What they are, how they work and how to manage them better.
What are fringe benefits?
Several laws, including Davis-Bacon Act (DBA) and the Davis-Bacon and Related Act (DBRA) require contractors to pay prevailing wages on qualifying government-funded projects. Prevailing wages are a combination of an hourly rate plus an hourly fringe benefit rate that can be paid in cash OR qualifying benefits. When you add these two amounts up, you arrive at the actual hourly cost for each employee on the jobsite.
Prevailing wages and fringe benefit amounts are set by U.S. Department of Labor and published online. In some instances, state prevailing wage rates also apply. Fringe benefits and prevailing wage rates change based on the type of work being done and the skill level of the worker. Adding to the confusion, a single worker may be paid multiple rates each day if they switch roles throughout their shift.
How do fringe benefits work?Fringe benefits can be paid in a number of ways, but not everything can actually be counted as a fringe payment. For instance, an employer cannot take credit for any benefit required by federal, state or local law. This means workers’ compensation, unemployment compensation and social security contributions are not considered a fringe benefit. Contractors and subcontractors working on qualifying projects must follow strict rules for correctly determining the prevailing wage and fringe benefit amount. They must also submit a certified payroll report to prove that they’re in compliance. This report shows every hour worked, the rate of pay as well as how much was paid in fringe benefits.
Fringe benefit management
Some companies try to simplify things by paying fringe benefits in cash. While this may make the paperwork easier, it can cost tens of thousands of dollars in overpayment. Fortunately, there is an easier, and more cost-effective way of dealing with fringe benefit requirements.
Our Fringe Saver combines fringe trust management with sophisticated certified payroll reporting technology to help your company save in taxes, workers’ compensation and general liability. Our system helps you determine and claim the correct amount of fringe credits, eliminate fringe overpayment and avoid common errors.
Streamline your fringe benefits workflow
New Tools for General Contractors
Our new general contractor reporting platform gives you complete visibility into your subs reporting activities. No more wasted time chasing subs, playing phone tag or worrying about late reports.
Fringe Benefits Reinvented
Using an eBacon Fringe Benefit trust allows you to provide employees with access to benefits and cash.
Easily Withdraw Cash
Cash can be distributed by direct deposit or through a pay card each week!
Available Savings Funds
Employees can choose traditional benefits like health, FSA and 401k but also have a cash option for their fringe benefit.
Benefits Automatically Allocated
Our system helps you determine and claim the correct amount of fringe credits, eliminate fringe unnecessary tax payments and avoid common errors.
Interested in seeing how we can save you thousands a year through our fringe trust
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