Benefits Laws and Regulations Guide

Employee benefits is a term referring to the compensation payments made to workers as a supplement to their salaries or wages. These could be given in whole or in part by their employers. There are employee benefits laws that guide employers on how benefits should be issued, and tax remittances done. These are constantly changing and will vary from one state to another. Keeping up with HR laws and regulations requires a human resource professional. There are some basic employee compensation and benefits regulations that employers need to abide by. The first of these is ensuring that all workers’ compensation requirements are met. Next is the compliance with all required taxes at both the state and federal levels. The rest are dependent on specific laws and regulations.

Employee Benefits

Compensation and benefits laws cover a range of areas including: -
  • Health Insurance
  • Disability Insurance
  • Life Insurance
  • Sick Leave
  • Tuition Reimbursement
  • Paid Vacation
  • Relocation Expenses
  • Child Care Benefits
  • Pensions
  • Housing
  • Profit-Sharing and more
Not all of these benefits are compulsory for an organization, though they illustrate the scope of employment benefits and offer insight on the laws that may need a reference.

Employee Benefits and Taxes

 Understanding the differences between these benefits is essential as they may be handled in different ways based on local or federal tax requirements.  Employers are responsible for withholding FICA taxes from the paychecks of their employees, as well as paying their required portion of the same tax. This way they ensure that there are benefits available for both retirement and disability. Another legal tax responsibility is for employers to pay all state and federal unemployment taxes. The revenue from these taxes is used to provide benefits for unemployed workers.

Employment Benefits Laws

There are a range of benefits that are included as part of gross wages, whereas others are not. Furthermore, this affects the laws when employers provide benefits for their employees. The first laws worth noting are as follows: -
  1. The Employee Retirement Income Security Act (ERISA) – This guides the financial incentive arrangements that employers may choose for a select group of employees.
  2. The Internal Revenue Code (IRC) – This guides employee rights if the employer selects a specific plan, especially on how administering the plan should be done.
  3. The Consolidated Omnibus Budget Reconciliation Act (COBRA) – This ensures that insurance companies continue to offer terminated employees with coverage for a set period to enable premiums to be renewed or reduced.
  4. The Health Insurance Portability and Accountability Act (HIPAA) – This law ensures the personal privacy protection of workers who may have pre-existing medical conditions to ensure they can get health coverage.
  5. The Affordable Care Act (ACA) is one of the employee benefits required by law for employers with more than 50 FTE employees.
The main reason that companies of all sizes need to be clear about employee benefits laws and regulations is to avoid steep penalties for being non-compliant.