Working on government contracts can provide a healthy stream of revenue. Still, businesses must ensure they can deliver on the contracts they are awarded with support from qualified and productive staff.
Providing a comprehensive federal contractor benefits package is a powerful way to attract and retain top talent, improving a business’s reputation and making it more competitive when bidding on contracts. In addition, offering employees benefits that increase their job satisfaction and well-being shows them they are valued parts of the team.
However, benefits for federal contractors are subject to some compliance standards that do not apply to other types of work. How can businesses ensure their benefits packages are compliant for government contractors?
Here is a look at some of the regulations that may apply, along with some tips for ensuring compliance.
The Service Contract Act (SCA)
Section 4c of the Service Contract Act obligates service contractors to comply with the current prevailing wage rates and fringe benefits in their area or the rates listed in a collective bargaining agreement with a predecessor contractor where applicable.
It applies to contracts and subcontracts that provide services such as security or maintenance to the federal government. The SCA also requires contractors and subcontractors to give service employees certain welfare and health benefits, such as paid leave, retirement plans, health insurance, and life insurance.
The Davis-Bacon Act
The Davis-Bacon Act requires businesses working on federal contracts for constructing or repairing public buildings to pay employees wages and fringe benefits that compare to the prevailing wages in their geographical area.
The Department of Labor issues determinations listing the minimum wage and fringe benefits that apply to every trade and locality. The act also requires federal contractors to prove they comply with the DBA by supplying certified payroll records.
In addition, contractors and subcontractors performing work under the DBA must post the official “Employee Rights Under the Davis-Bacon Act” poster in a prominent location at the job site.
Health Insurance and the Affordable Care Act (ACA)
The Affordable Care Act specifies that businesses with 50 full-time or equivalent employees or more must offer their employees affordable health insurance; failing to do so can result in significant fines and penalties.
While those with fewer employees do not fall under this mandate, offering health insurance is highly recommended. The ACA applies not only to federal contractors but all businesses.
It also mandates specific components of the health insurance plan that must be provided, such as including essential health benefits, barring discrimination against participants based on pre-existing health conditions, and covering preventive care without cost sharing.
Equal Employment Opportunity (EEO) Regulations
Equal Employment Opportunity (EEO) regulations apply to federal contractors and other businesses with 15 employees or more. They prohibit discrimination based on age, disability, sex, religion, race, and veteran status.
The regulations also require employers to give workers with religious beliefs and disabilities reasonable accommodations as long as it does not cause them undue hardship. Therefore, government contractors must ensure their benefits practices and policies do not discriminate against any of these protected groups.
Paid Sick Leave Under EO 13706
Executive Order 13706 requires contractors to provide paid sick leave. It applies to federal procurement contracts for construction that fall under the DBA, concession contracts, service contracts that fall under the SCA, and some types of contracts related to federal property.
It stipulates that contractors must provide employees one hour of paid sick leave for every 30 hours they have worked on a covered federal contract or subcontract. They may use this leave for illnesses, injuries, preventive care, and family caregiving. It also specifies how this sick leave accrues and is carried over from year to year,
Tips for Ensuring Compliance
Many laws and regulations govern benefits packages for federal contractors, and staying compliant can be complicated. Here are some steps that can be taken to ensure compliance.
- Seek the wage determinations that apply to the contract and ensure they are followed.
- Review every current contract and subcontract to determine which requirements are in effect.
- Ensure employees with disabilities and religious beliefs are receiving reasonable accommodations.
- Keep careful records of benefits practices and policies.
- Offer all full-time employees and their dependents affordable health insurance coverage.
- Ensure current policies do not discriminate against protected groups.
- Work with federal contractor benefits consultants to ensure full compliance.
Learn More About Federal Contractor Benefits Compliance from the Experienced Employee Benefits Consultants
Offering attractive benefits and compensation is not just a valuable recruitment and retention tool, but it is also essential for remaining legally compliant. This can be a very challenging aspect of business, and many government contractors enlist the services of benefits consultants to help them develop a competitive and compliant benefits package.
If you are interested in learning more about federal contractor benefits, reach out to experienced benefits consultants at Business Benefits Group (BBG) to request a consultation.