Can Employee Benefits be Taken Away?
Answering the question of can employee benefits can be taken away can be complicated, mainly because while they can be taken away, an employer must take steps before doing so. In addition, a few laws and regulations regulate how an employer can remove benefits. To learn more, keep reading.
Benefits Protected by Law
Before understanding what benefits are and aren’t protected by law, it’s important to note that benefits are not just perks to attract and retain talent, but they are a form of contractual compensation. Therefore, employers cannot take away benefits without providing some sort of warning to employees.
Benefits protected by law include social security, unemployment insurance, family medical leave, and workers’ compensation insurance. For example, if an employee is injured on the job, the employer must legally cover the workers’ compensation.
Additionally, employers are responsible for withholding state and federal income tax on paychecks and paying a matching amount to social security and medicare tax to avoid being held liable by the IRS.
If you are an employer who removes any of the above benefits, you are liable to legal action.
Benefits Not Protected by Law
While the above benefits are protected by law, many are not. For example, as an employer, you are not legally obligated to provide employees with paid vacation time, retirement savings accounts, life insurance policies, and other perks such as remote work, summer Fridays, flexible work hours, or a pet-friendly workplace, among others. While these benefits are increasingly important to employees and are powerful at attracting candidates, they are by no means a requirement of an organization and can be eliminated without legal repercussions.
Advantages of Providing Employee Benefits
Benefits have always been significant to employees but have risen recently with the shift to remote work and the Great Resignation. In fact, Aflac reported that 49% of employees would look for a new job within one year if the benefits weren’t satisfactory. Employees not only view the benefits as perks to enjoy but also as a way for the business to show they are investing in their employees. As a result, employers will likely see significant returns on retention, productivity, and morale when offering satisfactory benefits.
In addition to how the benefits make employees feel, it’s important to note that tax advantages are associated with many employee benefits. Some of the tax-free benefits include:
- Healthcare reimbursement
- Life insurance
- Tuition reimbursement
- Child care reimbursement
- Cafeteria plans
- Employee discounts
- Personal use of company vehicles
- Company provided cellphones
- Workplace meals
Most Desired Workplace Benefits
If you need to decide what benefits to offer, knowing what benefits matter to your team is essential. Asking what matters and what they want to see is a great way to show your team you are listening to them and investing in them. However, some universally desired benefits include healthcare, remote work, flexible work hours, PTO, disability insurance, parental leave, career development, and wellness programs.
Removing Employee Benefits
Sometimes being able to offer benefits isn’t possible. It can be challenging if you need to remove employee benefits, especially for employees that have become accustomed to them. It is also essential to determine if eliminating the benefits is necessary since the removal can severely impact the company culture. However, there are ways to offer employee benefits on a budget. For example, you can look into health reimbursement arrangements (HRAs) or group plans if healthcare is too expensive.
At Canal HR, we offer group health insurance plans to provide employees with health insurance coverage through their employer, who pays a portion of the premium. As a result, the plan’s cost is generally lower than individual health insurance policies. Visit our website to learn more about group health insurance plans for small businesses.
Canal HR Employee Benefits Management
In addition to major healthcare, we are proud to offer life insurance, dental, short and long-term disability, and cancer insurance. Keep reading to learn how they can benefit you and your team.
Life insurance is a contractural policy between the policyholder and an insurance company. Policyholders will pay premium rates in exchange for the insurance company paying a lump sum called a death benefit to the beneficiaries upon the insured’s passing. Life insurance’s benefits include easy administration, a tax break for employees, convenience, and a low cost.
Employee dental insurance plans cover dental healthcare expenses that major medical insurance alone may not cover. Small businesses do not have to offer dental insurance to full-time employees under the Affordable Care Act. However, there are benefits to providing this insurance to your employees. Those benefits include it will help your company stand out in the job market, helping retain high-quality employees, and highlighting support for employee wellness from leadership.
Short and Long-Term Disability
Short-term disability insurance covers a percentage of an employee’s typical paycheck temporarily, typically between 9 and 52 weeks, with 26 weeks being the average. Long-term disability, however, is usually between two and ten years.
Offering this type of insurance can help hire and retain high-quality workers. However, if you are wondering if you can afford short and long-term disability insurance, consider offering them as voluntary benefits. Additionally, if you work with a PEO like Canal HR, you can save on benefits by allowing us to negotiate lower group rates on your behalf.
One out of every two men and one out of every three women in the U.S. will be diagnosed with cancer in their lifetime. Canal HR is here to ensure your employees can care for their health needs in trying times. Our cancer plan covers many expenses not covered by traditional health insurance and other cancer plans. Visit our website to learn more about our cancer insurance coverage.
Let Canal HR Handle Your Employee Benefits
While the answer to can employee benefits be taken away is yes, in some capacity, it is best to keep benefits for employees to retain them and attract high-quality employees for future openings. At canal HR, we have decades of experience providing benefits services to employees across the southeastern US. Contact us today to talk to one of our PEO experts about getting employee benefits for your business.