What Employee Benefits Are Required By Law In California?

Saturday, September 30, 2023 06:29 Posted by Admin
What Employee Benefits Are Required By Law In California?

When it comes to employment benefits, California law mandates a number of them for the welfare and protection of employees. These include workers’ compensation insurance, unpaid leave of absence under specific circumstances, healthcare benefits for full-time employees, State Disability Insurance Contributions, and other statutory benefits.

Workers’ Compensation Insurance

Workers’ compensation insurance is a mandatory requirement for all employers in California, irrespective of the nature of the business or the number of employees1. This insurance covers medical expenses and lost wages if an employee gets injured or falls ill because of their job. It is designed to safeguard employees from financial hardships due to work-related injuries or illnesses.

Unpaid Leave of Absence

In 2020, AB 1223 was passed, which requires employers with 15 or more employees to provide an additional unpaid leave of absence of up to 30 business days under certain conditions2. While it does not directly translate into a monetary benefit, it offers employees job security during challenging times, ensuring they have a position to return to after their leave.

Healthcare Benefits

As per California law, larger employers with 50 or more full-time employees are required to offer healthcare benefits to those workers putting in at least 30 hours a week3. While smaller businesses are not mandated by state law to provide health insurance, they might face penalties under the Affordable Care Act (ACA) if they do not provide health insurance coverage to their employees.

State Disability Insurance Contributions

Employers whose employees are located in California are generally required to withhold and send state disability contributions to the Employment Development Department (EDD)4. This program provides short-term disability benefits to eligible workers who suffer a loss of wages when they are unable to work due to a non-work-related illness or injury, or a medically disabling condition from pregnancy or childbirth.

Other Statutory Benefits

Federal and California laws require employers to provide their employees with certain other statutory benefits5. These include social security and Medicare tax, unemployment insurance tax, and family and medical leave. However, not all benefits are mandatory for all employers. For instance, vacation, health insurance, vision and dental coverage, life insurance are beneficial, but they are not legally required for all businesses6.

Pension and Retirement Plans

While employee pension and retirement plans contribute significantly to an employee’s financial security post-retirement, they are not mandated under California law1. However, many employers choose to offer these benefits as part of their compensation package to attract and retain skilled employees.

Childcare Subsidy

In certain circumstances, California employers may be required to subsidize backup childcare7. This is generally applicable in situations where the employer’s actions result in an employee needing backup childcare.

In conclusion, California law mandates a range of employee benefits to protect the rights and welfare of workers. Understanding these requirements is essential for both employers and employees to ensure compliance and fair treatment. While providing these benefits does come at a cost to the employer, the long-term benefits of attracting and retaining quality employees often outweigh the initial expense. Always consult with a knowledgeable employment law attorney or HR professional to ensure compliance with all applicable laws and regulations.


Written by Todd Taylor

Todd Taylor

Todd Taylor oversees most of the marketing and client administration for the agency with help of an incredible team. Todd is a seasoned benefits insurance broker with over 35 years of industry experience. As the Founder and CEO of Taylor Benefits Insurance Agency, Inc., he provides strategic consultations and high-quality support to ensure his clients’ competitive position in the market.

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