Prevailing Wage Fringe Benefit Savings Calculator
When you work with DirectAdvisors, we will help you find savings opportunities that meet prevailing wage requirements for government contractors while offering valuable retirement, health and welfare fringe benefits to your employees.
Enter your information to see how much your company may be able to save:
How to Calculate Annualization
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.”
To compute the contractor’s allowable hourly credit towards meeting the prevailing wage obligation for covered workers on a prevailing wage project, the total annual cost of the fringe benefits must be divided by the total number of hours individual employees work in a year (including work on both covered (public) and non-covered (private) work). The annualization computation must be done for each individual worker.
If the hourly cost of benefits is less than the prevailing wage benefit rate, the difference must be paid to the employee as additional wages.
Exemptions from Annualization:
Paying the prevailing fringe benefit rate as cash wages is always an alternative to providing actual fringe benefits, and those payments are never subject to annualization. This applies under the DBA, SCA and each state examined.
The DBA, SCA and some states exempt annualization for contributions made to a defined contribution retirement plan that provides for immediate participation and essentially immediate vesting (no more than 500 hours).
Under such plans, contributions are irrevocably made by the contractor to the employees plan account. Pursuant to the exemption, the contractor may take credit for the full amount of the contribution even if the contractor makes no contributions to the plan during periods of private work as long as those contributions are made at least quarterly to the plan or an irrevocable escrow account.
How we can help:
DirectAdvisors, established in 2001 and located in Albany, New York 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, Service Contract Act and state prevailing wage regulations. Our clients are located throughout the United States and range in size from 10 to 3,000 employees.
This year our construction company clients will contribute tens of millions of dollars of prevailing wage fringe benefit contributions to The DirectAdvisors Trust (health & welfare benefits) and retirement plans managed by our team.
Our solutions are free from any conflict of interest as we do not sell any financial or insurance products. We work with existing agents, brokers and insurance companies.