What is a Bona Fide Fringe Benefit

Merriam-Webster defines bona fide as:

  1. Made in good faith without fraud or deceit;
  2. Made with earnest intent: sincere 
  3. 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:

Health insurance

Dental insurance

Life insurance

Disability insurance

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



Cellular phone

Travel expenses

Any statutory benefits, such as:

• Workers compensation

• Unemployment compensation

• Social security contributions

Some states may be more restrictive in the benefits that they allow.