5 Required Employee Benefits for Your Georgia Business
For small business owners, navigating legal compliance for new hires can seem like a blessing and a curse. On one hand, going through the complicated hiring process means your business is thriving and growing – on the other, it means understanding the legalities and costs associated with providing coverage.
Figuring out what’s required by law and what is optional for employers to provide to employees is just one of the many steps in the new hire process.
When you put together a benefits package for your employees, it’s important that you understand which benefits are required and which are optional. We’ve outlined five required employee benefits to help make the process a little easier:
1. COBRA Benefits
Also known as the Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA Benefits are required for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year.
COBRA allows the employee to keep their coverage at the group rate for up to 18 months.
For more information, check out this detailed overview of the major provisions of COBRA (PDF).
2. Family and Medical Leave
This one can be pretty confusing for some. The Family and Medical Leave Act (FMLA) requires employers to provide 12 weeks of unpaid time off to employees in a 12 month period. FMLA is meant to protect employees from losing their job to care for themselves or immediate family members – including the birth of a child.
Unless you choose to offer paid leave as an optional benefit, FMLA is unpaid. Keep in mind that FMLA applies only to “covered” employers which in the private sector it is if it employs 50 or more employees in 20 or more workweeks in the current or previous calendar year.
From the U.S. Department of Labor: The Employer’s Guide to The Family and Medical Leave Act.
3. Social Security Taxes
You have to pay social security taxes on all employees. The current Social Security tax rate is 6.2%, which is paid by both you and your employee(s). Employers and employees are also required to pay Medicare tax, which is at a current rate of 1.45%.
To learn more, visit the Social Security site.
4. Unemployment Insurance
Unemployment insurance is different in every state and mandated at the state level, so the first step any business owner should take is registering their business with their state’s workforce agency and go from there.
Unemployment insurance compensates employees who lose their job through no fault of their own. In the state of Georgia, certain factors can make you liable to pay unemployment tax:
- With at least one worker in 20 different weeks during a calendar year or with a quarterly pay of at least $1,500.
- Agricultural employers with 10 or more workers on any day during 20 different weeks in a calendar year or with at least $20,000 in gross pay for a calendar quarter. (Exclude food and lodging for agricultural employees).
- Domestic employers with a payroll of at least $1,000 in any quarter. This includes employees of a college club, fraternity, or sorority with food and lodging excluded from their wages.
Determine your state tax obligations with this handy guide from the U.S. Small Business Administration.
5. Workers’ Compensation
Just like unemployment insurance, workers’ compensation is state-mandated and differs from state to state. In the state of Georgia, if you regularly employ three or more persons, you are required to provide workers’ compensation insurance.
Visit this page to see a list of workers’ compensation officials divided by state.
Knowing the difference between what is required by law and what benefits simply enhance your compensation package is incredibly useful in the new hire process. Not only does it help with employee recruitment, but it can also improve your retention as well.