What are fringe benefits?
The Davis-Bacon and Related Acts requires contractors and subcontractors to pay prevailing wages on government-funded projects in excess of $2,000. Prevailing wages are a combination of an hourly rate plus an hourly fringe benefit rate. When you add up these two amounts you arrive at the actual hourly cost for each employee on a 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 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 overpayment and avoid common errors.
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.
The system automatically calculates the correct fringe benefits based on applicable local and federal regulations. You can have piece of mind that employees are being paid correctly.
- Easily and automatically stay compliant with applicable local and federal fringe laws.
- Create reports showing fringe benefits compliance
- Reports are ready whenever an audit comes up
Will my employees still be able to withdraw fringes in cash?
Yes, if an employee elects not to allocate their fringes into different funds, they will receive the fringe portion as a separate check (minus required taxes). By implementing our fringe management service, your employees will have greater flexibility to save for the future or access cash as needed.
What types of savings funds will be available to my employees?
- FSA or HSA (depending on medical plan)
- Dependent Care (DCA)
- Parking & Mass-Transit Commute
- Deduction Reserve Account
- College or First-Time Home purchase
- 401(k) Retirement Investment
How will my business benefit from implementing the trust?
By properly allocating fringes, your business will benefit from having a reduced tax liability and reduce workers’ compensation costs.
Our system also automatically assigns the correct and exact fringes for the jobs worked, so you can have peace of mind that employees are paid correctly. As a business, you can expect significant savings on payroll taxes and workers’ compensation premiums.
How will my employees be able to see their benefits allocations?
Our fringe benefits management system is integrated directly into eBacon, so in addition to using eBacon’s self-service system for time tracking, PTO request, employees are able to manage their fringe benefit allocations.
They will be able to request a cash withdraw or reimburse for tax free spending on medical, dental, dependent care, mass-transit, parking, college or first-time home buying.
Want to reduce your fringe payments by an average of 35%?
Explore the Fringe Saver today