When contractors choose to pay the fringe benefit requirement as additional cash wages they are increasing their cost for payroll tax, workers compensation premiums and possibly liability insurance premiums. These additional payroll related burdens have an enormous effect on bottom line profits.
This case study is based on a well-respected multi-generational merit shop company with a long standing dedicated workforce.
All fringe benefit plans fall into two categories, “funded” or “unfunded”. The best type is funded, obviously. Otherwise I wouldn’t be writing this post.
Virtually any type of job related training, including apprentice training and safety training are considered bona fide benefits and therefore can be used to help meet the fringe benefit obligation of the Davis-Bacon Act or state prevailing wage laws.
Supplemental Unemployment Benefit Plans (SUB) can be extremely beneficial for you and your employees.
We continually talk with construction companies about the advantages of shifting prevailing wage fringe benefits out of payroll and into bona fide benefit programs like the DirectAdvisors Trust. Although this often makes tremendous financial sense for construction companies and their employees, the transition can be difficult when employees are accustomed to having that money paid as wages.