SALARY AND BENEFITS


As we've said, if you are a services company people are your biggest (only?) asset so it is important to consider the salary and benefits you offer.

SALARY

How much should I pay my employees? Obviously there is a huge range in what people get paid (even ones with very similar titles) so it is tough to say, but here are a couple places to start:

1) GSA rate calculator  

2) Department of Labor (DOL)

Regulations that affect your salary:  In the private sector you can offer anyone just about any salary and it is up to them to decide whether to take it, but in the government market there are some extra regulations:

Service Contract Act (SCA): There are certain positions that are "inherited" government positions (stuff government employees used to do), and if this applies, then the people have to be given at least DOL minimum wage and benefits

1) The RFP will say if this applies and it will tell you the labor rates you have to use.

2) If this applies you will need to break down any required supplemental payments on the paystubs so they can see that you are paying everything.

David-Bacon Act (DBA): Sets the minimum that people in certain trades have to be paid (pay and benefits).

1) The RFP will state if DBA applies

2) Note for skilled trades/construction: Rates depends on what the person is doing, not their title, so if they spend half the day doing electrical (which falls under DBA), and half mowing lawns (not under DBA) you will need to pay the correct DBA rates for the time doing electrical.

Overtime: Federal and State laws governs how OT is defined and compensated. Be sure you know what constitutes over time in your state(s).​​​ (Typically starts when you have worked over 40 hr in a week but can be different in certain states.

Reporting: You will need to submit a yearly report to DOL to prove that you are complying with the SCA. For the DBA, you need to submit certified payroll every month to DOL. None of the payroll providers will do this so you must be sure to do them internally.


BENEFITS

Benefits: Benefits can be expensive so a lot of employers go for the minimum but there are upsides to providing good benefits to employees:

  • Attract better employees than you’d be able to get by just offering a salary.
  • Both the employee and employer gain when benefits are offered through the employer.
  • Employees tend to prioritize benefits over salary;  for every dollar of benefits you provide you save an average of 10 dollars in salary.
  • If two bidders on an RFP are tied in an evaluation, the government may look at the benefits offered by each to break the tie.

Benchmarking the benefits you provide:  While you may want to give a bare minimum of benefits, make sure that you are providing each employee with the required benefits that US law and each contract require.

  • Salary.com: Start your search off by looking at Salary.com (government considers salary.com to be inflated by 15% on average) to benchmark benefits for different employees and be sure to ask the prospective employees what benefits they are expecting.
  • Benchmark: Look at your competitors' website to see what they list.

    Benefits to consider offering:

    • Healthcare (medical, dental, vision)
    • Retirement options
    • Life and supplemental insurance (e.g. ALFAC)
    • Short Term Disability (STD)
    • Education*
    • Commuting*
    • Meal and lodging plans*
    • Job trainer*

    *these benefits are often tax deductible when offered by your business


    Recommendations:

    • Integrity Financial (benefits designer)
    • Guardian
    • TIE