HR Basics: Benefits

Most people when they think of benefits what comes to mind is health care insurance. While this is a big one, it is not the only one. Benefits like employees come in all shapes and sizes. Depending on the size of your business, the competition you face for employees, and the product/service you provide – you may only have to offer a few or you may have to offer many.

One thing that surprises  most people is that at the Federal level, benefits are NOT a requirement – that’s right they are optional. However, and it’s a big HOWEVER there are laws on what needs to be done if you DO offer benefits.  Since states can vary widely on the treatment of benefits, we will only be referring to the Federal level for this article.  Questions about your particular state can searched on your states Department of Labor website.

Let start with some of the more obvious benefits and those that come to mind first:

• Health/Dental/Vision Insurance
• Vacation/Sick/Personal Days/PTO

Let’s review these one at a time:

Health/Dental/Vision Insurance

The most common of the benefits and in 2014 most companies will have to offer Health Insurance. We won’t go into detail on this as with each day we are learning more about the Acts requirements.  It is currently not required to have health insurance – however if you do provide it, you are subject to several laws. For the overall managing of the plans you are subject to ERISA (Employee Retirement Income Security Act) and HIPPA (Health Insurance Privacy & Portability Act) guidelines. If you have more than 20 employees, you will be required to offer COBRA (Consolidated Omnibus Budget Reconciliation Act) to all employees who leave you employ regardless of the reason. Don’t be intimidated by all the acronyms, your carrier and/or broker can help make sure you are complaint with all these laws.

Vacation/Sick/Personal Days/PTO

This is one of the easiest benefits to give, one of the easiest to be abused, and one of the most competitive to provide. It is the easiest to give since you only need to determine how many days you want to give employees (usually based on length of employment) and give them or better yet – have employees accrue them on each paycheck. Sick days in particular are the easiest to abuse since we are all aware of the “uh uh I’m not feeling good day” call usually on a sunny Friday morning. Which is why personally I like PTO days – doesn’t matter why you are not at work – you are not here – no faking, no lying, no treating employees like children.  You may not be able to offer lots of benefits but by being generous, even if its a little more than your competitor – you will win over people.  People value their time away from work.

There are other benefits you can offer:

401(k) or other retirement plan

Retirement plans are heavily regulated so before you take this step do your research! Plan participants are going after plans who charge high fees. Review various plans and options before you make a decision. Also consider if you will do a match, profit sharing or safe habor.

Special days off

Offer employees their birthday off or their anniversary date with the company or any other fun date. Like above – people value their time off.

Comp time

This would be mostly for salaried employees as a way to show your appreciation for the extra effort and time they contribute to the company. If you want to do this for hourly employees, it has to be done in the same week they work – unless you are a state that pays Over-Time based on 8 hours a day.

Life/Short-Term Disability/Long-Term Disability

These are benefits that you may want to offer and at the same time you hope your employees never take advantage of. You can purchase the coverage for the group  and reasonable rates. For instance the life insurance policy would be for a flat amount per employee. STD and LTD would be dependent on an employees earnings – of the two long-term is usually more cost effective.

Bonus Plans

Bonus plans are very individualized based on your business, budget goals, performance goals, etc. This will take a little more effort as you want to be sure you are rewarding the correct behavior. Or if you have a good year you may decide to distribute an equal amount to everyone to thank them for their efforts. You decide, you plan and then you  implement.

Etc.

Listed here are some of the average/typical benefits one thinks of – but they are not the only ones.  Here are some unusual benefits you may want to consider:

• Game Room
• Nap-time
• Concierge
• Discount movie tickets
• Bagel/donut breakfasts, Ice Cream Fridays, Anything with food

Need help in putting your benefits in action or determining what you should offer.  Contact us today at [email protected]