Total Compensation and Regulations in the US


Working on the creation of total compensation plans, the leaders of companies and firms need to take into account a variety of factors that may affect compensation for their particular organizations. Such regulations differ in accordance with such aspects as the sizes of organizations, their specializations, and the markets in which they perform. The organization in question is a federal contractor that operates in the biotech industry and employs two hundred workers. The purpose of this paper is to overview the regulations that will affect total compensation in the given organization and to compare them with those in place for other types of establishments.

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One of the major regulations that will affect the total compensation for the aforementioned organization is The McNamara–O’Hara Service Contract Act (SCA). This act became effective in 1965, and it covers all the individuals who work for federal contractors. According to this act, the workers who perform services on contracts that exceed $2500 are to be paid the wages that prevail in their localities (The United States Department of Labor, n.d.). In addition, such workers are also eligible for fringe benefits. Further, for the contracts that are less than or equal to $2500, employees are to be compensated in accordance with the Fair Labor Standards Act. Section 6 a (1) of this acts says that such workers are to be paid federal minimum wages (The United States Department of Labor, n.d.).

Compared to the employees who work in state organizations and whose payments are regulated by local statutes and laws for private sector employers, federal government workers are compensated based on federal law. The latter includes the Federal Employee’s Compensation Act (FECA) that allows the continuous retrieval of benefits if a worker is injured or killed while performing their professional duties (“The Federal Employment Compensation Act,” 2018). Also, when it comes to the similarities between the federal and private-sector workers’ compensation regulations, it can be noted that both groups of employees are covered by regulations, ensuring their equitable treatment by their employers.

Specifically, state and local employers are to comply with the Fair Labor Standards Act (FLSA), Equal Pay Act (EPA), and the Social Security Act (SSA). The first regulation ensures that none of the workers are discriminated against in their organizations; the second oversees that men and women doing the same jobs are paid equally, and the third one grants the so-called old-age benefits (Social Security Administration, n.d.; The United States Department of Labor, 2011).

At the same time, federal government employees are compensated in accordance with Executive Order 11246 that also prevents workplace discrimination and ensures equal opportunity and pay. This is one of the major differences in regard to the applied regulations. Based on the organization size, all employers who hire more than 50 workers are to comply with the Family Medical Leave Act (FMLA). According to this act, the companies are to provide up to twelve weeks of leaves to their workers with the protection of their jobs and without letting the leaves affect their compensation. This act applies to all organizations.

Moreover, the organization under discussion operates in the biotech industry that is known for the use of stock-based compensations. Due to this reason, the organizations in this industry often face regulatory issues and are forced to design their compensation plans and systems in compliance with this specificity. This aspect represents a significant difference between the ways compensation is viewed in relation to the industry in which an organization performs. Practically, investment expectations or prospects, tax regulations, and accounting charges are some of the factors that may affect stock-based compensations in the biotech industry (“Stock-based compensation in the biotech industry,” 2018).

Also, most of the companies in this sphere use a variety of special compensation tools that allow them to perform at a high level without being affected by the aforementioned factors. The major distinction from the companies that operate in other industries and markets is that they do not rely on stock-based compensation and are not publically traded. In such cases, different compensation structures and regulations are applied. However, of course, there are companies that have been through their initial public offering and also use stock-based compensation plans.

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In conclusion, the specific characteristics of the organization under discussions such as its size, federal contractor status, and the industry in which it operates shape the set of total compensation regulations with which it should comply. Apart from these specific regulations, the aforementioned organization also has to follow the rules established by laws that apply to private-sector employers as well.

The two aspects comprise the similarities and differences between the organization under discussion and the other companies that perform in different markets. To be more precise, in terms of equal opportunities and fair treatment, Executive Order 11246 accomplishes what the FLSA, EPA, and SSA do for the employees performing the state and local jobs. Also, when it comes to the size of compensation, the private-sector and local employers follow their state regulations while the federal contractors comply with federal compensation laws.


The Federal Employment Compensation Act. (2018). Web.

Social Security Administration. (n.d.). The Social Security Act of 1935. Web.

Stock-based compensation in the biotech industry. (2018). Web.

The United States Department of Labor. (n.d.). Wage and hour division (WHD). Web.

The United States Department of Labor. (2011). The Fair Labor Standards Act of 1938, as amended. Web.

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"Total Compensation and Regulations in the US." StudyCorgi, 27 May 2021,

1. StudyCorgi. "Total Compensation and Regulations in the US." May 27, 2021.


StudyCorgi. "Total Compensation and Regulations in the US." May 27, 2021.


StudyCorgi. 2021. "Total Compensation and Regulations in the US." May 27, 2021.


StudyCorgi. (2021) 'Total Compensation and Regulations in the US'. 27 May.

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