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:
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 components — a basic hourly rate and a bona fide fringe benefits rate. The total of both the basic hourly rate and any fringe benefits rate listed in a wage determination of the contract comprise the DBA prevailing wage requirement for a given classification. The Service Contract Act (SCA) and state prevailing wage rules are often structured the same (with some exceptions). For example, the DBA (and some states) allows a contractor to pay more in fringe benefits with a corresponding reduction in the basic hourly wage. If the wage determination in a contract included an hourly wage of $20 and a fringe rate of $10, the employer could choose to provide an hourly wage rate of $17 and a fringe rate of $13.
A contractor’s prevailing wage obligation under DBA, SCA or state laws may be met by any combination of cash wages and credible “bona fide” fringe benefits provided for a covered worker.
Common fringe benefits that can be considered bona fide include:
Pension/retirement plan Apprenticeship training Vacation
Holidays Sick leave
Supplemental Unemployment Benefits
Apprentice & Safety Training Benefits
Benefits that are not considered bona fide include:
Use of a company truck or other vehicle
Any statutory benefits, such as:
• Workers compensation
• Unemployment compensation
• Social security contributions
Some states may be more restrictive in the benefits that they allow.