If you’re deciding what type of strategy to implement to satisfy the fringe benefit requirements of prevailing wage laws, there are a multitude of factors to consider. Some of them include:
1. The amount of your work subject to prevailing wage law:
- The more prevailing wage work you perform, the less effect of annualization.
- The amount of money you can save in labor burden expenses and how that savings translates to more successful bidding.
- How much money will be available to fund benefits.
2. Which regulations typically cover your work:
- Davis-Bacon Act, Service Contract Act, and applicable 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 cost effective benefit program should incorporate a strategy designed around analysis of each contractor and based on a review of each category above. Solutions can range from sophisticated, comprehensive plans to a strategic use of narrowing defined options.
How We Can Help
Direct Advisors, LLC, established in 2001 and located in the Albany, New York area, 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 and state prevailing wage regulations. Our clients are located throughout the United States.