CA employee benefits can be said to fall under two broad categories. Everything that is mandated under state or federal law is part of one set, while voluntary benefits offered by employers seeking to attract employees and hold on to them come under the other category. In both cases, there are plenty of rules and regulations that must be followed, and the most common ones are explained below.
Apart from social security taxes, employers in California are expected to pay for disability and unemployment insurance. In order to shield themselves from liabilities related to injuries to employees, they must also get workers’ compensation coverage. The state’s SDI Plan covers most employees as a form of disability insurance.
California does not mandate paid sick leave, but it is an enforced benefit that employers must offer under the federal Family and Medical Leave Act (FMLA). As per this law, employees may avail of 12 weeks per year of paid leave. This can be for maternity or for serious health conditions faced by the employee or someone in the family such as a spouse, child or parent.
Neither the state civil code nor federal laws force employers to offer vacations or holidays. The only exception that may be allowed is a request for time off on a religious holiday, since refusing this could well mean a discrimination lawsuit. Another purely voluntary benefit is employer-paid group health insurance and add-ons such as dental and vision plans.
If an employer does offer a health plan, it must be compliant with federal as well as state regulations. With group insurance, the main rule that needs to be followed is to not create protected class considerations. In simple terms, this means that different plans may be offered to each group within a company. But all employees within a group (production staff, managers, etc.) must be provided the same plan options.
An employer may also set certain eligibility criteria for employees to qualify for group health care. For instance, many companies do not provide health insurance to part-time workers who are not required to put in more than a predefined number of hours per week. However, once an employee is covered, the plan options and coverage status cannot be changed without providing a 15-day notice period. Also, the health insurance must be kept active for employees who are on sick leave.
Retirement benefits follow a somewhat similar format where employers are not mandated by law to offer a plan but must follow the regulations if they do. State laws leave it up to the employer and employee to figure out how to fund a retirement benefit account. Employers do not have to provide matching contributions. Every employee has to be able to enroll, and the fund manager must fulfill compliance and reporting needs as specified under federal law.
New laws are passed in Sacramento and Washington every year, so it’s advisable to keep track of the changes. A good example is the California Health Benefit Exchange, which was set up in response to the federal Affordable Care Act. CHBE now allows small businesses to compare and purchase previously unaffordable health insurance for employees at low rates. All said and done, CA employee benefits are among the most comprehensive in the nation and something that most other states are unable to offer.
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