Statutory & Non Statutory benefits

There are some Statutory Benefits which must be provided to employees such as:

1. Social Security (Federal Program paid through FICA Tax withholding from employees pay and matched by employer)

2. Medicare (Federal Program paid through FICA Tax withholding from employees pay and matched by employer)

3. Workers Compensation provides a benefit to employees who are injured on the job. The coverage is usually purchased through a Property and Casualty Broker along with the Businesses General Liability policy. The Workers Compensation premiums are based on payroll and job classification of the employees. 

4. Statutory Disability provides an income replacement for those employees who suffer an accident or sickness off the job. In New Jersey employers contribute 0.5 percent of the first $32,600 of the employees’ wages during 2016. After contributing for 3 years, an employer becomes eligible for an experience rating (ranging from 0.1 percent to a maximum of 1.1 percent) that depends on the employer’s contribution and benefit history and on the balance in the state fund. State-fund employers also pay their pro rata share of the costs of administering the state fund. Employers covered under private plans and self-insured employers pay up to 1/20 of 1 percent of total taxable wages for the state’s cost in monitoring those plans. 

5. Federal and State Unemployment Insurance. 

The most common Non-Statutory Employee Benefits include:

1. Health Insurance: provides reimbursement to employees for medical expenses incurred by them or their family members. Health Insurance purchased by the Employer is priced on a Group basis. 

2. Dental Insurance provides reimbursement to employees for dental expenses incurred by them or their family members. Dental insurance rates are determined by gender and age.

3. Group Life Insurance provides a Death Benefit to an employee’s beneficiary in the event of an employee’s death. Rates are determined by age and gender.

4. Group Long Term Disability Insurance provides reimbursement to an employee who becomes disabled. The benefit is expressed as a percent of salary but no greater than a certain maximum. Depending on the size of the group and the salaries the maximum could be as low as $3,000 up to $10,000.) The benefit is paid to the employee after a stated number of days after the disability occurs. The common waiting/elimination periods are 90 or 180 days.

5. Group Short Term Disability Insurance provides supplemental reimbursement above the Statutory Disability payment to an employee who becomes disabled. The New Jersey statutory disability benefit is a weekly benefit of two-thirds of the claimant’s average weekly wage (based on the average of the last 8 weeks’ employment prior to disability), but not more than 53 percent of the state’s average weekly wage. The maximum weekly benefit for 2016 is $595. The Group Short Term DI will supplement the statutory benefit. 

6. Vision Plan provides reimbursement for eye exams and glasses/contact lenses.

7. Section 125 Plan (Medical Reimbursement, Dependant Care, Transportation). 

8. Pension Plan (401k, Profit sharing, Money Purchase, etc). Most new companies will select a 401k plan to offer to employees. The employer will decide if it will match the employee’s contribution in some amount.