SPHR Human Resources

Category - Rewards

The Federal Insurance Contributions Act requires employers to do which of the following?
  1. Contribute to a defined benefit plan
  2. Contribute to a deferred compensation plan
  3. Withhold Social Security tax from pay
  4. Provide health insurance for all employees
Explanation
Answer - C - FICA requires employers to pay Social Security and Medicare for employees and to withhold an equal amount from employee paychecks.

Key Takeaway: There is no federal law requiring employers to provide pension plans (defined benefit plan or deferred compensation plan). No federal law requires employers to provide health insurance to its employees.
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