Entrepreneur Plus - Short White
For Subscribers

Do I Need to Give Benefits to My Hourly Workers? From a legal perspective, there's a lot to consider.

By Desmond Lim Edited by Frances Dodds

Opinions expressed by Entrepreneur contributors are their own.

tumsasedgars | Getty Images

In an ideal world and economy, every employer would be able to provide benefits such as health insurance, retirement plan matching, and travel reimbursements to all employees. However, it's often not financially feasible for many small businesses.

According to the Bureau of Labor Statistics, benefits made up about a third of the cost of an employee. Meaning, an employee salaried at $50,000 would actually cost the employer another 30 percent more, for a total of $65,000. For small businesses with thin margins, like local grocery stores, this sort of expenditure per hourly employee can be next to impossible.

The ethics of not providing benefits is a topic that has been debated at length elsewhere (although it's clear that benefits can help lower turnover, which could offset the additional costs), but the legalities of not providing benefits are plain and simple: Your business could be heavily fined and even shut down for not providing federally mandated benefits.

The rest of this article is locked.

Join Entrepreneur+ today for access.

Subscribe Now

Already have an account? Sign In