Davis-Bacon (Federal) / Prevailing Wage (State) Solutions

construction

Davis-Bacon Act Overview

Enacted in 1931, and amended in 1935 and 1964, the Davis-Bacon Act is federal law that governs the minimum wage rate to be paid to laborers and mechanics employed on federal public works projects.

 

How Richman Knoll Can Help You

 

The Problem – Contractors will often pay some or all of the fringe benefit portion of the prevailing wage as cash wages rather than as benefits because they feel it is the easiest way to comply with the regulation.

 

The Most Costly Method - By paying the fringe benefit as wages, it is subject to payroll costs such as FICA, FUTA, State unemployment taxes, Workers compensation and general liability premiums.

 

The Solution – Why pay unnecessary payroll costs? Allocating the entire fringe benefit portion towards a “bona fide fringe” benefit fund plan provides valuable benefits for your employees and eliminates the payroll tax burden.

 

Be more competitive on bids.

Keep a larger share of the profits you are earning.

 

Let’s compare

Fringe Paid as Wages Vs. Fringe Paid as Benefits

 

Fringe Paid in Cash

Fringe Paid in Benefits

 Base Wages

$34.52

$34.52 per
hour worked

 Fringe

$10.00

 Total Wage

$44.52

 Payroll Burden

$11.13 per hour worked

$8.63 per
hour worked

Assumed 25% FICA, FUTA, SUTA, WC
 Fringe Paid as H&W Benefit

$0.00

$10.00 per
hour worked

Our single source solution provides your employees
with optimal benefits packages, while you save
administration time and allowing more money pass
through your bottom line.
  Total Bid Cost Per Hour Worked

$55.65

$53.15

 

  Savings Per Hour Per Employee

$0.00

$2.50

 Annual Savings Per Employee

$0.00

SAVE $5,200!

Annual Savings

2080 hours x 25 employees

x $2.50/hour =

  $130,000.00