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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
Satisfied Customers: 118776
Experience:  20+ Years of Employment Law Experience
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One of U.S. Government contract we are currently pursuing

Customer Question

One of U.S. Government contract we are currently pursuing requires us to provide our employees life insurance, long/short-term disabilities, payment for bereavement, 401(k), etc.
If we won this contract and hire new employees just to work for this contract, are we allowed to provide, let’s say, life insurance for these employees but not for other employees who are not involved to this contract? Or can we do “matching” contribution of 401(k) for these employees who work for the new contract but use “profit sharing” contribution for other employees who are not working for this new contract.
Are we allowed to provide different benefits to our employees based on what contract they are working for? Or if we do so, is it a violation of labor law?
Please let me know. Thank you.
Submitted: 1 year ago.
Category: Employment Law
Expert:  Law Educator, Esq. replied 1 year ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

Generally employers have discretion when structuring their benefits plans and are able to make distinctions among employee populations regarding access to and the level of benefits offered. Plans may differ among employees only on “bona fide employment-based classifications” consistent with the employer’s usual business practice. So, you can hire on this new group of employees as a class of employee who receives these benefits and not provide the same benefits to employees in some other classification working for someone else.