--- title: "Statutory Benefits Explained: How to Stay Compliant" description: Unsure what statutory benefits you must provide? This guide breaks down federal, state and ACA rules in clear, simple terms. image: https://blog.axcethr.com/hubfs/Axcet%20HR%20Solutions%20HR%20consultant%20discusses%20statutory%20benefits%20(1200%20x%20628%20px)%20(1)%20(1).png --- - [Client Portal](https://www.axcethr.com/client-services/) - [Employee Login](https://www.axcethr.com/client-services/) [![AxcetHR Solutions Blog](https://blog.axcethr.com/hubfs/AxcetHR2021%20Blog/axcethr_logo_white%20(1).png)](https://www.axcethr.com/) - [About Us](https://www.axcethr.com/about-us/) - [Corporate Philantropy](https://www.axcethr.com/about-us/corporate-philanthropy/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [Values and Culture](https://www.axcethr.com/about-us/values-and-culture/) - [Kansas PEO](https://www.axcethr.com/about-us/kansas-peo/) - [Missouri PEO](https://www.axcethr.com/about-us/missouri-peo/) - [Careers](https://axcethrsolutions.prismhr-hire.com/) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [Why Choose Axcet?](https://www.axcethr.com/why-axcet/) - 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[Employee Safety & Risk Management](https://blog.axcethr.com/topic/employee-safety-risk-management) - [Employee Benefits](https://blog.axcethr.com/topic/employee-benefits) - [All about COVID-19 in the Workplace](https://blog.axcethr.com/topic/covid19) - [Kansas & Missouri HR News](https://blog.axcethr.com/topic/kansas-and-missouri-hr-news) - [Kansas City Interest News](https://blog.axcethr.com/topic/kansas-city-interest-news) - [PEO/HRO](https://blog.axcethr.com/topic/peo) - Choose Topic: - [Human Resources](https://blog.axcethr.com/topic/human-resources) - Payroll Administrations - [Employee Safety & Risk Management](https://blog.axcethr.com/topic/employee-safety-risk-management) - [Employee Benefits](https://blog.axcethr.com/topic/employee-benefits) - [PEO](https://blog.axcethr.com/topic/peo) Statutory Benefits Explained: How to Stay Compliant 6:08 # Statutory Benefits: Navigating Legal Requirements for Employers By [Kellie Rondon, SPHR](https://blog.axcethr.com/author/kellie-rondon) on [Sep 16, 2025](https://blog.axcethr.com/statutory-benefits) 5 min read [0 comment(s)](https://blog.axcethr.com/statutory-benefits#comments-listing) Share this: - - - - [whatsapp://send?text=https://blog.axcethr.com/statutory-benefits](whatsapp://send?text=https://blog.axcethr.com/statutory-benefits) - [mailto:?subject=Statutory%20Benefits%20Explained:%20How%20to%20Stay%20Compliant&body=https://blog.axcethr.com/statutory-benefits](mailto:?subject=Statutory%20Benefits%20Explained:%20How%20to%20Stay%20Compliant&body=https://blog.axcethr.com/statutory-benefits) ![Axcet HR Consultant discusses statutory benefits requirements (1) (1)](https://blog.axcethr.com/hs-fs/hubfs/Axcet%20HR%20Consultant%20discusses%20statutory%20benefits%20requirements%20(1)%20(1).png?width=1200&height=800&name=Axcet%20HR%20Consultant%20discusses%20statutory%20benefits%20requirements%20(1)%20(1).png) Over the past decade, the employee benefits landscape has shifted dramatically. Employees still expect employers to meet their traditional insurance needs (i.e., by providing health, life and disability insurance). But recently, employee values have shifted to include new expectations, especially in the realms of mental health, telemedicine, wellness programs and family leave.  With the influx of new and creative ways for employers to strengthen their compensation packages, many employers are left wondering: where do we start? What do we need to provide, by law, and how do we know if we’re meeting those requirements?  In this article, we’ll pause the noise (if only for a moment) and get back to basics. We’ll run through which benefits employers are required to offer by law—that is, the “statutory benefits.” In the end, you’ll know what you need to offer and where to turn to help you sort it out.  RELATED: [Unique Employee Benefits: The New Norm for Attracting Top Talent? >>](https://blog.axcethr.com/progressive-organizations-are-stealing-your-employees-with-these-emerging-benefits)  ## What Are Statutory Benefits?  “Statutory benefits,” or benefits required by statute, are the **mandatory benefits employers must provide to employees under federal, state or local law**. These are non-wage and non-salary benefits that vary depending on your business size, industry and location. If a benefit isn’t required by statute, offering it is optional.   ## Federal Statutory Benefits for All Employers All U.S. employers must provide full-time employees: ### Social Security and Medicare The Federal Insurance Contributions Act (FICA) requires employers to pay taxes that are used to support the federal government’s Social Security and Medicare initiatives, which in turn provide for employees.  While both employers and employees pay into these funds, employers must withhold Medicare taxes at 1.45% of an employee’s gross compensation, plus 0.9% of their compensation if the employee is a high earner. Businesses are also required to match 6.2% for Social Security funding (up to the wage base) and 1.45% for Medicare funding.  ### Unemployment insurance Unemployment insurance is another federal government initiative funded through payroll taxes at both the national and state levels. While unemployment insurance taxes are administered at the state level, paying into these funds is a requirement in all U.S. states.  ### Workers’ compensation insurance  Workers’ compensation insurance also varies in price and requirement by state, but, like unemployment insurance, is required at a basic level in all U.S. states.  [![7 reasons to choose a peo for workers' comp insurance](https://no-cache.hubspot.com/cta/default/2652187/4edceaec-4e7f-4dce-b1bc-9a7043c006ee.png)](https://cta-redirect.hubspot.com/cta/redirect/2652187/4edceaec-4e7f-4dce-b1bc-9a7043c006ee) ## State and Local Statutory Benefits For all employers, the statutory benefits required by state or local law for full-time employees vary based on location. Examples include: - **Short-term disability insurance** in states like California, Hawaii, New Jersey, New York and Rhode Island. - **State-sponsored retirement plans** in states like California, Connecticut and Illinois (unless employers offer a qualifying alternative). - **Paid sick leave** in certain states and municipalities, regardless of company size. Because state and local requirements differ, it’s best to consult with an [HR compliance](https://www.axcethr.com/services/human-resources/hr-compliance-specialist/) expert. ### [![How to Craft an Employee Benefits Package for All Generations](https://no-cache.hubspot.com/cta/default/2652187/2fe0964e-55ba-41c9-b352-1e1b250202fb.png)](https://cta-redirect.hubspot.com/cta/redirect/2652187/2fe0964e-55ba-41c9-b352-1e1b250202fb) ## Statutory Benefits for Applicable Large Employers (ALEs) Businesses with 50 or more full-time employees have additional requirements under the **Affordable Care Act (ACA)**, including: ### Health insurance If you are an ACA-covered ALE, you are required to offer qualifying health insurance to your full-time employees. The health insurance you provide must meet affordability and adequacy requirements set by the federal government.  In general:  - Your plan is subject to minimum essential coverage requirements  - Your employees’ premiums must not exceed 9.12% of their income  - Your plan must provide reasonable access to providers and specialists -  Your plan must pay for at least 60% of the cost of medical services covered by the plan RELATED:  [How to Meet Small Business Health Insurance Requirements Effectively >>](https://blog.axcethr.com/should-your-small-business-offer-health-insurance)  ### Leave that is compliant with the Family and Medical Leave Act (FMLA) While state-required leave may raise these minimums, the federal government’s FMLA provides that covered employers (i.e., those with 50 or more employees) must allow for 12 weeks of protected (unpaid) leave during the year for qualifying family and medical-related reasons.  If you run a business that employs fifty or more full-time employees, or if you’re growing and getting close to that number, it’s critical that you understand your obligations under the Affordable Care Act. RELATED:  [FMLA Rules: Answers to Your FAQs & Free Compliance Checklist](https://blog.axcethr.com/fmla-rules-faqs-and-compliance-checklist)  ## Why Statutory Benefits Matter Providing statutory benefits isn’t just about compliance—it’s about protecting your company from penalties, supporting employee well-being, and building trust. Going beyond the basics with voluntary benefits can also help attract and retain top talent. [![Better rates, bigger benefits and fewer headaches with PEO insurance. Contact Axcet HR Solutions](https://no-cache.hubspot.com/cta/default/2652187/interactive-190132211532.png)](https://blog.axcethr.com/hs/cta/wi/redirect?encryptedPayload=AVxigLIruUx%2BpessQypGu4qhSPEQ0TBw2LGnoNowwx2DrejJVfU1nvkp55lTICTd5K9sABBkcEXoOsy2fEnujLwxSU7Lk%2BEm0CK8S%2FY3wQhhd8Dgw1VsB%2F4rc4Pdt%2FyuuTi0K%2BPRfXEHB%2BmxvvcW%2FJY1ezVOuBThzrENK9NGC24ESKZGbbOsctth866gzdUlgDYgqJU%3D&webInteractiveContentId=190132211532&portalId=2652187) ## **Simplify Statutory Benefits with Axcet HR Solutions**  For many small businesses, deciding which benefits you offer can feel like an overwhelming task. Luckily, you don’t have to do it on your own. You have experts on your side, ready to help you fill in knowledge gaps and make compliant decisions confidently. With assistance from dedicated HR compliance experts, you’ll be empowered to make people-focused choices with the peace of mind you deserve.  Axcet HR Solutions is a [certified professional employer organization](https://blog.axcethr.com/certified-peos-what-are-they-and-why-does-certification-mattereo) with over thirty years of experience in risk management, HR compliance and more.  Let us handle the HR details while your business continues to grow and thrive. To find out more about how Axcet can help, [schedule a consultation](https://www.axcethr.com/schedule-consultation/) with our experts today. ## Statutory Benefits FAQs ### **Q: What are statutory benefits?** A: Statutory benefits are the mandatory benefits employers are legally required to provide, such as Social Security, Medicare, unemployment insurance and workers’ compensation. ### **Q: Do all employers have to provide health insurance?** A: Not all. Only Applicable Large Employers (50+ employees) are required under the ACA to provide qualifying health coverage. ### **Q: Are statutory benefits the same in every state?** A: No. While federal laws apply nationwide, state and local governments often add their own requirements, like paid sick leave or short-term disability insurance. ### **Q: What happens if an employer doesn’t provide statutory benefits?** A: Noncompliance can lead to hefty fines, legal liability and employee claims. It may also damage an employer’s reputation. ### **Q: How do statutory benefits differ from voluntary benefits?** A: Statutory benefits are required by law, while voluntary benefits (like wellness programs or telemedicine) are optional enhancements employers offer to stay competitive. [![Follow Axcet HR Solutions on Facebook](https://no-cache.hubspot.com/cta/default/2652187/interactive-178216580776.png)](https://blog.axcethr.com/hs/cta/wi/redirect?encryptedPayload=AVxigLLcV009nKSPOXqiSnNpgupq7%2BU9sw%2B1%2BhvsnRvPGIzAjdc1Dq8vIWUQASZAMXLgFJ9Ki6apUkLwy9U50mnymR4A%2Bs7WhBNxEwKx3mxlgD%2BKLxWtyomx23Z84N8MHn67krc5hQHBZV6nJV0VdUsc7xpY3oVvOCYJyR3p2Sm3jJTj37A9&webInteractiveContentId=178216580776&portalId=2652187) [![Kellie Rondon, SPHR](https://blog.axcethr.com/hs-fs/hubfs/_DSC0755-Edit.jpg?width=80&height=80&name=_DSC0755-Edit.jpg)](https://blog.axcethr.com/author/kellie-rondon) Written by #### [Kellie Rondon, SPHR](https://blog.axcethr.com/author/kellie-rondon) Kellie Rondón, SPHR, is a Human Resources Consultant at Axcet HR Solutions with over ten years of progressive HR experience and a Senior Certification in Professional Human Resources. Kellie enjoys providing clients with professional employee relations guidance, training and development, and compliance expertise catered specifically to small business. She has a passion for helping business owners and leaders strengthen their culture and business trajectory through strategic HR consulting. Her commitment to delivering peace of mind and fostering long-term client relationships is evident in her work and contributions to our team. Read more [View all posts →](https://blog.axcethr.com/author/kellie-rondon) ### Get HR Updates ### Table of Contents #### [Six Workers’ Comp Insurance Policy Challenges Small Businesses Face ![Axcet Director of Risk Management Steve Donovan discusses workers' comp insurance policy challenges](https://blog.axcethr.com/hubfs/workers_-comp-insurance-policy-_1200-x-628-px_%20(1).webp)](https://blog.axcethr.com/workers-comp-insurance-policy-challenges) #### [![peo cost analysis](https://blog.axcethr.com/hubfs/Four%20Ways%20a%20PEO%20Can%20Help%20Small%20Businesses%20Reduce%20Costs.jpg) PEO Cost Analysis: Understanding the ROI for Your Company](https://blog.axcethr.com/4-ways-a-peo-can-help-employers-reduce-costs) ## Let us know what you think... ![AxcetHR Blog](https://blog.axcethr.com/hubfs/AxcetHR2021%20Blog/axcethr_logo_white%20(1).png) - [Why Axcet](https://www.axcethr.com/why-axcet/) - [What We Stand For](https://www.axcethr.com/about-us/what-we-stand-for/) - [Expertise](https://www.axcethr.com/expertise/) - [Employee Benefits](https://www.axcethr.com/services/employee-benefits/) - [Human Resources](https://www.axcethr.com/services/human-resources/) - [Payroll Services](https://www.axcethr.com/services/payroll-and-tax-administration-services/) - [Risk Management](https://www.axcethr.com/services/workers-comp-and-employee-safety-risk-management/) - [Meet the Team](https://www.axcethr.com/about-us/meet-the-team/) - [Subscribe to Latest Resources](https://www.axcethr.com/subscribe-to-the-latest-resources/) - [Resource Library](https://www.axcethr.com/expertise/resource-library/) - [\[ Client Portal \]](https://www.axcethr.com/client-services/) - - - - - Search for: Copyright © 2023 Axcet HR Solutions – Kansas City's PEO Since 1988 | [Privacy Policy](https://www.axcethr.com/privacy-policy/) | [Terms and Conditions](https://www.axcethr.com/terms-conditions/) | [**Join our Team – Careers »**](https://axcethrsolutions.prismhr-hire.com/) 10975 Grandview Drive Suite 200, Corporate Woods Building 27, Overland Park, KS 66210 | Call us: 913-383-2999 *The IRS does not endorse any particular For more information on [certified professional employer organizations](https://www.axcethr.com/why-axcet/certified-peo/), go to [www.irs.gov](https://www.irs.gov).* Remove cookies ![](https://dc.ads.linkedin.com/collect/?pid=43031&fmt=gif) ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "Kellie Rondon, SPHR", "url" : "https://blog.axcethr.com/author/kellie-rondon" }, "dateModified" : "2025-09-16T16:51:42.847Z", "datePublished" : "2025-09-16T15:00:00.000Z", "headline" : "Statutory Benefits Explained: How to Stay Compliant", "image" : [ "https://blog.axcethr.com/hubfs/Axcet%20HR%20Solutions%20HR%20consultant%20discusses%20statutory%20benefits%20(1200%20x%20628%20px)%20(1)%20(1).png" ], "mainEntityOfPage" : { "@id" : "https://blog.axcethr.com/statutory-benefits", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://blog.axcethr.com/hubfs/_logo_axcethr_primary.png" }, "name" : "Axcet HR Solutions" } } ``` ```json { "@context" : "https://schema.org", "@id" : "https://www.axcethr.com/#organization", "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "US", "addressLocality" : "Kansas City", "addressRegion" : "MO" }, "aggregateRating" : { "@type" : "AggregateRating", "bestRating" : "5", "ratingValue" : "5", "reviewCount" : "100" }, "areaServed" : { "@type" : "Country", "name" : "United States" }, "award" : [ "IRS Certified Professional Employer Organization (CPEO)", "Award-Winning HR Solutions Provider", "SHRM Certified HR Professionals", "HRCI Certified HR Professionals" ], "contactPoint" : { "@type" : "ContactPoint", "areaServed" : "US", "availableLanguage" : "English", "contactType" : "Customer Service" }, "description" : "Award-winning Professional Employer Organization (PEO) providing comprehensive HR solutions, payroll services, employee benefits, and risk management to small and mid-sized businesses. 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Employees still expect employers to meet their traditional insurance needs (i.e., by providing health, life and disability insurance). But recently, employee values have shifted to include new expectations, especially in the realms of mental health, telemedicine, wellness programs and family leave. With the influx of new and creative ways for employers to strengthen their compensation packages, many employers are left wondering: where do we start? What do we need to provide, by law, and how do we know if we’re meeting those requirements? In this article, we’ll pause the noise (if only for a moment) and get back to basics. We’ll run through which benefits employers are required to offer by law—that is, the “statutory benefits.” In the end, you’ll know what you need to offer and where to turn to help you sort it out. RELATED: Unique Employee Benefits: The New Norm for Attracting Top Talent? >> What Are Statutory Benefits? “Statutory benefits,” or benefits required by statute, are the mandatory benefits employers must provide to employees under federal, state or local law. These are non-wage and non-salary benefits that vary depending on your business size, industry and location. If a benefit isn’t required by statute, offering it is optional. Federal Statutory Benefits for All Employers All U.S. employers must provide full-time employees: Social Security and Medicare The Federal Insurance Contributions Act (FICA) requires employers to pay taxes that are used to support the federal government’s Social Security and Medicare initiatives, which in turn provide for employees. While both employers and employees pay into these funds, employers must withhold Medicare taxes at 1.45% of an employee’s gross compensation, plus 0.9% of their compensation if the employee is a high earner. Businesses are also required to match 6.2% for Social Security funding (up to the wage base) and 1.45% for Medicare funding. Unemployment insurance Unemployment insurance is another federal government initiative funded through payroll taxes at both the national and state levels. While unemployment insurance taxes are administered at the state level, paying into these funds is a requirement in all U.S. states. Workers’ compensation insurance  Workers’ compensation insurance also varies in price and requirement by state, but, like unemployment insurance, is required at a basic level in all U.S. states. State and Local Statutory Benefits For all employers, the statutory benefits required by state or local law for full-time employees vary based on location. Examples include: Short-term disability insurance in states like California, Hawaii, New Jersey, New York and Rhode Island. State-sponsored retirement plans in states like California, Connecticut and Illinois (unless employers offer a qualifying alternative). Paid sick leave in certain states and municipalities, regardless of company size. Because state and local requirements differ, it’s best to consult with an HR compliance expert. Statutory Benefits for Applicable Large Employers (ALEs) Businesses with 50 or more full-time employees have additional requirements under the Affordable Care Act (ACA), including: Health insurance If you are an ACA-covered ALE, you are required to offer qualifying health insurance to your full-time employees. The health insurance you provide must meet affordability and adequacy requirements set by the federal government. In general: Your plan is subject to minimum essential coverage requirements Your employees’ premiums must not exceed 9.12% of their income Your plan must provide reasonable access to providers and specialists Your plan must pay for at least 60% of the cost of medical services covered by the plan RELATED:  How to Meet Small Business Health Insurance Requirements Effectively >> Leave that is compliant with the Family and Medical Leave Act (FMLA) While state-required leave may raise these minimums, the federal government’s FMLA provides that covered employers (i.e., those with 50 or more employees) must allow for 12 weeks of protected (unpaid) leave during the year for qualifying family and medical-related reasons. If you run a business that employs fifty or more full-time employees, or if you’re growing and getting close to that number, it’s critical that you understand your obligations under the Affordable Care Act. RELATED:  FMLA Rules: Answers to Your FAQs & Free Compliance Checklist Why Statutory Benefits Matter Providing statutory benefits isn’t just about compliance—it’s about protecting your company from penalties, supporting employee well-being, and building trust. Going beyond the basics with voluntary benefits can also help attract and retain top talent. Simplify Statutory Benefits with Axcet HR Solutions For many small businesses, deciding which benefits you offer can feel like an overwhelming task. Luckily, you don’t have to do it on your own. You have experts on your side, ready to help you fill in knowledge gaps and make compliant decisions confidently. With assistance from dedicated HR compliance experts, you’ll be empowered to make people-focused choices with the peace of mind you deserve. Axcet HR Solutions is a certified professional employer organization with over thirty years of experience in risk management, HR compliance and more.  Let us handle the HR details while your business continues to grow and thrive. To find out more about how Axcet can help, schedule a consultation with our experts today. Statutory Benefits FAQs Q: What are statutory benefits? A: Statutory benefits are the mandatory benefits employers are legally required to provide, such as Social Security, Medicare, unemployment insurance and workers’ compensation. Q: Do all employers have to provide health insurance? A: Not all. Only Applicable Large Employers (50+ employees) are required under the ACA to provide qualifying health coverage. Q: Are statutory benefits the same in every state? A: No. While federal laws apply nationwide, state and local governments often add their own requirements, like paid sick leave or short-term disability insurance. Q: What happens if an employer doesn’t provide statutory benefits? A: Noncompliance can lead to hefty fines, legal liability and employee claims. It may also damage an employer’s reputation. Q: How do statutory benefits differ from voluntary benefits? A: Statutory benefits are required by law, while voluntary benefits (like wellness programs or telemedicine) are optional enhancements employers offer to stay competitive.", "author" : { "@id" : "https://blog.axcethr.com/author/kellie-rondon#author", "@type" : "Person", "name" : "Kellie Rondon, SPHR", "url" : "https://blog.axcethr.com/author/kellie-rondon" }, "dateCreated" : "2025-09-16", "dateModified" : "2025-09-16", "datePublished" : "2025-09-16", "description" : "Over the past decade, the employee benefits landscape has shifted dramatically. Employees still expect employers to meet their traditional insurance needs (i.e., by providing health, life and disability insurance). 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