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Employee compensation that is provided in a form other than wages or salaries is commonly referred to as “employee benefits.” The law generally does not require employers to provide benefits to their employees; however, many employers choose to provide some benefits in addition to wages. These benefits may include: health insurance, retirement savings, vacation pay, reimbursed expenses, company-sponsored trips, stock options, compensation for job-related injuries, etc.
While employers are not necessarily required to provide these benefits, employers may not create or operate benefit plans that violate the law. For example, employers may not administer employee benefits in a way that discriminates against certain groups of individuals who are protected by state and federal anti-discrimination laws, or in a way that is inconsistent with contracts or other agreements that have been made with employees. Courts in some states have held that employee handbook provisions setting forth employee benefits may create enforceable contracts that must be honored by the employer. Additionally, employers cannot retaliate against employees who attempt to exercise their rights to available benefits.
The Employee Retirement Income Security Act of 1974 (ERISA) governs certain types of employee benefits. ERISA is a federal law that establishes rules that must be followed by private companies when they provide employees with covered employee benefits, such as retirement plans, which include pensions and 401(k)’s, and welfare plans, including health insurance.
ERISA does not require companies to provide these benefit plans, but if a company chooses to provide a plan, ERISA establishes rules employers must follow. For example, it requires companies to provide employees with certain information about their plans; it sets minimum standards to determine who may participate in a plan and what benefits must be paid; it places a duty on companies to manage benefit plans in the best interests of their employees; and it guarantees payment of certain minimum benefits to employees if a company’s plan is terminated.
ERISA allows employees to bring civil lawsuits to enforce their rights under employee benefit plans. Examples of potential violations are:
If you are a participant or a beneficiary of an employee benefit plan, you may be able to sue to obtain or recover benefits, clarify your rights to future benefits, obtain access to plan documents that you have requested in writing, or stop your employer from violating the terms of the plan.