws create mandatory obligations on employers to provide benefits, such as unemployment compensation,
(2) employers desire to provide certain benefits to employees at rates that are less expensive than individual employees could secure them, such as group health insurance,
(3) not all employees are motivated and energized by the same thing, such as money, and
(4) employers wish to be able to take advantage of certain tax breaks by offering benefits versus monies to employees.
Employers must contribute to the Old Age, Survivors, Disability, and Health Insurance program known as Social Security through a payroll tax shared by employers and employees.
Employers must also pay federal and state taxes for unemployment insurance, based on each employer’s experience rating.
State laws require that employers purchase workers’ compensation insurance. Under the Family and Medical Leave Act, employees who need to care for a baby following birth or adoption or for an ill family member must be granted unpaid leave of up to 12 weeks.
Learn more about employee benefits and compensation BizFilings.com and SBA.gov.