September 24, 2024

16 Employee Benefits to Know in 2024

Choosing what benefits to offer employees is a delicate balance. Some of these benefits might be too expensive for your company to offer, meaning you’ll need to decide which best serve your labor budget and your employees.

Plus, depending on where you’re operating and the size of your company, you might be required to offer some by law. And offering perks that are in high demand is a great way to attract top talent.

So, what are the mandatory benefits for employees and what extras should you offer?

What are employee benefits?

Virtually all companies offer employee benefits packages to their workers. The term refers to any of the tangible and intangible compensation and perks offered to workers beyond their wages and salary.

Employee benefits typically fit within three categories:

Mandatory benefits. These are benefits your company must provide to workers by law, like Medicare and Social Security or overtime pay.
Industry-standard benefits. These are workplace perks that no law requires you to offer but that most employers in your industry provide, like extra healthcare or 401(k) matching. If you don't offer them, you'll be at a competitive disadvantage when trying to attract talented workers.
Fringe benefits. These are extra benefits your company decides to offer to help you stand out from other employers and entice the best candidates to work for you, like fitness or transportation stipends.

16 types of employee benefits to consider

No company can offer every single benefit available, but there are some common types of employee benefits you should at least consider offering as part of your package. Here are 16 of them.

Standard benefits

The most common employee benefits include:

1. Health insurance. According to the Bureau of Labor Statistics (BLS), 96% of union employees and 69% of non-union employees in the private sector have access to health insurance as a workplace benefit. Employers may offer access to group coverage and, in some cases, subsidize premiums for employees and their families.

2. Retirement plans. In the private sector, 94% of union workers and 68% of non-union workers have access to retirement plans. These could include defined benefit plans where employers provide guaranteed pay in retirement or defined contribution plans like 401(k)s that allow employees to invest for retirement. Many employers offering 401(k) plans match some worker contributions.

3. Time off, including paid leave. Paid sick leave is available to 86% of private sector union workers and 77% of non-union workers. Some companies also offer paid leave for other reasons, like personal time or extended maternity leaves.

Some of these standard benefits are required by law. The Affordable Care Act requires employers with over 50 full-time employees (or full-time equivalents) to offer qualifying health insurance coverage. Larger employers covered by the Family and Medical Leave Act also must allow up to 12 weeks of leave in a 12-month period for qualifying reasons, like developing a serious health condition or caring for a family member. This leave doesn’t have to be paid, but your company can choose to offer a paid leave policy.

Health and well-being benefits

Many employers also offer health and well-being benefits. These are often classified as fringe benefits because they aren't always industry standard and they aren't required by law.

4. Wellness programs. Wellness programs can include perks like fitness stipends or smoking cessation programs. They help staff members improve their physical health, which can reduce insurance costs and cut down on missed workdays.

5. Mental health support. The American Psychological Association's 2023 Work in America study found that 92% of workers believe it's very or somewhat important to work for a company that provides mental health support. Mental health benefits include stress management education and Employee Assistance Programs (EAP) that provide access to third-party service providers, including therapists.

6. Pharmacy benefits. Prescription drug coverage, negotiated rebates with drug manufacturers, or home medication delivery are all examples of pharmacy benefits. Access to a flexible spending account (FSA) can also count under this umbrella.

Family benefits

7. Parental leave. Around 27% of private sector workers have access to paid parental leave. Parental leave offers mothers and fathers paid time off after the birth or adoption of a child.

8. Childcare subsidies. Some companies help staff pay for childcare or even provide on-site care.

9. Dependent care FSAs. Dependent care FSAs allow workers to put away money pre-tax to pay for qualifying childcare expenses such as day camp or preschool.

Working hours and time off

10. Flexible working hours. An estimated 82% of workers whose companies offer flexible schedules report taking advantage of this benefit, according to a Deloitte survey. Flexible working hours come at little cost to your business but have substantial benefits for employee mental health.

11. Remote work. Many companies went remote during the COVID-19 pandemic and some still allow staff members to work from home. And, one USA Today survey found 58% of white-collar workers would prefer to work remotely at least three days per week.

12. Commuter benefits. Some companies offer benefits to those who commute to the office, like fuel subsidies, public transportation passes, or free parking.

Financial security

13. Financial growth benefits. Companies may offer support to help employees improve their finances, like access to financial advisors and financial planning seminars.

14. Life insurance. Some businesses allow employees access to group life insurance coverage and either subsidize or pay for premiums.

15. Investment opportunities. Employers may offer staff members stock options to allow them to own a share of the business.

16. Tuition or student loan reimbursement. Some companies subsidize tuition costs or provide employees with help repaying their student loans.

Some companies may also offer other benefits that increase financial flexibility for their staff. For example, same-day pay or earned wage access allows workers to access a portion of their pay as they work instead of on the usual weekly or biweekly payment schedule.

If you’re an employer looking to offer earned wage access and other benefits to your employees, EarnIn can help. With the Cash Out tool, employees can access their pay as they work, up to $100 a day and $750 per pay period, with no interest, no mandatory fees, and no credit checks required.

Why are employee benefits important?

Now that you know what employee benefits are, you may be wondering, why are employee benefits important?

There are three main reasons:

A good benefits package makes attracting great talent easier. One Glassdoor survey found that 63% of workers look for information about benefits when reviewing job ads. If you aren't offering at least the industry standard, the most qualified candidates might pass on your offer.
Good benefits increase your employee retention rate. If you're providing workers with perks like flexible time and full-coverage health insurance, they'll be less likely to leave for another opportunity.
Happier employees might work harder. Benefits can also impact job satisfaction, and employees who are happier are 12% more productive, on average.

Choosing the right benefits for your employees

Designing employee benefits packages can be complicated because you must consider:

The company budget and the costs of different employee benefits
What's required by law
What's standard in your industry
What perks you'd need to attract and retain the best talent
How you can best support your employees as putting people first helps your company grow

To make a decision on which common employee benefits and which fringe benefits you'll offer, start by researching what the federal government and your state require.

For example, California has laws requiring sick pay, but there’s no federal rule mandating paid leave due to illness. Most states don't require this coverage, so you need to know the rules that apply to you, especially if you operate in multiple states.

Next, you can research:

How much do benefits cost per employee?
What are your competitors offering?
Which benefits are most important to workers, according to surveys or the BLS?

You'll also need to look closely at the total compensation packages you're offering — including benefits — to make sure you don't exceed your labor budget. These costs vary widely, based on your state, company size, and provider.

Best practices to implement employee benefits packages

To make sure you create an employee benefit package that's attractive, sustainable, and legal, there are a few best practices to follow. Your company should:

Establish a budget for benefits
Research benefits options, like 401(k) administrators and group health insurance providers
Get feedback from current employees to better understand their needs
Communicate your benefits package to current and potential future employees
Review your benefits plan annually to make any necessary adjustments

FAQs

Am I required to offer employee benefits?

The benefits you're required to offer employees vary depending on the size of your business and where you operate.

Federal law requires every company to provide certain benefits to workers, like paying at least minimum wage. Larger employers are also required by federal law to offer group health insurance to staff and provide 12 weeks of unpaid leave in qualifying situations, such as for the birth of a child.

Some states also have additional requirements, so check to see what’s required wherever your business operates.

What are mandatory benefits for employees?

Mandatory benefits are any benefits required by law. Examples include unemployment insurance and workers' compensation insurance in most states.

What benefits do employees value most?

Workers place a very high value on certain types of employee benefits, like health insurance and retirement benefits. Paid time off, company-provided life insurance, and mental health support are also popular benefits.

How do you determine what benefits to offer employees?

When deciding what benefits for employees your company should offer, start by researching what's required. For example, some larger companies must provide health insurance.

You may want to offer more than just the minimum required benefits to attract top talent, though. To decide, research what your competitors are offering, solicit feedback from current staff, and read studies and surveys online showing what benefits are in demand. Set a budget, then use the information you've gathered to decide which perks to prioritize.

Boost your team's well-being with Earned Wage Access

With EarnIn, companies can choose to offer early access to paychecks, giving their employees more say over their finances and boosting retention. The benefits range from same-day pay with the Cash Out tool, up to $100 a day or $750 per pay period, with no interest, mandatory fees, or credit checks.

Plus, EarnIn’s credit monitoring tool lets users monitor their credit score at any time, for free.

EarnIn requires no technical integrations or maintenance, so you can get started in as few as 10 days. Start paying your employees at their speed today.

1. EarnIn is a financial technology company, not a bank. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge hidden fees for use of its services. EarnIn services may not be available in all states. Restrictions and/or third party fees may apply. EarnIn services may not be available in all states. For more info visit earnIn.com/TOS

2. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. EarnIn does not charge hidden fees for use of its services. EarnIn services may not be available in all states. Restrictions and/or third party fees may apply, for more information please visit http://EarnIn.com/TOS.

Calculated on the VantageScore 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0. EarnIn services may not be available in all states. Learn more: https://www.experian.com/assets/consumer-information/product-sheets/vantagescore-3.pdf