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.
Employers in California must regularly pay everything from social security taxes to insurance premiums for unemployment and disability. The state also forces employers to buy into workers' compensation insurance, which pays for work-related injuries and shields the employer from personal injury lawsuits being filed by employees. Most employees in the Golden State are covered under the State Disability Insurance (SDI) Plan.
State laws do not require an employer to provide sick leave, but federal laws do mandate that employees should be able to take up to 12 weeks off each year for health related issues. This includes maternity leave as well as other health issues that need time off. Apart from the employee's own health, the Family and Medical Leave Act (FMLA) specifies that this leave may also be used to provide care for someone in the family (spouse, parents and children only).
Vacations and holidays are not required under either state or federal law. However, employees have a legal right to ask for a day off for religious holidays, and denying this could result in charges of discrimination. Health insurance is another purely voluntary benefit, along with vision and dental plans.
If an employer decides to offer a health plan as a benefit to employees, it must be compliant with both federal and state regulations. The most important rule is to avoid creating a protected class issue. It doesn't mean every employee in the company has to have the exact same plan. It's just important not to differentiate between employees within a defined group such as production workers, managerial staff and so on.
Employers have the right to set eligibility criteria. For example, many companies only offer health plans to fill-time employees who are required to work more than a set number of hours per week. Coverage cannot be terminated if the employee is on sick leave, and any changes to the plan or its status requires a prior notification period of 15 days.
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.
It's important to note that a lot of changes to these rules are made every year in both Washington and Sacramento, and new laws are passed every other month. For instance, the federal Affordable Care Act has allowed the state legislature to approve the California Health Benefit Exchange where small businesses can now compare and buy health insurance which was previously unaffordable. The CHBE is just one example of how CA employee benefits are much more comprehensive and ahead of the curve as compared to most other states.
Employers in California must regularly pay everything from social security taxes to insurance premiums for unemployment and disability. The state also forces employers to buy into workers' compensation insurance, which pays for work-related injuries and shields the employer from personal injury lawsuits being filed by employees. Most employees in the Golden State are covered under the State Disability Insurance (SDI) Plan.
State laws do not require an employer to provide sick leave, but federal laws do mandate that employees should be able to take up to 12 weeks off each year for health related issues. This includes maternity leave as well as other health issues that need time off. Apart from the employee's own health, the Family and Medical Leave Act (FMLA) specifies that this leave may also be used to provide care for someone in the family (spouse, parents and children only).
Vacations and holidays are not required under either state or federal law. However, employees have a legal right to ask for a day off for religious holidays, and denying this could result in charges of discrimination. Health insurance is another purely voluntary benefit, along with vision and dental plans.
If an employer decides to offer a health plan as a benefit to employees, it must be compliant with both federal and state regulations. The most important rule is to avoid creating a protected class issue. It doesn't mean every employee in the company has to have the exact same plan. It's just important not to differentiate between employees within a defined group such as production workers, managerial staff and so on.
Employers have the right to set eligibility criteria. For example, many companies only offer health plans to fill-time employees who are required to work more than a set number of hours per week. Coverage cannot be terminated if the employee is on sick leave, and any changes to the plan or its status requires a prior notification period of 15 days.
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.
It's important to note that a lot of changes to these rules are made every year in both Washington and Sacramento, and new laws are passed every other month. For instance, the federal Affordable Care Act has allowed the state legislature to approve the California Health Benefit Exchange where small businesses can now compare and buy health insurance which was previously unaffordable. The CHBE is just one example of how CA employee benefits are much more comprehensive and ahead of the curve as compared to most other states.
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