What is the purpose of the Federal Insurance Contributions Act?

The Federal Insurance Contributions Act (FICA) primarily serves to mandate the collection of taxes to fund the Social Security and Medicare programs in the United States. This federal law requires employers and employees to contribute a portion of their earnings to these programs, which provide financial support and healthcare assistance to eligible individuals, particularly retirees and those who are disabled. By ensuring a steady pool of funds through payroll taxes, FICA supports the social safety net that helps maintain the economic stability of millions of Americans.

The other choices presented do not align with the primary function of FICA. Regulating employee wages and setting minimum wage standards pertain to labor laws focused on wage protection rather than social insurance programs. Providing benefits to the unemployed relates to unemployment insurance, which is separate from the contributions required under FICA, focusing instead on income support during periods of joblessness.