1 / 16

Michigan Minority Contractors Assn. Davis-Bacon and Prevailing Wage Overview

Michigan Minority Contractors Assn. Davis-Bacon and Prevailing Wage Overview. Agenda. Define Government Markets Niche Demonstrate the Market Opportunity Review Industry Specific Business Problems & Solutions The Contractors Plan powered by Fringe Benefit Group Questions & Answers.

aldan
Télécharger la présentation

Michigan Minority Contractors Assn. Davis-Bacon and Prevailing Wage Overview

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Michigan Minority Contractors Assn. Davis-Bacon and Prevailing Wage Overview

  2. Agenda • Define Government Markets Niche • Demonstrate the Market Opportunity • Review Industry Specific Business Problems & Solutions • The Contractors Plan powered by Fringe Benefit Group • Questions & Answers

  3. Government Markets • Construction & Maintenance Contractors Bidding Work Subject to Prevailing Wage Laws • Federal & State Davis Bacon Act • Federal Service Contract Act • Required or Available Fringe Benefit Allocation • Non-Union or Split Shop

  4. U.S. Housing Starts1991–2011

  5. Value of Public Construction Put in Place 1993 – 2011

  6. Solving Industry-Specific Business Problems

  7. Sample Wage Determination BASEWAGE $30 + FRINGE BENEFIT $10 TOTAL HOURLY WAGE $40

  8. Employer Decides How toSatisfy the Wage Obligation • Contractors typically pay the “base” amount in cash and then choose how to pay the “fringe” portion; • For vacation and holidays, • Into an approved apprenticeship program, • Furnish “bona fide” fringe benefits, or • As cash, and have it treated as wages

  9. The problem when performing Gov’t Work…….. All cash wages subject to payroll burden: • FICA 7.65% • FUTA & SUTA* 2.00% • General Liability* 2% - 15% • Workers’ Comp* 10% - 40% The actual payroll burden can be 11%-60% This increases your labor costs!!! *varies by company & state

  10. How it works…Plumber, Ohio Pay Fringe in Paycheck Base Wage $34.52Fringe $10.33 Total Wage $44.85 Payroll Burden $11.21(25%) Bid Cost $56.06 Pay Fringe to “Bona Fide” Plan Base Wage $34.52 Total Wage $34.52 Payroll Burden $ 8.63(25%) “Bona Fide” Plan $10.33 Bid Cost $53.48 $2.58/hr savings per person

  11. Plumbing Contractor • About 75% of this contractor’s work is government • 2080 annual hours x 75% = 1560 hours • There are 25 hourly employees • The hourly savings by removing the fringe from payroll is $2.58 • The annual savings: • 1560 hours x 25 EEs x $2.58 hour = $100,620 Many pay for health premium or retirement contributions “on top”!

  12. Sample Bidders List

  13. The Solution:

  14. What Makes a Fringe Benefit Plan “Bona Fide?” • Specified in writing and communicated to covered employees • Irrevocable contributions • Group benefit plan • Contributions made to a third party or trust • Convey a benefit to the person actually performing the work • Accounted for on an hourly basis (weekly payroll reporting form WH347)

  15. Does this make sense for you? • Union or non-union (merit, open or split shop)? • Bidding or working on prevailing wage projects? if so, what % of your work is prevailing wage? • How do you handle the fringe portion of the wage determination? • How many hourly employees?

  16. Questions? John Allen– RVP Government Markets jallen@fbg.com 512-663-0709

More Related