What All Entrepreneurs Should Know About Employee Benefits
~by Eileen O’Shanassy~
As business begins to expand, entrepreneurs will often realize that their eighteen hour days are not going to be enough. They will need to find employees with potential who are willing to dedicate to themselves to the company with the same drive. These employee will define the future of a company which is why employers should recognize the need for employee benefits. Employee benefits can be a little complicated, but are also a great motivator and can keep you competitive in the market. So it is important to do a bit of research regarding some of the nuances and legal matters they are involved in.
Know What is Legally Required
There are some benefits that serve as a bonus or an additional compensation for working with a particular company. On the other hand, there are also benefits that employers are required by federal or state law to offer. These will include time off for military service and jury duty, workers’ compensation, withholding FICA taxes, and a few others. If the entrepreneur wants to motivate talent, they should consider adding other benefits, such as health and life insurance, paid vacations and retirement plans. These may not be a legal necessity, but might be thought a practical necessity. A talented employee is far more likely to accept a position that comes with these additional benefits.
Handle Paperwork with Care
Anybody who works in an office can testify that paperwork can be a little boring. A Human Resources representative might have to fill out the same form multiple times for different employees, which can be very redundant and tedious and result in a few minor errors. But these minor errors could result in a denial of coverage for the employee to whom it was promised and even expensive legal fees. Insurance paperwork will therefore need to be handled with care and attention to detail. If you do them yourself, be sure you double check and go online if needed.
Identify Desirable and Undesirable Benefits
It might seem like a good idea to offer every possible benefit to employees, but this can be very expensive and is unnecessary. If an employee is a single, eighteen-year-old girl who is in college, she probably does not need life insurance benefits. She would work for the company even if she did not have it. A company vehicle might seem like a nice perk, but it is not really necessary for most employers. The wise entrepreneur will do some research into the demographics of her potential employees and discern which benefits they value.
The Scope of the Benefits
Employers will sometimes offer benefits at a group rate. This allows the employee to add their family, relatives and even some friends to their insurance plan. But the ability to add friends to one’s insurance policy is simply not a necessity, whether legal or practical. Employees do not expect it, and it is perfectly reasonable to forego that option. In addition to the group rate expense, it can cause a flurry of problems. The insurance company could challenge a large claim and cancel the policy. There are too many variables in group rate insurance policies.
Consult with a Reputable Financial Services Company
Insurance policies and retirement plans can have a lot of nuances. There is no universal plan that will be appropriate or adequate for every company. That is why many entrepreneurs will outsource to a financial services company. Of course, all financial service companies are not created equal. A little bit of research and consultation with their previous clients will be warranted. Places that specialize in retirement investments might be a better option for some and not others.
There is good news and bad news. The bad news is that employee benefits can be tricky. The good news is that a lot of other entrepreneurs have already made the mistakes and will share their wisdom to help new companies avoid them.
Eileen O’Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking and kayaking. Check her out on Twitter @eileenoshanassy.