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government contractors employee benefits


navigate the complex world of fringe benefits, remove pain points, and attract top talent

SBS understands the importance of designing, implementing, and administrating compliant, cost-effective fringe benefit plans for government contractors


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Designing innovative health and welfare benefit packages provides the best possible options for employees while staying within the total fringe rate obligation.




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Staying compliant is critical to the success of your contract and business. Audits, tracking and financial reporting to federal agencies is not something most businesses want to manage without support.


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Strong benefit packages attract top talent and reduce the employer’s tax burden, compared to providing employees direct cash payments.

the four things you have to get right

There is plenty of research and support when it comes to winning a government contract. But, what happens once you've secured the contract and need to staff for the actual work?


Here are four key areas to ensure you have covered:

Meet health and wellness (h&W) Requirements

Employers subject to the Service Contract Act (SCA) must meet the wage and benefit provisions of the contract’s Wage Determination (WD).


The WD specifies the labor classifications, associated minimum hourly wage rate, the minimum hourly Health & Welfare (H&W) fringe rate, and the vacation and holiday benefits covered service employees are entitled to.

It's dense information and can change with new regulations. Staying on top of the rules can be difficult for many companies that aren't used to the landscape or don't have an experienced H&W benefits partner on their side.

implement fringe benefits that attract talent

Federal contractors are subject to multiple regulations regarding hourly and contract employees when it comes to fringe benefits.  

Implementing a cost-effective fringe benefits plan helps attract and retain top talent while also reducing tax burden to the business.

While many government contractors initially consider offering cash in lieu benefits, this can create adverse issues for the company. Those include payroll tax implications for both the company and the employee and an increase in healthcare premiums as only those in need of more care select to be covered.

have a robust admin system in place

When it comes to hiring and fringe benefits, there are multiple Acts and regulations you must follow to stay compliant (like ACA and SCA). Ensuring you have a robust administration system is vital to maintaining your contract in good standing.

Government contractors who have a regulatory obligation to provide fringe benefits to their employees often find themselves unnecessarily burdened with the additional management and financial reporting requirements.


This can be painful and cumbersome for many government contractors, so working with a trusted partner to manage the administrative side of benefits management is often a preferred method.

always be ready for audits

Audits are a way of life in government contracts. Implementing a fringe benefits plan that stays within the guidelines and maintaining accurate reporting has to be a top priority for leaders, as an audit can occur at any time.

Audits can also happen with little to no notice and at any time in the contract cycle, with significant penalties for noncompliance. 


Working with a trusted Third-Party Administrator (TPA) who can provide the administrative and compliance support needed to stay ready for audits, while delivering fringe benefits that attract talent, can ease the burden and free your company to focus on growth and new contracts.

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Our custom approach to managing fringe benefits helps government contractors lower overhead and reduce their compliance burden, all while improving contract profitability.


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