4 Factors to Consider When Deciding how to Satisfy Fringe Benefit Requirements
There are a multitude of factors to consider when deciding what type of strategy to implement to satisfy the fringe benefit requirements of the prevailing wage laws. Some factors include:
1. The amount of your work that is subject to prevailing wage law:
• The more prevailing wage covered work you perform, the less effect of annualization
• The amount of money you can save in labor burden expenses and how that savings can translate to more successful bidding
• How much money will be available to fund benefits
2. Which regulations typically cover your work:
• DBA, SCA, state laws
• Benefit plans should be designed for compliance with the relevant laws
3. Demographics / Culture / Seasonality:
• How is the workforce organized?
• Worker tenure — frequent turnover vs. long term team
• Do employees work all year or is there a seasonal layoff?
• Do some employees work substantial amounts of prevailing wage work while others work less or none?
4. Existing benefit plan structure:
• Creative design may be able to complement what already is in place
• Employee cost sharing
Designing the most effective benefit program should incorporate a strategy designed around analysis of each contractor individually, based on a review of each of the categories identified above. Solutions for clients can range from sophisticated comprehensive plans to strategic use of narrowing defined options.
How we can help
DirectAdvisors, established in 2001 and located in Albany, New York provides bona fide benefit plan consulting and third party administrative services to merit shop (non-union) construction companies that are subject to the Davis-Bacon Act, Service Contract Act and state prevailing wage regulations. Our clients are located throughout the United States and range in size from 10 to 3,000 employees.
This year our construction company clients will contribute tens of millions of dollars of prevailing wage fringe benefit contributions to The DirectAdvisors Trust (health & welfare benefits) and retirement plans managed by our team.
Our solutions are free from any conflict of interest as we do not sell any financial or insurance products. We work with existing agents, brokers and insurance companies.