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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.

government contractors are required to provide benefits to employees

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.

The SCA’s impact on benefits administration:

  • Observing minimum wage means government contractors MUST provide employees with benefits package
  • Government Contractors are now subject to benefits related auditing, and therefore MUST keep comprehensive records of benefits payments.
  • Minimum wage rates and minimum fringe benefits are subject to both state and federal law.

Benefits packages help government contractors acquire human capital and keep contracts

Government contractors seeking top-notch job candidates and reduced compliance risks know the importance of comprehensive benefits packages. A good benefits package is a competitive advantage in seeking talent, and reduces the threat of penalties in the federal procurement audit process.

These advantages are tough to attain, and can put a heavy burden on small business contractors. Managing benefits packages, amending benefits to changing laws, and adequate record keeping are just some of the problems employers will face throughout this process.

The XcelHR Value

Outsourcing benefits administration can be a solution for contractors. A comprehensive benefits outsourcing service eliminates an employer’s need to research, enroll, and maintain the perfect benefits package. XcelHR will take on that obligation… so you get back to growing your business. Take advantage of these benefits:

  • Our Benefits Solutions: XcelHR offers Fortune 500-type benefits to keep an engaged, happy, and reliable workforce.
  • Shopping Around: Let us shop around for you, so you can choose the benefit plans that you desire without spending all the time looking for it.
  • Pick & Choose: For employers that like certain aspects of their current plan, feel free to keep it. We want you to have the plan that fits your needs.
  • Administration: We handle all benefits plan administration and documentation.
  • Expert Advice: XcelHR provides employers with access to experts in benefit administration who are there to support all of your benefits needs.
  • Compliance: Don’t worry about future audits, losing contracts due to non-compliance, or complying with all of the major agencies. We manage compliance, while you run your business.