What Should Be In A Government Employee Compensation Package In The United States?
The American government specifies more than just salary requirements in their government employee compensation standards. While some of this varies on a federal and state level, there are certain compensation benefits that you should always consider to remain compliant and attractive to potential employees.
Additional required federal government compensation benefits include:
- Health benefits that cover medical, dental, and vision
- Paid leave
- Group life insurance
- The Thrift Savings Plan
| “The government may regulate compensation for their employees, but it’s up to employers to ensure these standards are upheld.” – Larry Beers, Director of Consulting, JER HR |
Who is Considered a State-Owned Enterprise (SOE)?
A State-Owned Enterprise (SOE) refers to an organization that is owned or controlled by the government, either at the federal or state level. Examples of such organizations include the United States Postal Service, Amtrak, and certain public utilities.
If you’re an employer at an SOE, upholding government employee compensation standards is crucial. Not only to avoid repercussions, but also because SOEs have a responsibility to ensure that taxpayer funds are used judiciously.
SOEs are subject to government-mandated HR audits to confirm regulations are followed. The audit process involves a thorough examination of the organization’s financial records, compensation packages, and other relevant documentation. If discrepancies or non-compliance issues are found, the SOE may face penalties or be required to restructure.
What is the Federal Employee Compensation Act (FECA)?
The Federal Employee Compensation Act (FECA) is a U.S. federal law that highlights the compensation that federal-run SOE employees are entitled to if they suffer a work-related injury or illness. Alongside other required benefits, SOE employers must include the following in their workers compensation packages to ensure FECA compliance.
Medical Benefits
Under FECA, employers must ensure that injured employees receive full medical treatment for any work-related injuries. This includes covering the costs of hospital visits, surgeries, medications, and any necessary rehabilitation.
Disability Compensation
If an employee is unable to work due to a work-related injury or illness, FECA mandates that they receive compensation for their lost wages. Employers need to ensure that the amount provided is in line with the employee’s wage prior to the injury.
Vocational Rehabilitation
Employees who can’t return to work in their previous roles due to the severity of their injuries are entitled to vocational rehabilitation benefits. Employers must facilitate access to training or education that helps the employee transition to a new role.
Survivor Benefits
In the unlikely event of an employee’s death due to a work-related incident, FECA requires employers to give their survivors financial compensation. Employers must ensure that the deceased employee’s family members, such as spouses or children, receive the appropriate benefits in a timely manner.
What is The Thrift Savings Plan?
The Thrift Savings Plan (TSP) is a retirement savings and investment plan specifically designed for US federal employees. As an employer, it’s your responsibility to uphold the TSP by ensuring that contributions are correctly managed at your facility.
TSP includes:
- Traditional Contributions: pre-tax contributions that reduce how much of the employee’s income for the year is taxable.
- Roth Contributions: made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
- Agency/Service Automatic Contributions: federal agencies automatically contribute an amount equal to 1% of an employee’s salary, regardless of whether the employee contributes to the TSP.
- Agency/Service Matching Contributions: in addition to the automatic contributions, agencies match employee contributions up to a certain percentage, further enhancing their retirement savings.
- Investment Options: a variety of investment funds that allow employees to diversify their portfolios based on their risk tolerance and financial goals.
Government Compensation Must Adhere to Regulations
But Effective Compensation is Always Beneficial
How Does Federal & State Government Employee Compensation Differ?
State government employee compensation can differ from federal standards based on jurisdiction, job classification, and the specific regulations governing each sector. Businesses that may fall under targeted state regulations may include public transportation agencies, state universities, and state hospitals.
While there is some crossover in compensation standards, especially when federal funds are involved, state SOEs must adhere to their state’s specific guidelines and regulations.
However, you will most likely need to navigate a blend of both federal and state regulations as a state-owned business. Please do detailed research into your specific state’s requirements and which federal regulations are relevant to your organization.
| Learn More About How You Can Ensure Compensation Compliance |
What to Know About The Federal Employee Pay Raise of 2024
President Biden officially announced plans for a federal pay raise effective January 1, 2024. Civilian employees on the General Schedule are expected to receive an average pay raise of 5.2%. This percentage is a combination of a 4.7% across-the-board raise and a 0.5% average locality pay adjustment.
SOE employers must keep this impending change front of mind and ensure that their payroll systems are updated to reflect this adjustment. The raise will automatically take effect in 2024 unless Congress enacts a different pay scheme before January.
It’s also worth noting that 5.2% is an average figure. Some federal employees might receive slightly more or less than the 5.2% increase, depending on their locality pay area. Please seek more specific requirements to ensure your wage increases adhere to your locality.
Seamlessly Navigate Pay Compensation Requirements With Expert Guidance
With over 30 years of experience, JER HR offers a comprehensive and objective approach to government compensation. Our expertise ensures that your compensation plans are equitable and compliant with any government regulated standards.
We not only identify issues but also provide strategic solutions tailored to the unique demands of this sector. This way, you’ll have both the insights you need and actionable steps to follow with guidance as you remediate any detected issues.
Reach out to JER HR Group today and let us guide your compensation strategy to success.
What Should Be In A Government Employee Compensation Package In The United States?
The American government specifies more than just salary requirements in their government employee compensation standards. While some of this varies on a federal and state level, there are certain compensation benefits that you should always consider to remain compliant and attractive to potential employees.
Additional required federal government compensation benefits include:
- Health benefits that cover medical, dental, and vision
- Paid leave
- Group life insurance
- The Thrift Savings Plan
| “The government may regulate compensation for their employees, but it’s up to employers to ensure these standards are upheld.” – Larry Beers, Director of Consulting, JER HR |
Who is Considered a State-Owned Enterprise (SOE)?
A State-Owned Enterprise (SOE) refers to an organization that is owned or controlled by the government, either at the federal or state level. Examples of such organizations include the United States Postal Service, Amtrak, and certain public utilities.
If you’re an employer at an SOE, upholding government employee compensation standards is crucial. Not only to avoid repercussions, but also because SOEs have a responsibility to ensure that taxpayer funds are used judiciously.
SOEs are subject to government-mandated HR audits to confirm regulations are followed. The audit process involves a thorough examination of the organization’s financial records, compensation packages, and other relevant documentation. If discrepancies or non-compliance issues are found, the SOE may face penalties or be required to restructure.
What is the Federal Employee Compensation Act (FECA)?
The Federal Employee Compensation Act (FECA) is a U.S. federal law that highlights the compensation that federal-run SOE employees are entitled to if they suffer a work-related injury or illness. Alongside other required benefits, SOE employers must include the following in their workers compensation packages to ensure FECA compliance.
Medical Benefits
Under FECA, employers must ensure that injured employees receive full medical treatment for any work-related injuries. This includes covering the costs of hospital visits, surgeries, medications, and any necessary rehabilitation.
Disability Compensation
If an employee is unable to work due to a work-related injury or illness, FECA mandates that they receive compensation for their lost wages. Employers need to ensure that the amount provided is in line with the employee’s wage prior to the injury.
Vocational Rehabilitation
Employees who can’t return to work in their previous roles due to the severity of their injuries are entitled to vocational rehabilitation benefits. Employers must facilitate access to training or education that helps the employee transition to a new role.
Survivor Benefits
In the unlikely event of an employee’s death due to a work-related incident, FECA requires employers to give their survivors financial compensation. Employers must ensure that the deceased employee’s family members, such as spouses or children, receive the appropriate benefits in a timely manner.
What is The Thrift Savings Plan?
The Thrift Savings Plan (TSP) is a retirement savings and investment plan specifically designed for US federal employees. As an employer, it’s your responsibility to uphold the TSP by ensuring that contributions are correctly managed at your facility.
TSP includes:
- Traditional Contributions: pre-tax contributions that reduce how much of the employee’s income for the year is taxable.
- Roth Contributions: made with after-tax dollars, but qualified withdrawals in retirement are tax-free.
- Agency/Service Automatic Contributions: federal agencies automatically contribute an amount equal to 1% of an employee’s salary, regardless of whether the employee contributes to the TSP.
- Agency/Service Matching Contributions: in addition to the automatic contributions, agencies match employee contributions up to a certain percentage, further enhancing their retirement savings.
- Investment Options: a variety of investment funds that allow employees to diversify their portfolios based on their risk tolerance and financial goals.
Government Compensation Must Adhere to Regulations
But Effective Compensation is Always Beneficial
How Does Federal & State Government Employee Compensation Differ?
State government employee compensation can differ from federal standards based on jurisdiction, job classification, and the specific regulations governing each sector. Businesses that may fall under targeted state regulations may include public transportation agencies, state universities, and state hospitals.
While there is some crossover in compensation standards, especially when federal funds are involved, state SOEs must adhere to their state’s specific guidelines and regulations.
However, you will most likely need to navigate a blend of both federal and state regulations as a state-owned business. Please do detailed research into your specific state’s requirements and which federal regulations are relevant to your organization.
| Learn More About How You Can Ensure Compensation Compliance |
What to Know About The Federal Employee Pay Raise of 2024
President Biden officially announced plans for a federal pay raise effective January 1, 2024. Civilian employees on the General Schedule are expected to receive an average pay raise of 5.2%. This percentage is a combination of a 4.7% across-the-board raise and a 0.5% average locality pay adjustment.
SOE employers must keep this impending change front of mind and ensure that their payroll systems are updated to reflect this adjustment. The raise will automatically take effect in 2024 unless Congress enacts a different pay scheme before January.
It’s also worth noting that 5.2% is an average figure. Some federal employees might receive slightly more or less than the 5.2% increase, depending on their locality pay area. Please seek more specific requirements to ensure your wage increases adhere to your locality.
Seamlessly Navigate Pay Compensation Requirements With Expert Guidance
With over 30 years of experience, JER HR offers a comprehensive and objective approach to government compensation. Our expertise ensures that your compensation plans are equitable and compliant with any government regulated standards.
We not only identify issues but also provide strategic solutions tailored to the unique demands of this sector. This way, you’ll have both the insights you need and actionable steps to follow with guidance as you remediate any detected issues.
Reach out to JER HR Group today and let us guide your compensation strategy to success.
