Highlights
- Employee benefits can give your small business a competitive edge, helping you attract qualified talent.
- By understanding the unique needs of your workforce, you can create a comprehensive benefits offering that will help you retain your best employees.
- At Quality Business Solutions, we help you create and implement a strong (yet affordable) benefits program for your small business. Contact us to learn more!
Attractive employee benefits can change the game for small businesses looking to attract top-performing talent to their growing teams. Too often, budget constraints and legal requirements make it challenging for companies to improve their benefits offering.
This guide provides a list of small business employee benefits that can give you a competitive edge — and provides actionable steps to get started.
Let’s dive right in!
A Short Intro to Employee Benefits
Employee benefits are a crucial aspect of a compensation package. They are designed to supplement an employee’s regular income and enhance their overall well-being.
Here’s why your small business needs to offer a comprehensive employee benefits package:
- Attracting and retaining talent. Providing attractive benefits can help your business stand out and attract top talent, as well as retain your existing skilled workforce.
- Improving employee satisfaction and productivity. Benefits that support employees’ physical, mental, and financial well-being increase job satisfaction and productivity while reducing absenteeism.
- Compliance with legal requirements. By offering mandatory benefits, small businesses ensure compliance with applicable laws and regulations, avoiding potential penalties and legal issues.
- Tax advantages. Certain employee benefits, such as health insurance premiums and retirement plan contributions, can be tax-deductible for the employer, providing financial incentives for offering these benefits.
6 Required Small Business Employee Benefits
As a small business owner, you are legally required to provide certain employee benefits to ensure compliance with federal and state regulations.
These are the key mandatory employee benefits for small businesses:
Workers’ Compensation Insurance
Workers’ compensation insurance is a crucial safety net for employees in the event of job-related injuries or illnesses. It covers medical expenses, lost wages, and rehabilitation costs, protecting both the employee and the employer from financial burdens.
Unemployment Insurance
Unemployment insurance is a joint federal-state program that provides temporary financial assistance to eligible workers who have lost their jobs through no fault of their own. As an employer, you are required to pay unemployment taxes to fund this program.
Disability Insurance
Depending on your state’s laws, you may be required to provide disability insurance to your employees. This type of insurance provides partial wage replacement to employees who become unable to work due to a non-work-related injury or illness.
Health Insurance
The Affordable Care Act (ACA) mandates that businesses with 50 or more full-time equivalent employees offer affordable health insurance to their employees or face penalties. Even if you have fewer than 50 employees, providing health insurance can be a valuable benefit that attracts and retains top talent.
COBRA Benefits
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees and their families to temporarily maintain their health insurance coverage after certain events, such as job termination or reduction in work hours.
Employers with 20 or more employees are required to allow those employees who qualify to continue to participate in the employer’s plan. However, the employees typically pay 100% of the premium costs.
Family and Medical Leave
The Family and Medical Leave Act (FMLA) entitles eligible employees to take unpaid, job-protected leave for specified family and medical reasons, such as the birth or adoption of a child, caring for a family member with a serious health condition, or managing their own serious health condition. Employers with 50 or more employees must comply with the FMLA, ensuring that employees can take necessary time off without fear of losing their jobs.
9 Voluntary Small Business Employee Benefits
Voluntary employee benefits are non-mandatory perks that employers can offer to attract and retain top talent. They can help small businesses stand out from competitors and create a better workplace environment.
Here are some common voluntary benefits to consider for your small business:
Health Insurance (Dental and Vision)
In addition to medical insurance, you can offer dental and vision coverage to your employees. These benefits can help employees save money on routine check-ups, procedures, and vision correction.
Retirement Plans
Offering a retirement plan, such as a 401(k) or a Simplified Employee Pension (SEP) plan, can help employees save for their future while providing tax advantages for both employees and employers.
Paid Time Off (PTO)
Paid time off, including vacation days, sick leave, and personal days, can help employees maintain a healthy work-life balance and reduce burnout.
Flexible Spending Accounts (FSAs)
FSAs allow you to set aside pre-tax dollars for eligible medical and dependent care expenses, reducing your overall tax burden.
Health Savings Accounts (HSAs)
HSAs are tax-advantaged savings accounts that can be used to pay for qualified medical expenses. They are often paired with high-deductible health plans and offer tax benefits for both employers and employees.
Employee Assistance Programs (EAPs)
EAPs provide employees with confidential counseling, resources, and support for personal or work-related issues, such as stress management, substance abuse, or legal and financial concerns.
Life Insurance
Offering group life insurance can provide financial security for employees’ families in the unfortunate event of their death.
Flexible Work Hours/Remote Work
Allowing employees to work flexible hours or remotely can improve work-life balance, reduce commuting costs, and increase productivity.
Wellness Programs
Wellness programs, such as gym membership discounts, on-site fitness classes, or health coaching, can promote healthy lifestyles among employees and potentially reduce healthcare costs for the employer.
Getting Started: Attracting and Retaining Talent with Employee Benefits
A well-designed benefits package can set small businesses apart from their competitors. It can also boost employee satisfaction and retention, making your company a desirable place to work.
However, employee benefits are not a one-size-fits-all solution: you must tailor your offerings to meet your workforce’s unique needs and preferences.
Need help getting started? If you’re feeling overwhelmed by the process of implementing or managing employee benefits, partnering with a Professional Employer Organization (PEO) can provide valuable guidance throughout the journey.
At Quality Business Solutions, we provide comprehensive benefits administration services, designed to help you create and implement a competitive benefits package for your small business.
Ready to attract and retain talent with affordable benefits? Contact us today to learn more about our PEO services.
