Introduction & History of SUB Plans

Introduction & History of SUB Plans

Introduction Supplemental Unemployment Benefit (SUB) plans provide compensation to employees in addition to state unemployment insurance during periods of layoff. SUB plans, when designed correctly, offer employers a way to provide employees with enhanced income...
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...
How a Contractor Can Save $1,200,000

Funded vs. Unfunded Prevailing Wage Bona Fide Benefit Plans

All fringe benefit plans fall into two categories, “funded” (29 C.F.R. §§ 5.26-5.27) or “unfunded” (29 C.F.R. § 5.28). Funded plans are those where the contractor’s fringe benefit contributions are made irrevocably (funds cannot revert back to the contractor for any...
What Qualifies as a Bona Fide Fringe Benefit

What Qualifies as a Bona Fide Fringe Benefit

What is a Bona Fide Fringe Benefit Merriam-Webster defines bona fide as: Made in good faith without fraud or deceit; Made with earnest intent: sincere  Neither specious or counterfeit: genuine.           The Davis Bacon Act (DBA) prevailing wage rate is made up of two...