Plan to offer employee benefits

Healthcare and other benefits play a significant role in hiring and retaining employees. Some employee benefits are required by law, but others are optional.

Required employee benefits

Optional employee benefits

Your small businesses can offer a complete range of optional benefits to help attract and retain employees. Even if a benefit you offer is optional, it might still have to comply with certain laws if you choose to offer it.

Businesses that offer group health plans must comply with federal laws. You can read more about those laws in the Department of Labor’s advisory guide.

Employees can expand coverage through the Affordable Care Act and some may qualify for benefits via the Consolidated Omnibus Budget Reconciliation Act (COBRA). Businesses must extend the option of COBRA benefits to employees who are terminated or laid off. For more information and resources to help small businesses make decisions about health insurance coverage, visit HealthCare.gov.

Retirement plans are a very popular employee benefit. Consider offering an employer-sponsored plan like a 401k or a pension plan. The federal government offers a wide range of resources to aid small business owners in choosing their retirement plan and pension.

Employee incentive programs

Employee incentive programs can boost morale and create more draw for open positions. Common incentives include stock options, flex time, wellness programs, corporate memberships, and company events.

If your budget allows, you may want to consider investing in benefits administration software to make your accounting process easier and more efficient. Detailing these benefits in the employee handbook helps your staff make decisions, and they can use it as a reference for workplace requirements.

Follow federal and state labor laws

Protect workers’ rights and your business by adhering to labor laws, which means you must ensure that business practices align with industry regulations.

This includes learning applicable laws for hiring veteransforeign workershousehold employeeschild labor and people with disabilities, among others groups. You must also comply when terminating an employee, laying off workers, or downsizing the company.

Consult the Department of Labor’s federal and state law resources.

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Last updated July 3, 2023