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What Benefits Are You Required to Provide?

Some benefits are legally required; some aren't. We'll help you figure which is which.

The law requires employers to provide employees with certain benefits. You must:

  • Give employees time off to vote, serve on a jury and perform military service.
  • Comply with all workers' compensationrequirements.
  • Withhold FICA taxes from employees' paychecks and pay your own portion of FICA taxes, providing employees with retirement and disability benefits.
  • Pay state and federal unemployment taxes, thus providing benefits for unemployed workers.
  • Contribute to state short-term disability programs in states where such programs exist.
  • Comply with the Family and Medical Leave Act

You are not required to provide:

  • Retirement plans
  • Health plans(except in Hawaii)
  • Life insurance plans
  • Paid vacations, holidays or sick leave

In reality, however, most companies do not offer those benefits to stay competitive.

Most employers provide paid holidays for Christmas Day, New Year's Day, Memorial Day, Independence Day, Labor Day and Thanksgiving Day. Many employers either allow their employees to take time off without pay or let them use vacation days for religious holidays.

Most full-time employees will expect one to two weeks' paid vacation time per year. In explaining your vacation policy to employees, specify how far in advance requests for vacation time should be made, and whether in writing or verbally.

There are no laws that require employers to provide funeral leave, but most do allow two to four days' leave for deaths of close family members. Companies that don't do this generally allow employees to use some other form of paid leave, such as sick days or vacation.

Excerpted from Start Your Own Business.

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