The reason government contractors MUST offer benefits compensation to their workers
The Service Contract Act (SCA) applies to every contract entered by the United States. It ensures that contractors and subcontractors performing on Federal contracts observe minimum wage, safety and health standards, and that contractors maintain their records.
For benefits administration, government contractors should note that every service employee performing any portion of government contract work must be provided with fringe benefits. The enforcement of fringe benefits requires employers to pay a minimum of $4.27 per hour, or to provide a minimum value benefits package.