How do mandatory benefits differ from voluntary benefits?

Mandatory benefits are legally required benefits that employers must provide to their employees, as dictated by federal, state, or local laws. These typically include benefits such as Social Security, unemployment insurance, workers’ compensation, and family and medical leave, among others. Because these benefits are mandated by legislation, failing to provide them can result in legal penalties for employers.

In contrast, voluntary benefits are not required by law and can be offered at the employer’s discretion. These often include perks such as health insurance, retirement plans, and life insurance, which can enhance an employee's compensation package but are not legally mandated.

Understanding this distinction is important for comprehending the framework of employee benefits and ensuring compliance with legal obligations while also catering to the needs and preferences of employees.