As stated in the U.S. Department of Labor Prevailing Wage Resource book, “Annualization is a computational method used to determine the hourly rate of benefit plan contributions that are creditable towards a contractors’ prevailing wage fringe benefit obligation on covered projects.”
All Merit shop construction companies working on projects covered by the Davis-Bacon Act or state prevailing wage laws have to make decisions on how to satisfy the fringe benefit portion of the prevailing wage law.
In New York, the prevailing wage and fringe benefit rate must be paid on all public work hours. Contractors may satisfy the fringe benefit portion of the prevailing wage by either paying the prevailing benefit rate as additional cash wages, or by providing bona fide benefits that at least equal the rate.
The New York State legislature is poised to pass a comprehensive revision of the prevailing wage law, extending prevailing wage requirements to a far wider scope of work than ever before. An interesting article covering this can be found in the Albany Times Union here.
Competition for good workers has never been higher. What better way to secure your workforce during a work slowdown or seasonal shut down than to provide them with cash benefits so that they can enjoy their time-off rather than look for work elsewhere.