Choosing Benefits for Your Employees
How to figure out the best employee benefits for your budget
Q:What kinds of benefits should I offer my employees? My business is growing, but I'm not sure how much I can afford to offer them.
A: A lot of business experts and entrepreneurs ascribe to the idea that your employees should be who you look out for first, followed by your customers. It's not just Pollyanna-type thinking. If your employees are happy, they're going to look out for your customers. If they're not happy to work for you, then you're steering a ship with sailors who really couldn't care less if the business runs aground.
So the answer is: Offer as many benefits as you can without seriously hurting the health of your business.
The types of benefits you have to offer, according to the law, probably won't be a surprise, but nevertheless, here they are: You need to allow your employees time off to vote, serve on a jury and perform military service. You must comply with all workers' compensation requirements, withhold FICA taxes and pay your own portion of FICA taxes, giving employees retirement and disability benefits. You have to pay state and federal unemployment taxes so your unemployed workers can receive benefits. If your state requires it, you also have to contribute to state short-term disability programs, and if you have 50 or more employees, you must comply with the Federal Family and Medical Leave Act.
You don't have to offer a 401(k) plan or a life insurance plan. Unless you're in Hawaii, you don't have to offer a health plan, either. You don't even need to give employees paid vacation, holidays or sick leave. Most employers, however, provide (at minimum) paid holidays for New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. And if you don't offer some type of benefit to your employees, even you will have to wonder: Who will want to work for me, and do I really want that type of person working for me?
Geoff Williams has written for numerous publications, including Entrepreneur, Consumer Reports, LIFE and Entertainment Weekly. He also is the author of Living Well with Bad Credit.