Public Contractors’ Biggest Threat: Annualization! – How to Calculate Annualization and Make it Work for You!

Public Contractors’ Biggest Threat: Annualization! – How to Calculate Annualization and Make it Work for You!

If you are a Public Works contractor and offer a bona fide prevailing wage plan, you are likely familiar with the concept of annualization. The U.S. Department of Labor prevailing wage resource book refers to annualization as: “The computational method that is used to calculate the hourly rate of benefit plan contributions that are creditable to a contractor’s prevailing wage fringe benefit obligation on covered projects.”

Public Contractors’ Biggest Threat: Annualization! – How to Calculate Annualization and Make it Work for You!

Maximizing Savings in a Prevailing Wage Trust Plan

By paying prevailing wage fringe benefit dollars into a bona fide benefit plan, those dollars are not subjected to labor burden costs, such as FICA, unemployment taxes, workers compensation and general liability premiums.

Top 10 Things Construction Companies Can Do to Be More Competitive

Top 10 Things Construction Companies Can Do to Be More Competitive

Construction executives are fabulous at what they do best—construction. However, they know their limitations and need a great team around them. Here are the top 10 things your company can do to retain the top-notch team you already have, be more competitive, and ultimately win more bids:

Competitive Advantage with Prevailing Wage Bona Fide Benefit Plans

Competitive Advantage with Prevailing Wage Bona Fide Benefit Plans

I have previously written on a contractor’s potential tax savings when utilizing a bona fide benefit plan to satisfy the requirements of the prevailing wage law.  However, there are other ancillary advantages that can provide a competitive advantage for...
How a Contractor Can Save $1,200,000

How a Contractor Can Save $1,200,000

A contractor can choose between providing the prevailing fringe benefit rate as additional cash wages or as bona fide benefits. The cost of paying the fringe rate as cash wages can be expensive since wages are subject to payroll taxes and payroll-based insurance premiums. In most circumstances, this includes FICA, unemployment taxes, workers compensation premiums, and liability insurance premiums. These costs are typically referred to as “labor burden” and can range between 15%–40% of payroll (depending on rates paid for workers compensation and liability insurance).

Annualization of fringe Benefits – How to calculate with examples

Annualization of fringe Benefits – How to calculate with examples

Annualization is one of the most commonly misunderstood concepts in the Davis Bacon Act (DBA), Service Contract Act (SCA) and state laws. However, knowledge about how annualization works, and how it affects contractors’ financial obligations for bona fide benefit...