What fringe benefits should you be offering to your employees?
What employee benefits should you offer?
- Paid time off
- Commuting + Mileage Reimbursement
- Health insurance plans (Also vision and dental)
- Bonuses
- Paid Sick leave
- Flexibility
- Wellness incentives like gym memberships and company fitness courses
- Maternity and parental leave
- Overtime pay
- 401k matching plan or retirement savings plan
What employee benefits should your business offer?
What Employee Benefits Should Your Business Offer?
- A valued employee asks for a health plan
- You lose a potential hire to a competitor with a 401 (k)
- You'd like to maximize your own retirement savings
Are You maximizing your employee benefits?
Autumn is a good time to consider is open enrollment for employee benefits. Many companies host open enrollment in the fall months. Are you maximizing your employee benefits? | The Kansas City Star
Should you offer flextime to your employees?
Here are a few valid reasons why you should give it a go:
- Higher employee satisfaction and retention. Since flexible working provides your employees with more time to attend to their personal needs, they will be less frustrated about their lives and become ...
- An opportunity to attract top talent. ...
- Safer work environment. ...
- Improved productivity. ...
- Greater cost-efficiency. ...
Why do employers offer different types of benefits to their employees?
Some employers do offer benefits to part-time employees in order to attract quality applicants and increase selectivity of candidates. Full-time employees are further divided between exempt and non-exempt employees. Non-exempt employees are compensated based on an hourly wage.
Can a company have different rules for different employees?
In short, employers may have different policies for different departments or job categories if those polices comply with existing federal and state laws. Employers must also balance business needs with employee morale issues differing policies may create.
Can different employees get different PTO?
Yes, you can offer different time off packages to different employees. When it comes to PTO, you're legally allowed to offer different structures to different employees, as long as the basis for the different employee benefits isn't grounded in any type of discrimination.
What are the 4 major types of employee benefits?
There are four major types of employee benefits many employers offer: medical insurance, life insurance, disability insurance, and retirement plans. Below, we've loosely categorized these types of employee benefits and given a basic definition of each.
Is favoritism illegal in the workplace?
Favoritism as Illegal Discrimination If workplace favoritism is based on protected characteristics, then it is illegal discrimination. For example, if a manager promotes only men or gives the best assignments and shifts to employees who share his religious beliefs, that would be discrimination.
What is it called when your boss treats you differently?
Favoritism – treating an employee differently because of a personality conflict – is legal, even though employees often think it's unfair. A classic example, as explained by EmploySure, is nepotism, which occurs when a boss promotes a sibling or child over superior performers.
Can you offer 401k to some employees and not others?
Traditional 401(k) plan You can contribute a percentage of each employee's compensation to the employee's account (called a nonelective contribution), you can match the amount your employees decide to contribute (within the limits of current law) or you can do both.
Can I have different waiting periods for different groups of employees?
Yes! You can assign different waiting periods to different groups in your company. The only caveat is that you need to make sure each group is treated in the same way and officially established as a non-discriminatory class of employees in your benefits plan.
Why do employers need to offer benefits and services?
Respect. Offering benefits shows your employees that you understand and respect their needs. Going without health insurance can be a risky decision, so if you offer a benefits package that includes health insurance, you are showing your employees your concern for their well-being.
What are 3 types of benefits employers offer their employees?
The most common benefits are medical, disability, and life insurance; retirement benefits; paid time off; and fringe benefits. Benefits can be quite valuable. Medical insurance alone can cost several hundred dollars a month. That's why it's important to consider benefits as part of your total compensation.
How do you administer employee benefits?
5 Essential Steps in Benefits AdministrationDecide which benefits to offer. ... Manage benefit costs. ... Administer benefits efficiently. ... Maintain compliance. ... Align benefits to your employees' needs.
What are 5 employee benefits?
Here is a list of the top five types of benefits employers can offer to employees - each can be a valuable tool for recruiting and retaining employees.1) Health Benefits. ... 2) Retirement. ... 3) Workplace Flexibility. ... 4) Wellness Program. ... 5) Tuition Reimbursement.
Can Employers Offer Different Benefits to Different Employees?
A common question that human resource professionals all over the country are asking is: “ can my company offer different benefits to different employees? ”
When Can Employers Offer Different Benefits to Different Employees?
In answering this, it’s best to start with the answer to a slightly different question, “what do we have to do?” Under the Affordable Care Act, employees with fifty or more employees must either offer health care coverage to all full-time employees, or they must pay a fee.
Should Our Company Offer Different Benefits to Different Employees?
This is where things get tricky, and consultation with an expert is key! According to the Society for Human Resource Management, under the PPACA (Patient Protection and Affordable Care Act), “fully insured plans providing more generous premium subsidy levels to highly compensated employees will be in violation of PPACA nondiscrimination rules once final regulations are issued and enforced on this provision.” While that time hasn’t yet come, it’s something human resource professionals should have on their radar for the future..
What is similarly situated employee?
Similarly Situated Employees. If an employee is in a distinct group of similarly situated individuals, their employer can impose different eligibility provisions, costs, and various restrictions for their benefits. However, these distinctions must reflect the employer's usual business practice and relate directly to the employee's status within ...
Do employers have to provide the same coverage?
Technically, there are no federal laws that require an employer to provide benefit plans with the same coverage to their employees. In fact, employers can offer different benefits to different employees, as long as they treat " similarly situated individuals " equally. That means that those within a "class" that the business created, ...
Can an employer provide lower level benefits to an employee based on a prohibited factor?
Under the Equal Employment Opportunity Commission Compliance Manual of Employee Benefits, Section 3, an employer cannot provide lower-level benefits to an employee based on a prohibited factor (color, race, religion, national origin, age, sex, disability, or genetic information). This conduct is illegal and cannot be done.
Can paralegals receive different benefits?
Each of the various groups, including the partners, associates, and paralegals can receive different benefits without breaking any laws- as long as the firm does not abuse this policy by assigning employees with similar roles into different classes.
Is it legal to divide employees into groups?
It is legal for an employer to divide employees into groups based on the individual's position within the business. For instance, take a workplace that has many different hierarchy levels, such as a law firm.
Can you offer health benefits to only female employees?
These benefits are not based on discriminatory criteria and that everyone in the "class" is treated equally. For example: You can provide health benefits to full-time employees. However, you cannot offer these health benefits to only your female employees or employees without a disability. It is permissible to allow two weeks ...
What are the benefits of an employee?
Benefits that are required by law include: unemployment insurance, family and medical leave (FMLA), workers' compensation, time off for military service and other required service, ...
Why are optional benefits not extended to part time employees?
Usually, optional benefits are typically not extended to part-time employees because benefits are expensive and a major reason for part-time employment is cost savings on labor. Some employers do offer benefits to part-time employees in order to attract quality applicants and increase selectivity of candidates.
What is the difference between full time and non-exempt employees?
Full-time employees are further divided between exempt and non-exempt employees. Non-exempt employees are compensated based on an hourly wage. Exempt employees are paid higher wages that are based on longer periods of time than hours. Benefits can factor heavily when it comes to total compensation for exempt employees.
What are the benefits of a full time employee?
Common benefits that are not required by law include retirement plans; health, dental and life insurance; and paid vacations. Only employers with over 50 full-time employees are expected to provide health coverage to 95 percent ...
Why do employers report hours worked?
Employers are required to report the number of hours worked by employees so that the government knows how many full-time and part-time employees are working for a company. This provides information for enforcement of regulations and the ACA if necessary.
What is discrimination in employment?
Discrimination, according to the Equal Employment Opportunity Commission, is the selective offering of benefits on the basis of characteristics such as race, religion, gender identity, sexual orientation and disability. Employers must be vigilant in ensuring that the benefits offered to multiple classes of employees do not violate laws ...
What percentage of employees are required to have health insurance?
Only employers with over 50 full-time employees are expected to provide health coverage to 95 percent of employees or face a penalty. Benefits beyond those required by law are considered to be part of an employee's total compensation.
What are the laws surrounding benefit eligibility?
When it comes to the laws on eligibility for health benefits, the rules are a little different depending on how big your organization is.
How can employers legally restrict eligibility or offer different benefits to different employees?
If you’re considering offering different benefits to different employees, you need to make sure you’re doing it legally. Employers that want to restrict benefit eligibility to certain employees, or offer different benefits to different employees, must base their decisions on bona fide employment-based classifications.
What discriminatory practices do I need to avoid with benefit eligibility and benefit features?
Employers can restrict health benefits eligibility to certain employees as well as offer different levels of benefits to different employees. However, they can’t make these decisions on a discriminatory basis.
What about highly-compensated individuals?
While it is acceptable to offer different benefits to different employee classes, employers also need to be careful about discriminating in favor of highly-compensated individuals (HCIs).
How PeopleKeep can help you offer a compliant health benefit
Employers who want to offer different health benefits to different employees can do so worry-free through a health reimbursement arrangement (HRA) with PeopleKeep.
Conclusion
Organizations can absolutely offer different benefits to different employees, as long as they use job-based classifications to ensure they don’t discriminate and are following the IRS established rules on employee classes. Want help offering a compliant health benefit? PeopleKeep is here to help!
What are statutorily mandated benefits?
For example, statutorily mandated employment benefits include workers' compensation, unemployment compensation, family and medical leave, and military leave.
How long do you have to postpone benefits?
Some organizations postpone benefits eligibility for new employees for a certain amount of time, such as 90 days from date of hire. However, others elect to give new employees benefits immediately as a recruitment incentive.
What is a nondiscriminatory basis for benefits?
Nondiscriminatory eligibility requirements. One example of a clearly nondiscriminatory basis for benefits eligibility is to require a set period of service. Required service periods may be as short as a few weeks or months (typically for paid days off and health insurance) or as long as a full year or more (for participation in pension plans).
Do you have to provide the same benefits to all employees?
You generally do not have to provide the exact same benefits to all employees, but you do have to offer the benefits on a nondiscriminatory basis.
Is health insurance discriminatory?
On the other hand, if the benefits offered are based on the category of employment as opposed to personal characteristics, that distinction generally will not be considered discriminatory.
Is a highly compensated employee taxable?
In other words, plans that " discriminate" in favor of highly compensated employees may result in all or a portion of the benefits being treated as taxable income to those employees.
Can part time employees get health insurance?
It is less common for part-time employees to receive health insurance benefits , and temporary employees (employees who typically work for a specific, limited period of time) often are not eligible for any benefits.
Can a distinction be based on health factors?
While distinctions cannot be based on any of the health factors listed above, employers may provide different health benefits to different groups of employees, so long as the individuals are not “similarly situated individuals.”. Any employee classifications must be based on a bona fide employment-based classification consistent with ...
Can an employer impose different eligibility provisions?
If the individuals are in distinct groups of similarly situated individuals, the employer may impose different eligibility provisions, different benefit restrictions, or different costs, provided the distinction is consistent with the employer’s usual business practice.
What is the key employee concentration test?
The cafeteria plan nondiscrimination rules also include a “Key Employee Concentration Test,” which provides that Key Employees cannot receive more than 25% of the total benefits under the plan.
Can you charge less for highly compensated employees?
4- Difference in Cost to Employees. If employees can pay pre-tax through a cafeteria plan, it generally is NOT OK to charge less for Highly Compensated Employees, but there are some “safe harbors” under cafeteria plan nondiscrimination rules.
Can HCEs enroll in cafeteria plan?
If the cafeteria plan provides that HCEs are not eligible to enroll in the cafeteria plan (for example, because the employer pays for 100% of their benefits anyway), then there will not a problem passing the cafeteria plan nondiscrimination tests.
Does the Affordable Care Act prohibit discrimination?
These have been in effect since before the Affordable Care Act (ACA) & continue to apply. These prohibit discrimination as to Eligibility and as to Contributions & Benefits. 2- Insured plans. An employer CAN offer better benefits (or lower cost) to highly compensated employees, if there is no cafeteria plan.
Does a TPA have to have compensation information?
To run the nondiscrimination tests, the TPA must have compensation information from the employer, because the tests compare eligibility and contributions/benefits amounts for certain categories of highly-compensated employees versus other employees. If the employer doesn’t provide this data, the TPA cannot run the tests.