Win More Davis Bacon, State Prevailing Wage and Service Contract Act Projects
If you are a public works contractor on Federal and/or State funded projects, then you are familiar with Prevailing Wage Determinations, Labor Compliance and Certified Payroll. As you know, misunderstanding these important regulations can result in penalties and fines. What you may not be as clear on are the financial benefits and your rights regarding the payment of the fringe benefit dollars of the Prevailing Wage to your field workers. Did you know that as an Non-Union Contractor, you have sole discretion of how you pay the fringes? That’s right, fringes are deemed “Employer Payments” for the benefit of your employees. They are paid either on the paycheck or into Bona Fide Fringe Benefit Plans. Did you know that paying the fringes on the paycheck increases your labor costs and provides your Union competitors a significant advantage over you? The plan or plans you put in place will have an immediate financial improvement for your company. We are here to help you understand and implement plans that will improve the financial well being of your company.
Lower Payroll Burden = Lower Bids = More Winning Projects
Many contractors combine the base rate and fringe dollars of the prevailing wage and pay their field personnel this combined amount on their paychecks. They believe it is the simplest method or don’t know of a better way. The fact is, this method of paying field personnel is VERY expensive.
Let’s take a look at an example:
A contractor with a one year California State Prevailing Wage project using 15 Operating Engineers located in San Diego using the August 22, 2017 wage determination. This contractor has a workers compensation net rate premium of 15%.
This contractor would realize about $186,576 in total tax and insurance premium savings by getting the fringe off payroll! This contractor could have lowered its bid by $186,576 and still have made the same profit.
1. The contractor has a better chance of winning projects by lowering its labor costs!
2. The contractor earns greater profit on awarded projects by getting the fringe off payroll!
3. The contractor has more continuous or expanding work for the company and its employees!
Getting these fringe dollars off payroll and into “Bona Fide” benefit plans is the best method. The benefit plans are:
We specialize in Prevailing Wage Fringe Benefits.