{"id":4748,"date":"2016-04-04T10:47:41","date_gmt":"2016-04-04T15:47:41","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/employment-law-and-human-resources\/pro-and-cons-offering-employee-benefits.html"},"modified":"2024-06-06T05:25:00","modified_gmt":"2024-06-06T10:25:00","slug":"pro-and-cons-offering-employee-benefits","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/employment-law-and-human-resources\/pro-and-cons-offering-employee-benefits.html","title":{"rendered":"Pros and Cons: Offering Employee Benefits"},"content":{"rendered":"\n
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Pros and Cons: Offering Employee Benefits<\/h1>\n
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\n By Susan Buckner, J.D.<\/a> | Legally reviewed by Susan Mills Richmond, Esq.<\/a>\n | Last updated\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

Today, small businesses need every edge they can find when hiring new employees. This means weighing the pros and cons of offering employee benefits. In a perfect world, all employers would shower top talent with perks and benefits. In reality, payroll is the most expensive line item on your accounting sheet already. Are employee benefits packages worth it for a small company?<\/p>\r\n

Only small-business owners can answer those questions. A benefit must return more to the company than it costs. Federal law requires some benefits, like workers’ compensation and unemployment insurance. Other benefits, such as health insurance<\/a> coverage, pension plans<\/a>, and paid vacations<\/a>, are optional under federal law. Some state laws require small businesses to offer benefits.<\/p>\r\n

When deciding which employee benefits programs are best for your business, it’s a good idea to consider the pros and cons of each alternative. Consider negotiating some benefits with employees when you hire them. This article discusses the different options available to small businesses.<\/p>\r\n

See FindLaw’s Wages and Benefits<\/a> section for additional articles and resources.<\/b><\/p>\r\n

Federal Benefits: What You Must Provide<\/h2>\r\n

You may consider yourself a "small business" exempt from laws requiring employee benefits, but it may surprise you to learn what the federal government considers a "small business." Although the Small Business Administration (SBA) considers any business with fewer than 500 employees small, federal laws apply to businesses with as few as 50 workers.<\/p>\r\n

All employers must provide these benefits for their employees:<\/p>\r\n\r\n

Name of Benefit<\/p>\r\n<\/th>\r\n

Type of Benefit<\/p>\r\n<\/th>\r\n

Employees Required<\/p>\r\n<\/th>\r\n<\/tr>

Social Security<\/p>\r\n<\/td>\r\n

Retirement<\/p>\r\n<\/td>\r\n

Any<\/p>\r\n<\/td>\r\n<\/tr>

Medicare<\/p>\r\n<\/td>\r\n

Retirement health insurance<\/p>\r\n<\/td>\r\n

Any<\/p>\r\n<\/td>\r\n<\/tr>

<\/a>

Worker’s Compensation<\/a><\/p>\r\n<\/td>\r\n

Job-related injuries<\/p>\r\n<\/td>\r\n

One or more<\/p>\r\n<\/td>\r\n<\/tr>

Unemployment insurance<\/p>\r\n<\/td>\r\n

Involuntary unemployment<\/p>\r\n<\/td>\r\n

One or more<\/p>\r\n<\/td>\r\n<\/tr>

<\/a>

Family and Medical Leave Act<\/a><\/p>\r\n<\/td>\r\n

Unpaid medical leave<\/p>\r\n<\/td>\r\n

50 or more. Applies to all full-time employees<\/p>\r\n<\/td>\r\n<\/tr>

Affordable Care Act<\/a> (Obamacare)<\/p>\r\n<\/td>\r\n

Provide health care coverage<\/p>\r\n<\/td>\r\n

Generally 50 or more. Applies to all full-time employees<\/p>\r\n<\/td>\r\n<\/tr>

 <\/td>\r\n <\/td>\r\n <\/td>\r\n<\/tr><\/tbody><\/table>\r\n

If you are a qualified employer, you must provide benefits to all full-time employees. Employers may offer FMLA benefits to part-time workers if they choose.<\/p>\r\n

Offering Employee Benefits: The Pros<\/h2>\r\n

Small business employee benefits are a balancing act. They help you attract and retain top workers. However, they cost money that a smaller company may not have. You must compare how much the benefit will cost versus how much the employee will bring in. Sometimes, employees want things that are not cost-effective. Some benefits may cost nothing but give employees a tremendous morale boost.<\/p>\r\n