Do I Have to Offer My Employees the Same Benefits Package?

Kim Solis | Aug 10, 2022 | minute read

do-i-have-to-offer-my-employees-the-same-benefits-packageEmployee benefits can be a complex subject for many businesses to understand. Is it possible for separate employee benefits packages to be offered to various groups? The simple answer is yes, but there are a few critical aspects employers need to consider when selecting whether to offer various employee benefits packages.

Employers legally must provide the following benefits:

  • Comply with the Government or other Federal Family and Medical Leave (FMLA).
  • Payment of state mandated and federal unemployment taxes, rendering benefits for unemployed workers.
  • Contribution to state required short-term disability programs in states where those programs exist is required.
  • Allow for jury duty, military service, and time off to vote.
  • Provide Workers’ Compensation coverage to all employees.
  • Withholding other Federal Insurance Contributions Act (FICA) taxes from employees’ paychecks.

There are no federal requirements requiring plans to offer all employees the same benefits package. However, some jurisdictions have rules governing certain benefits, such as paid sick time, that are applicable to each employee of an employer.

Why Consider Different Benefits Packages?

You could be interested in designing a tier system where various employees receive various advantages while establishing a benefits package. In fact, many organizations engage in this technique, which can inspire workers.

Free eBook: The Ultimate Guide to Employee Benefits Programs

How Are Various Benefits for Employees Possible?

To answer the question “Can, You Offer Employees Different Benefits?” you must first determine the qualifying classes within your organization.

A division of the workforce based on acceptable job-related criteria is known as an eligible class. When you provide employees with various perks, these classifications give companies legal defense against claims of discrimination.

For instance, offering certain perks to full-time workers may be allowed, but not to part-time workers. Once you’ve determined which classes are eligible, you can’t give insurance to certain class members while refusing it to others. For instance, it would be discriminatory and a very serious offense if you provided life insurance to all full-time employees but not those with disabilities.

Examples of Employee Classifications


Depending on their pay, the duration of their job, or other factors, employees may belong to one of several employment classifications. Due to laws protecting equal employment opportunities, firms are allowed to differentiate their benefits for different employee groups depending on these disparities. Companies must ensure that there is no discrimination in their benefits programs.

Based on the following criteria, employers may decide to provide various employee perks to various groups.

  • Union vs. non-union
  • Employees (participants) and beneficiaries
  • Current employees and former employees
  • Full-time and part-time
  • Employees in a waiting period for health benefits
  • Salaried, hourly, and or commission based
  • Employees in different regions or countries
  • Members of collective bargaining units

How Can Employers Prevent Discrimination in Benefits Offerings?

Health-based discrimination against “similarly situated individuals” is forbidden by HIPAA. Health status, medical condition, claims experience, receipt of medical care, medical history, genetic information, proof of insurability, and disability are a few of these considerations.

When addressing concerns about employee benefits packages, employers need to be aware of the distinctions between unfairness and discrimination.

Discrimination is the unfair or biased treatment of individuals, particularly on the grounds of age, race, religion, sexual orientation, gender, or handicap. Contrarily, unfairness refers to an absence of equity, which means that not everyone is treated equally.

Our Final Thought

According to the law, employers are permitted to provide employees with a variety of benefit plans if they can show that those plans are legitimately based on the individuals’ bona fide employment categories.

It is acceptable, for instance, to provide full-time employees with different benefits than part-time employees. If senior-level workers were “grandfathered in” under an earlier benefits plan, it is also acceptable to provide them with alternative benefits.

Government oversight of benefits like health insurance means that you are legally compelled to adhere to federal regulations before making any choices on the benefits that you will provide to your employees, consult with benefits or legal specialists. Make sure that no bias exists in the decisions you make.

Free eBook: The Ultimate Guide to Employee Benefits Programs

Leap | Carpenter | Kemps Insurance Agency Can Help 

Leap l Carpenter l Kemps Insurance agents and consultants have helped many businesses establish, plan, and implement successful risk management and insurance strategies. Contact us today for more information on the advantages of risk management consulting services or to schedule a consultation with a professional expert.


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About The Author

As the Employee Benefit’s Department Manager at Leap | Carpenter | Kemps Insurance Agency, I use my 20 years of insurance expertise and background in Human Resources Management to find the best policies for both business owners and their employees.

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