Providing Service Contract Act (SCA) employees with benefits can reduce costs for contractors on bids and increase their competitiveness against peers, all while offering employees valued benefits. These benefits can give you a competitive edge in the recruitment and retention of employees. The SCA's connection to employee benefits is a crucial aspect of understanding the Service Contract Act itself.
A bona-fide fringe benefit is something that an employer provides to its employees to care for them and their families. SCA service employees are entitled to certain bona-fide benefits, the most common being health insurance, disability insurance, retirement plans, vision and dental coverage, and life insurance.
Fringe benefits occur when an employer uses the health and welfare fringe rate to provide a benefit for their employees. For instance, the 2023 Service Contract Act fringe rate was announced in July 2023 at 4.98 or $4.57 per hour. Employers can offer employees fringe benefits in lieu of a cash payment.
By leveraging the health and welfare fringe rate to administer these benefits, employers can ensure employees feel valued and appreciated for their hard work. Higher employee motivation and satisfaction levels often lead to increased productivity, improved employee retention, and numerous other business advantages. When working with the federal government, it is essential to understand these requirements and have a proper plan to comply effectively.
When working with the federal government, it is essential that you understand these requirements and have a proper plan in place. Try our cost savings calculator to find the potential for tax and payroll savings available to you.
Effective July 2, 2024, the Department of Labor announced the 2024 rate for Service Contract Act prevailing health and welfare benefits through All Agency Memorandum 246. Please find the following...
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