As a result of the employment relationship, employees are entitled to certain benefits as a matter of law, such as retirement and disability compensation. In addition, once an employer offers a pension or health insurance, federal law requires the employer to provide the benefits offered, without interference.

Federal and state law do not require employers to pay employees for time away from work, such as vacation, holiday or sick time off. When employers offer paid time off from work, state law typically answers questions of employee entitlement to paid time off benefits. Similarly, certain compensation benefits, such as incentive plans and stock option plans, are primarily creatures of state contract law and depend on what the employer chooses or agrees to offer.  Incentive and stock option plans may, however, have serious federal tax consequences.

Statutory Benefits

Statutory benefits, meaning benefits required by law, include:

  • retirement and disability benefits, like social security;
  • unemployment compensation benefits; and
  • workers compensation benefits.

Employers are not required to provide retirement and disability benefits. However, federal law requires private employers, and state law requires public employers, to collect, match and remit a certain percentage an employee's payroll to the federal or state treasury to fund the retirement and disability benefits.

Welfare Benefit Plans- ERISA

Employers may, but do not have to, provide pension, health insurance, disability insurance and severance benefits.  Employers who provide benefits under a plan are free to modify or terminate the plan.  However, under the Employee Retirement Income Security Act of 1976 (ERISA), employers who provide such plans must provide the designated benefit to the covered participant upon the happening of the specified event. For example, once a covered employee becomes seriously ill, an employer cannot refuse to provide health insurance coverage. Similarly, ERISA prohibits an employer from terminating an employee for the specific purpose of preventing or interfering with the employee's use of the plan. ERISA also imposes fiduciary obligations on certain administrators and sponsors of ERISA plans.

Vacation, Holiday and Paid or Sick Time Off

Employers likewise have no obligation to provide paid time off from work. For those that do, state law answers questions about vacation, holiday or paid or sick time off, such as:

  • when and how an employee accrues paid time off; and
  • whether an employee is entitled to accrued but unused time off at termination; and

In Ohio, for example, courts do not impose vacation, holiday or paid or sick time obligations on employers. However, if an employer has a policy of providing time off, Ohio courts will hold the employer to it, even if the employer did not include the paid time off policy in an employment agreement.

Compensation Benefits

Employers may also offer employee incentive plans, stock option plans or other  forms of non-wage compensation.  State contract laws govern most compensation benefits and the employer's plan, or an agreement between the employer and employees, controls the timing, amount and conditions of payment of compensation benefits.

Stock option plans are subject to federal tax laws that discourage stock option awards at strike prices below the underlying stock's fair market value at the time of the stock option award.  See Guidance Under § 409A of the Internal Revenue Code.

Relationship between Employee Benefits and Leave Rights

Employee benefits such as disability insurance, vacation or other paid time off, provide an employee with compensation or other valuable benefit when he or she is away from work.  A related but different employee right is to restoration to his or her job when he or she is ready to return to work. An employee's restoration rights are found primarily in the Family and Medical Leave Act, the USERRA Military Leave Act and similar state laws.

As a result, an employee's absence from work often implicates two separate sets of law. Specifically, one set of laws will determine what, if any, benefit the employee may receive while he or she is on a leave of absence. The other set of law determines what rights, if any, an employee has upon his or her return to work.  Benefit and restoration questions arising out of an employee's absence from work while on leave are thus some of the thorniest and confusing questions faced by employees and employment lawyers. 

Related Articles from around the web (219)

Kentucky Unemployment Insurance Benefits: Employee Is Disqualified From Benefits Because of Repeated Tardiness

Feuer on Who is Entitled to Life Insurance Benefits and Top-Hat Benefits from an ERISA Plan Following a Divorce or a Marital Separation?

Striking Out with Unemployment Benefits: Minor League Baseball (MLB) Players Hurdle to Collect Unemployment Insurance Benefits

Police officer denied accidental disability retirement benefits and performance of duty retirement benefits

Reforming Benefits

A Primer on Unemployment Benefits

A Primer on Unemployment Benefits

A Primer on Unemployment Benefits

Unemployment Benefits Extended Again

Benefits & Leaves

A Primer on Unemployment Benefits

When Should Unemployment Benefits End?

Severance Pay and Unemployment Benefits

Unemployment Benefits Recipients Do More, Not less, to Look for Work

Benefits Of Federal Minimum Wage

Kennedy on benefits articles you need to read

NWC benefits from new group of interns

The Hidden Costs of Commuter Benefits

Help - I was disqualified for unemployment benefits. How do I get re-qualified?

Severance Pay and Unemployment Benefits

Fronstin: Unions = Health Benefits

Cheating Workers Out Of Rights, Benefits

Maher on the Benefits of Opt-In Federalism

International Sanctions with Domestic Benefits

Maryland Unemployment Benefits Extended

Raising The Minimum Wage Benefits All

Federal Contractors and Wages and Benefits

Texas Unemployment Benefits Cut

At Least 30 Countries Have Unemployment Benefits More Generous Than The U.S.

Help - I was disqualified for unemployment benefits. How do I get re-qualified?

Terminated for Absenteeism? You May Still Be Entitled to Unemployment Benefits

Unemployment Benefits Protect Seasonal Workers

Is Sabbatical a Form of Vested Vacation Benefits?

Wal-Mart Slices Health Benefits

Watch for Employers Using Benefits as Bargaining Chips

More Recently Published Scholarship: Employee Benefits

End of Unemployment Benefits Hitting Workers

Kodak Bankruptcy Motivated by Retiree Benefits

New Littler Blog: Employee Benefits Counsel

New Littler Blog: Employee Benefits Counsel

New Litter Blog: Employee Benefits Counsel

New Littler Blog: Employee Benefits Counsel

New Littler Blog: Employee Benefits Counsel

New Litter Blog: Employee Benefits Counsel

New Litter Blog: Employee Benefits Counsel

Unemployment Benefits – State Law

Watch for Employers Using Benefits as Bargaining Chips

Can I get workers' compensation benefits from jail?

NYT Has 411 on Unemployment Compensation Benefits

Benefits Prof Listserv Moves to Marquette

Unemployment Benefits Extension Bill Stalls Yet Again

House Approves Measure Extending Unemployment Benefits

A gap in federal unemployment benefits is now unavoidable. Here’s why.

Millions of gig workers are still waiting for unemployment benefits

Unemployment Benefits Bill Ready for Obama's Signature

Unemployment Benefits Extension Bill Stalls in Senate

Study shows benefits of anti-retaliation policies

General Motors To Offer Benefits To All Its Married Workers

Workers are worried about having their benefits cut. With good reason.

Stenographer's appeal for disability retirement benefits denied

Marquette Benefits Extension and the Domestic Partnership Registry

Do Changes in Benefits for Public Employees Violate the Contracts Clause?

ERISA: The Anti-Cutback Rule for Accrued Benefits

How Does the Fall of DOMA Impact the FMLA and Other Employee Benefits?

CDF Announces Addition of Employee Benefits Practice

Is Severance Pay Deducted from Unemployment Benefits in Maryland?

COBRA Benefits May Cost You Less Due to Stimulus Package

Congress Considers a Bill to Extend COBRA benefits

How Cuts to Unemployment Benefits Will Hurt Rural People

COBRA Subsidy, Unemployment Benefits Extended to June

Article 78 appeal for benefits granted for fire fighter

Five cases of denied accidental disability retirement benefits

Former Lieutenant Granted Supplemental Wage Benefits by the Court

Bill Temporarily Extending COBRA, UI Benefits Stalls

I just got a letter saying my workers' compensation benefits will be cut off. Now what?

On the Path to Economic Recovery: Extended Unemployment Benefits

Senate Ends Republican Filibuster Against Jobless Benefits

EDD Will Deny Unemployment Benefits to Claimants Not Authorized to Work in US

Severance Pay can reduce Ohio Unemployment Compensation Benefits

Police Lieutenant denied accidental disability retirement benefits

I burned myself at work. Can I get workers' comp benefits in Georgia?

End of Extended Jobless Benefits Hits More than 500,000

Poll Shows More People Unhappy with Health Insurance, other Benefits

Even pirates recognized the importance of workers' compensation benefits

Misrepresentation in Writing Prohibits Receipt of Workers' Compensation Benefits

$1,715,815 citation for not paying prevailing fringe benefits

Texas Unemployment Law - How Temporary Work Affects Your Benefits

Insurance company pulls disability benefits over Facebook photo

What are the benefits of camera technology for the Georgia car accident victim?

Walmart Tells Workers Who Ask About Unions That Benefits And Vacation ‘Might Go Away’

Federal Unemployment Benefits Expire Due To Congressional Inaction

Correction Officer denied accidental disability retirement benefits

New York Unemployment Benefits No Longer Available to Former Employees Receiving Severance

Who should have to pay back overpaid Unemployment Benefits in North Carolina?

Shnister: Professional Employer Organizations & Workplace Benefits

What the Supreme Court's DOMA Ruling Means for Immigration Benefits

U.S. workers filed 881K claims for jobless benefits last week

Court officer's accidental disability retirement benefits denied

Compromise Bill Extending COBRA, Unemployment Benefits Introduced

President Obama signs the Veterans' Benefits Act of 2010

Unum's Termination of Disability Benefits, After Paying for Five Years, Reversed

Flight Attendants Push for Equal Benefits for Domestic Partners

Maintenance worker denied ordinary disability retirement benefits

Does my sprain or strain entitle me to workers' compensation benefits?

What the Supreme Court's DOMA Ruling Means for Immigration Benefits

Can exotic dancers get workers' compensation benefits in Georgia?

Facebook photos result in loss of workers' compensation benefits

Guide to Disability Benefits Under the Federal Employees Retirement System (FERS)

New Maryland Law Protects Unemployment Benefits for Victims of Domestic Violence

Getting on the BRT Bus: U.S. Cities Eye Mexico Program That Benefits Workers

Could injuring myself while fornicating on a business trip mean I get workers' comp benefits?

Damages Recoverable under RICO for Fraudulent Deprivation of Workers Compensation Benefits

Senators Introduce Unemployment Benefits Extension Bill that Would Apply to All 50 States

Democrats call for UI system fix as millions face another lapse in benefits

Oh Great, More CEOs Telling Us We Need to Cut Social Security and Medicare Benefits

Can I receive workers' comp benefits in Georgia for a mental injury?

Feigenbaum and Riemer on Discretionary Review of Insured ERISA Benefits Cases

Another 2.1 million seek new jobless benefits. Pandemic Recession will stick it to millennials

Third Annual ERISA, Employee Benefits, and Social Insurance National Conference

Third Annual ERISA, Employee Benefits, and Social Insurance National Conference

Injured Fishermen and Seamen May Receive Maintenance Benefits While on Light Duty

2.1 million new unemployment claims filed last week, as workers still struggle to get benefits

‘A meaningful hit to the economy’: What could happen if Congress cuts unemployment benefits

As job losses mount, states struggle to pay extended benefits

Georgia woman wins workers' compensation benefits on appeal

Two New Tax Benefits Aid Employers Who Hire and Retain Unemployed Workers

Bill Would Extend FMLA Benefits and Protections to Additional Family Members

California Employers Must Now Provide Health Benefits for Four Months for Pregnancy Disability

Living Wage Law Would Create Benefits for Business, City’s Economy

Municipal lawyer granted retirement benefits but denied additional relief

Correction Officer denied Article 78 appeal for disability retirement benefits

House Passes Bill Temporarily Extending COBRA, Unemployment Benefits

President Obama signs the Veterans' Benefits Act of 2010

Obama Signs Bill Temporarily Extending COBRA, Unemployment Benefits

Deficit Craze Stiffs Jobless Again — 3 Million Could Lose Benefits in July

President Signs Bill Providing Temporary Extension of Expiring Benefits

Former Massachusetts Reform Head Warns HHS Not To Overreach On Essential Benefits

Maine governor faces call for investigation on pressure to deny unemployment benefits

I slipped and fell at my Georgia job. Am I eligible for workers' compensation benefits?

Bill Would Extend COBRA Benefits to Same-Sex Spouses, Domestic Partners and Their Dependents

Workplace bullying targets winning unemployment benefits appeals in New York State

Employee Fired for Working Additional Hours Eligible for UC Benefits Despite Prior Warning

Long-Term Employee Ineligible for UC Benefits for Violating Workplace Conduct Policies

SCOTUS case on Federal Employees Health Benefits Act preemption is settled

American Benefits Council Urges Employer Flexibility for Final Healthcare Bill

I can't make ends meet on temporary total disability benefits. Do I have options?

My Georgia workers compensation adjuster cut off my benefits after a light duty release. Is this okay?

Is cutting off workers' compensation benefits to illegal aliens a good idea?

9th Circuit: Benefits Discrimination against Same Sex Couples Violates Equal Protection

Police officer denied Accidental Disability Retirement Benefits for on the job injury

If dogs become people (rather than property) under the law, will they eventually get workers' comp benefits?

Senate Approves Bill Extending COBRA, UI Benefits, Pension Relief Measures

A Claim for Workers Compensation Benefits Is Property Under RICO, Sixth Circuit Rules

EEOC Commissioner targets companies offering employees abortion travel benefits

Starbucks Holds Life-Saving Benefits Over Trans Workers’ Heads

Suffolk County Police Officer denied accidental disability retirement benefits

Supreme Court Grants Cert in Federal Employee Health Benefits Case

South Carolina limits workers' compensation benefits for law enforcment

Employee's History of Absenteeism Sufficient to Deny UC Benefits Even if Final Incident Justified

Bill Would Strengthen Worker Benefits, Limit Executive Pay in the Event of Bankruptcy

Police officer's Article 78 appeal for accidental disability retirement benefits denied

Retirement Benefits Denied Due to Substantial Evidence Presented by New York State

Undocumented Immigrant Entitled to Benefits For Injury Under Longshore Harbor Worker Compensation Act

Call for Papers for Third Annual ERISA, Employee Benefits, and Social Insurance National Conference

Should I engage in nude dancing while receiving workers' comp disability benefits in Georgia?

Call for Papers for 12th Annual John Marshall Employee Benefits Symposium on ACA

Firefighter wins workers' comp benefits in appeals decision that rocks state

Senate Advances Tax Bill Extending Unemployment Benefits, Decreasing Payroll Taxes

Akutan Airport: Good News for Trident Seafoods - Long-term Benefits to Alaska?

Discovery & Trial In An ERISA Disability Benefits Case, Seventh Circuit Rules

I believe bullying at work led to my injury. Am I entitled to Georgia workers' comp benefits?

Thomas White article on annuities in 401(k) plans appears in May issue of Benefits magazine

Bill Would Limit Highly-Paid Executives from Receiving Additional Retirement Benefits Under Q-SERPS

House Passes Bill Extending Emergency Unemployment Benefits, Payroll Tax Reduction

Washington University Law School ERISA Conference: Employee Benefits in an Era of Retrenchment

Court finds Police Officer's Injuries as Work Related and Claims Her Eligible for Benefits

Paul Starkman writes for Inside Counsel on the benefits and pitfalls to employers of smart phones and new technologies

IRS Provides Guidance on HIRE Act's Employer Tax Benefits, Issues Draft Affidavit Form

Plan Administrator's Written Representations Support Equitable Estoppel on Employee's Claim for Pension Benefits

Court Stands Firmly on Decision to Deny Petitioner's Application for Accidental Disability Retirements Benefits

Paul Starkman writes for Inside Counsel on the benefits and pitfalls to employers of smart phones and new technologies

Judge orders former Atlanta Falcons players to seek Georgia workers' comp benefits

LGBT Workers Face Rampant Discrimination, Higher Taxes and Receive Fewer Workplace Benefits

Another awful week of Americans seeking state and federal job benefits: 2.25 million file new claims

Denial of correction officer's performance of duty retirement benefits annulled due to factual errors

In the wake of school shooting, Connecticut legislator seeks to expand workers' comp benefits for first responders

Michigan Employee Benefits Law Conference: Regulation of Benefit Plans: The Most Consequential Subject to Which No One Pays Enough Attention

Kentucky Workers Compensation Law Does Not Require A Permanent Impairment To Support An Award of Future Medical Benefits

REMINDER: Severance Pay Offset to Unemployment Compensation Benefits Takes Effect January 1, 2012 In Pennsylvania

New York City transit union wins line-of-duty death benefits for workers killed by COVID-19

Coronavirus Update 1-25-2021: President Biden calls for unemployment benefits to employees who refuse to work because of Covid

Court Annuls NYS Comptroller's Decision to Deny Police Lieutenant's Accidental Disability Retirement Benefits

Court Overturned Comptroller's Decision Denying A Retired Deputy Sheriff Duty Disability Retirement Benefits

John Marshall's Ninth Annual Employee Benefits Symposium: The Changing Landscape of Executive Compensation Regulation and Reporting

Court Granted Police Officer Accidental Disability Retirement Benefits After Injury Caused By Slip and Fall During the Winter

Sedgwick Claims Management Can Be Liable Under RICO For Fraudulent Deprivation of Workers Compensation Benefits, Sixth Circuit Rules

Double Kentucky Workers Compensation Benefits Recoverable Where Employment Ends Due to Previous Work-Related Injuries

Feuer on Questions of Justice and Law Raised When an Employee Benefits Plan Beneficiary Strangles His Grandmother, the Participant, to Death

Coronavirus Update 6–22–2020: Ohio ends unemployment benefits to employees who refuse to work (with some key exceptions)

Performance of Duty Disability Retirement Benefits Application Denied; Petitioner Suffered from Various Risk Factors Before Heart Attack.

Unemployment Compensation Case Update: Employees Who Accept Voluntary Early Retirement Incentive Offers Are Eligible for Benefits

Land Based Commuter Seamen Are Entitled To Maintenance And Cure And Those Benefits May Not Be Denied Because of Receipt of Social Security Disability Payments

Supreme Court Hears Oral Argument in First Same-Sex Marriage Case; Outcome Could Significantly Impact Employee Benefits Law

Floridas 2019 Legislative Session Yields Bills Related to Vaping in the Workplace and Unemployment Benefits for Domestic Violence Victims

EEOC Actions Resulted in Record Amount of Monetary Benefits Awarded to Private Sector Claimants, According to FY 2012 Performance and Accountability Report

If I'm on workers' compensation disability benefits in Georgia, how are my taxes figured?

Abortion travel benefits don’t discriminate against non-abortion-seeking pregnant workers

Ninth Circuit: Pay In Lieu of Benefits Is Included in the Regular Rate of Pay

USCIS Launches Online Immigration Benefits System, USCIS ELIS

If I'm receiving workers' comp benefits in Georgia, can I still work?

If I'm an injured worker on workers' compensation disability benefits, when will my payments run out?

Obama to Sign Tax Bill Temporarily Extending Unemployment Benefits, Payroll Tax Cuts

Recovery Workers Compensation Benefits Not Barred by Recovery of Damages From Third-Party In Personal Injury Suit

If I'm getting medical benefits from workers' comp, do I need an attorney?

6th Circuit: ERISA Remedy for Wrongful Denial of Benefits May Include Disgorgement Remedy Under Section 502(a)(3)

6th Cir: ERISA Remedy for Wrongful Denial of Benefits May Include Disgorgement Remedy under Section 502(a)(3)

Following Federal Government’s Extension of Overtime Benefits To Home Health Care Aides, California Signs Law Granting Overtime Pay To Domestic Workers

Injured Workers At Social Security Retirement Age Limited to Two Years Kentucky Workers Compensation Benefits, Kentucky Supreme Court Rules

Schreiber v. Philips Display Components Co., No. 07-2440 (6th Cir. Sept. 2, 2009); In re Unisys Corp. Retiree Medical Benefits ERISA Litig., No. 07-3369 (3d Cir. Sept. 2, 2009)

Have an Employment Law question?