Employment benefits, often known as fringe benefits, are a variety of monetary and non-cash advantages a company provides to employees as part of their pay package and wages. It is a broad term that encompasses a wide range of products that might be classified as advantages.
For example, an employee’s benefits package might include medical and dental insurance, life insurance, retirement funds, pension plans, and disability provisions. Employee benefits packages may also include goods such as company-sponsored automobiles or work attire.
Depending on their definition, some employee perks may affect how the business and its workers are taxed. For example, although most fringe benefits are taxable in general, specific types of these benefits, such as educational aid, might be excluded from an employee’s tax return.
If you need clarification about whether you need to claim specific employee perks on your tax return, you should get advice from your accountant or a local tax lawyer.
How Do You Get Employment Benefits?
Employers are obligated to give employment benefits to their workers under the criteria established by both state and federal regulations. Some frequent instances of these advantages are as follows:
- Family leave;
- Unemployment insurance;
- Medical leave (including maternity leave);
- Workers’ compensation insurance;
- Health insurance (note that this is only mandatory when a company has 50 or more workers).
Employee benefits are not always mandated by law; instead, additional advantages or perks must be negotiated between the business and its workers to be obtained.
In certain situations, an employer may give an employee a perk choice, such as free laundry services, to convince the employee to take a position. The parties will agree on how this benefit will be allocated to the employee before the employee takes the job.
Most of the time, these discussions take place before the employee starts work, and the parties do it through an employment contract or employment agreement.
Employment benefits may be renegotiated regularly as the firm’s requirements and the employees change.
What Happens if My Employment Benefits Are Wrongfully Withheld?
Employers are typically barred from withholding benefits to which employees are legally entitled. This is particularly true for benefits mandated by law, such as those mentioned in the preceding list, such as family and medical leave.
Furthermore, any benefits agreed or renegotiated under a legal employment contract may not be withheld from the employee.
When seeking legal remedies, an employee who has had their benefits withheld may have numerous choices.
For example, they may disclose the illegal withholding to a federal administrative agency. After receiving the employee’s complaint, the agency will investigate if the employer violated the applicable employment laws.
If the agency determines that the employer is in violation based on its findings, it would most likely prescribe an appropriate remedy to prevent the business from violating again.
The aggrieved employee may take private action against their company to recuperate any damages.
What Are the Remedies for Wrongful Employee Benefit Withholding?
There are various options for resolving an erroneous withholding of employee benefits. These remedies may include the following:
- Benefit recovery, including back pay and liquidated damages.
- Punitive damages if the employer intends to withhold benefits knowingly and has repeatedly violated the applicable laws.
- An injunction directing the employer to modify firm policies and processes.
Some benefits require employees to put a percentage of their earnings into funds for retirement accounts, insurance plans, etc. Depending on the circumstances, certain fees may also be recoverable.
What Are the Defenses an Employer May Use Against Employment Benefit Claims?
When employees file a claim against their employer related to employment benefits, the employer might use various defenses to refute the allegations, including the following:
- Statute of limitations: Employers may argue that the employee’s claim has exceeded the time limit set by law for filing such claims. If the statute of limitations has expired, the claim may be dismissed.
- Compliance with laws and regulations: Employers might assert they have complied with all relevant laws and regulations related to the specific benefit. They may provide documentation proving they have followed all applicable rules and requirements.
- Good faith: Employers may argue that they acted in good faith, meaning that they did not intend to deprive employees of their entitled benefits or to discriminate against them. They might show evidence of efforts to comply with the law or to correct any mistakes that may have occurred.
- Employee misconduct: In some cases, employers may argue that the employee’s own actions or misconduct led to the denial or loss of the benefit in question. For instance, if an employee is fired for cause, the employer might argue that they are not entitled to certain benefits due to their termination.
- Ambiguity in contract or plan terms: Employers may argue that the employment contract or benefit plan terms are ambiguous or open to interpretation and that their interpretation is valid under the circumstances.
- Waiver or estoppel: Employers might claim that the employee waived their right to the benefit in question or is estopped from claiming it due to their actions or inactions.
- Independent contractor status: In some cases, employers may argue that the individual is not an employee but an independent contractor and, therefore, not entitled to the same benefits as employees.
Are There Any Illegal Employment Benefits?
While most benefits are legal, some can be considered illegal if they violate labor laws, anti-discrimination laws, or other regulations.
The following are a few examples of illegal employment benefits:
- Discriminatory benefits: Employers cannot offer benefits that discriminate based on protected characteristics, such as race, gender, age, religion, sexual orientation, disability, or national origin. For example, offering health insurance only to male employees would be illegal.
- Unequal pay for equal work: Employers are generally required to provide equal pay for equal work, meaning they cannot provide different pay or benefits to employees who perform the same job functions based on protected characteristics, such as gender or race.
- Below minimum wage payments: Employers must adhere to minimum wage laws and cannot pay employees below the mandated minimum wage, even if the employee agrees, which includes offering benefits that result in an employee’s total compensation being below the legal minimum wage.
- Illegal bonuses or incentives: Employers cannot provide bonuses or incentives tied to illegal activities or that encourage employees to break the law, such as providing a bonus for an employee who agrees to engage in insider trading or providing incentives for salespeople to mislead customers.
- Non-compliant benefits: Benefits that do not adhere to specific regulations, such as the Employee Retirement Income Security Act (ERISA) in the United States, may also be considered illegal. For example, an employer who offers a retirement plan that does not comply with ERISA’s rules and regulations could face penalties.
Do I Need to Hire a Lawyer for Employment Benefits Issues?
Cases involving concerns with job benefits might prove difficult. As a result, it may be in your best interests to seek the advice of an experienced workers’ compensation lawyer.
Even if you are not currently engaged in a lawsuit, visiting an employment lawyer for legal guidance on your employment benefits can be beneficial. Your lawyer may help you from the start by negotiating, drafting, and reviewing any contracts you may enter into with your company.
If you believe that your entitlement to benefits has been infringed, a lawyer may help you in either filing a claim in court and providing counsel on your side or guiding you through the process of reporting an employer’s misbehavior to the proper administrative body.
Use LegalMatch to find a workers’ compensation lawyer today.