Federal pay and benefits have come under increasing scrutiny. But just what are the basics of working for Uncle Sam? We spend the week examining what is provided to federal workers.
Basic pay is only one way a federal job puts money in an employee’s pocket. The government is turning more and more to other types of financial incentives in its bid to attract and keep good employees.
The biggest set of incentives is what the government calls the 3Rs—recruitment, retention and relocation incentive payments. In 2009, agencies paid out about 39,000 such payments, worth a total of more than $280 million. Most are paid in occupations such as health care, engineering, security, and information technology.
Agencies also may give employees money to be used toward paying off their student loans, up to $10,000 per year and $60,000 lifetime. Agencies made more than 8,500 such payments in 2009, worth $62 million. Occupations most commonly receiving student loan reimbursements include attorney, criminal investigator, intelligence, contract specialist, management/program analyst and nurse.
Another commonly used subsidy helps reimburse employees for their commuting costs if they use public transit or van pools. Most federal employees in the immediate Washington, D.C. area are eligible to receive up to $230 a month, in the form of passes or vouchers such as Metrochek. Many employees outside the capital region also are eligible, or may pay for their transit or vanpool expenses from pre-tax money, up to the same limit.
The government also has authority to pay for some or all of expenses such as:
·Obtaining professional credentials such as accreditation, licenses and certifications.
·Paying professional liability insurance to protect against being held personally liable for job-related decisions.
·Getting an academic degree, so long as that degree meets an agency training need.
·Some child care costs, for lower-income employees.
There are numerous forms of salary add-ons, including higher pay for working on Sunday or at night, in hazardous situations, or on overseas assignments. In addition, many federal employees are eligible for overtime pay, including in some occupations that in the private sector would not qualify for it.
The government meanwhile provides several tax breaks that keep money in employees’ pockets. For example, investments in the Thrift Savings Plan, the government’s 401(k)-style retirement program, are tax-free, effectively lowering the cost of investing.
Also, most employees pay their health insurance and vision and dental insurance premiums with pre-tax money—what the government calls “premium conversion.” In addition, employees can set aside up to $5,000 of pre-tax money to be used toward certain health-care related expenses not covered by insurance—such as copayments and deductibles—and up to another $5,000 to pay for dependent care expenses.
Depending on expenses and tax brackets, these can yield tax savings of thousands of dollars a year.
And while it’s not a cash benefit, the government allows employees to keep the frequent traveler credits they earn while on official travel, which has value in the form of trip discounts and upgrades.’