Federal and state governments have far-reaching power over private industry, primarily through the employee benefits that businesses must provide. Start-up businesses must become familiar with these regulations in their respective states.
Government regulates retirement plans, health benefit coverages, unemployment insurance and workers’ compensation benefits.
Government regulation on unemployment insurance pays benefits to the unemployed. By regulating workers’ compensation benefits, states can control the amount an insurer pays, the kind of drug testing it requires and whether businesses with fewer employees are exempt from these laws. With the 1974 Employee Retirement Income Security Act (ERISA), the federal government establishes standards for retirement and health coverage that private businesses must offer.
In states like North Carolina, the government subjects new employers to a standard tax rate at first. Once it has determined their actual rate, the state’s Employment Security Commission notifies the business by letter of its liability to pay unemployment taxes.
Not only do federal and state regulations on benefits guarantee certain types of coverage, they also establish minimum reporting standards and disclosure requirements for businesses that must document their compliance.
An expansive program, ERISA regulates benefits given to a company’s current and discontinued employees. It also mandates compliance with the Newborns’ Act, the Health Insurance Portability and Accountability Act of 1996 and the Genetic Information Nondiscrimination Act of 2008, to name a few.