State Prevailing Wage

  Currently, 32 states have prevailing wage laws, sometimes referred to as "Little Davis-Bacon Acts". These laws apply to construction contracts awarded by state, city or other local agencies, and their intent is similar to the federal Davis-Bacon Act: to provide payment of locally prevailing wages and benefits to covered laborers or mechanics.

  The dollar threshold that triggers each state's prevailing wage law varies. Some states have no threshold and others are as high as $500,000. You can find links to each state's Department of Labor and state wage determinations (if applicable) here.

The Problem

  Many contractors pay the fringe benefit portion of the prevailing wage as additional cash wages, believing it's the easiest way to comply with the law. But choosing this alternative costs you money you don't have to pay.

The Solution

  Allocating this amount to a bona fide benefit plan or plans results in significant cost savings. When the fringe portion of the prevailing wage is used to provide benefits for hourly workers, this amount is not subject to payroll costs such as:

• FICA
• FUTA
• State unemployment taxes
• Workers compensation premiums
• Public Liability Premiums

  With The Contractors Plan, you can provide valuable benefits such as retirement, medical, dental, vision and life insurance plans for your employees - and, at the same time reap these benefits for your company:

• Reduce payroll burden
• Narrow the gap between wages paid on private work and government contracts
• Shave dollars off your bids, making them more profitable and increasing your odds of winning
• Increase profits
• Increase your ability as a company owner to contribute to your own retirement accounts using our expert plan design