Ancillary Benefits (Voluntary for employer or employee) Benefit Plan Tax Filings and Reporting Benefits Funding- Taxable / Non-taxable Benefits Laws and Regulations Benefits Service Providers (Brokers, Carriers, Record-keepers) Medical/Healthcare Insurance Retirement Plans - Defined Contribution / Defined Benefit Statutory Benefits Union Benefits - Labor Relations
Ancillary Benefits (Voluntary for employer or employee) Benefit Plan Tax Filings and Reporting Benefits Funding- Taxable / Non-taxable Benefits Laws and Regulations Benefits Service Providers (Brokers, Carriers, Record-keepers) Medical/Healthcare Insurance Retirement Plans - Defined Contribution / Defined Benefit Statutory Benefits Union Benefits - Labor Relations

Statutory Benefits

Employers and employees typically focus on gross pay as a critical portion of compensation. Total compensation includes much more than gross salary, with mandatory, statutory, and non-statutory benefits under consideration as well. These packages give employees significant reassurance when working with an employer. However, it is essential for employees to be clear about entitlement to certain benefits, and which employers offer also. There are two key types of benefits, statutory or mandatory benefits, and non-statutory benefits.

Understanding Statutory Benefits

 Statutory benefits are offered by employers to employees. Within this category of benefits, there are mandatory benefits that are legally required by law. In essence, statutory benefits and mandatory benefits are the same. These benefits include the following: –

  1. Social Security – A benefit paid through a deduction from employee earnings, matched by the employer.
  2. Medicare – A benefit that is similar to social security through deductions from employees and matching contributions from employers.
  3. Unemployment Insurance – This is so that the worker is assisted in the event they lose their jobs.
  4. Medical Insurance – Makes sure that their jobs are protected if it is not possible to work due to medical reasons.
  5. Work Injury Insurance – Ensures that the worker still has income if they get an injury while in the workplace,
  6. Overtime Compensation – This is for employees who are paid on an hourly basis. It caters to their wages if they work more than 40 hours in a week.

Benefits offered also depend on whether the organization is government-owned or private. Having a wide range of benefits means that some complexity may be outside of the purview of the HR team. In this case, it is wise for companies to choose to outsource the administration of statutory benefits

The Difference between Non-Statutory Benefits

These are benefits that are offered by the employer, but they are not required by law. The full discretion of the employer determines these benefits. Examples of statutory benefits include: –

  1. Dental Insurance may offer cover for both the employee as well as their family members. This is generally given as a reimbursement once the dental expense has been incurred.
  2. Health Insurance that may be offered by the employer at a reduced group price.
  3. Group Disability Insurance may be available both short and long term. This allows supplement income for up to 180 days in the event of an injury incurred in the workplace.
  4. Paid Leave is available to employees who are given a certain number of leave days each year. They are paid for this period and able to return and continue working once they conclude the leave period.

HR workers need to ensure that they are clear about changing rules from one state to another, mainly when serving a company that may have various branches. Furthermore, the base rates of these benefits may be adjusted on an annual basis. If an organization makes errors while planning and making payments on statutory benefits, they may face steep government penalties.

Related Articles

article

What are Health Savings Accounts?

Healthcare costs in the United States are increasing every year. In 2016 for instance; these costs had gone up to ...

Read more
article

What is the Affordable Care Act (ACA) for Employers?

There is a major milestone that the Obama administration achieved, and that was the reforms made to the Affordable Care ...

Read more
article

Understanding Paid Holidays and Why Employers Want to Provide Them

With the holiday season upon us, as a business owner, you are either planning to close or stay open, depending ...

Read more
article

6 Best Healthcare Software Companies 2023

The advancing technology has brought about positive changes in the healthcare industry. It’s now easier for patients to access cutting-edge ...

Read more
article

List of Statutory Benefits for Employees

Employee benefits are basically types of compensation offered to employees by their employers in addition to their normal wages or ...

Read more