Comprehensive Guide to Legally Required Employee Benefits

Employee benefits are an integral part of the employer-employee relationship, providing compensation beyond salaries. Employee benefits contribute to the overall well-being of employees. We’ll classify benefits into three categories in this post: legally required, standard, and non-standard but desirable.

Definition and categorization of employee benefits

  • Legally required benefits: Mandated by laws and regulations.
  • Standard benefits: Commonly provided by employers for competitive reasons.
  • Non-standard but desirable benefits: Additional perks that enhance job satisfaction.

Legally required benefits for all employers

Ensuring compliance with legally required benefits is essential for employers. Failure to do so can result in legal consequences. Here are some key legally mandated benefits applicable to all employers:

Social Security and Medicare

Employers and employees share responsibilities for contributing to Social Security and Medicare. These programs provide financial support to retirees and individuals with disabilities.

Unemployment insurance

Funded by the Unemployment Tax Fund, unemployment insurance assists workers who lose their jobs. Employers contribute to this fund.

Worker’s compensation

Worker’s compensation is insurance that covers medical expenses and lost wages for employees who suffer work-related injuries or illnesses. Employers are obligated to provide this coverage to protect their workforce.

State-specific required benefits

In addition to federal requirements, certain states impose specific mandates on employers. These vary, but common examples include:

Disability insurance

Mandatory in states such as California, Hawaii, Rhode Island, New Jersey, New York (and Puerto Rico), disability insurance provides income protection to employees unable to work due to non-work-related illnesses or injuries.

Workers’ compensation

Many states have unique and specific requirements for workers’ compensation, including coverage limits and reporting procedures. Read about each states requirements here.

Paid Time Off (PTO)

California law mandates paid time off for various purposes, emphasizing the importance of work-life balance and employee well-being.

Additional requirements for employers with 50+ Full-Time Equivalent Employees (FTEs)

Larger employers face additional obligations to support the well-being of their workforce. Key requirements include:

Family medical leave benefits

Employers with 50 or more FTEs must provide eligible employees with job-protected leave for qualifying family or medical reasons under the Family and Medical Leave Act (FMLA).

Health insurance

Mandatory provision of health insurance for employees becomes crucial for larger employers, ensuring access to healthcare services.


Understanding and complying with the diverse landscape of required employee benefits is crucial for employers of all sizes and across various locations. Failure to adhere to these regulations can result in legal consequences and impact the well-being of the workforce. By prioritizing compliance and recognizing the importance of employee benefits, employers can foster a positive work environment and attract and retain top talent. In summary, a comprehensive approach to employee benefits is a fundamental aspect of responsible and effective workforce management.

Get in touch

Give us a ring, send an email, or fill out the form below. We endeavor to answer all inquiries within 24 hours on business days.