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How Do Prevailing Wage Pension Plans Help Businesses?

How Do Prevailing Wage Pension Plans Help Businesses?

If you’re a business owner, you’re always looking for ways to reduce costs and increase spending efficiency. Depending on the type of business you operate, staff wages are often one of your most substantial expenses.

This is undoubtedly the case for businesses that bid on government contracts. If your company currently works on government contracts, you will be expected to offer a prevailing wage to your employees. This can have a marked impact on your fixed costs.

As a cost-mitigation technique, many savvy business owners have started using prevailing wage pension plans to reduce their outgoings.

So, what is the prevailing wage, and how can prevailing wage pension plans improve your business? In this blog, we’ll explore the key details surrounding this subject to help you improve your business’s viability.

What is the Prevailing Wage?

The prevailing wage refers to a pre-determined wage level that is expected to be paid to workers from companies that bid on government contracts. Typically, the prevailing wage is the wage that most people in a specific industry or role receive. It is often determined by unions.

Ways Prevailing Wage Pension Plans Help You Improve Your Business

If you’re searching for ways to mitigate the increase in wages that government bid regulations require, a prevailing wage pension plan is one possible solution. Let’s explore the three primary ways that this type of pension plan can help you increase your business’s viability.

Reduce Costs

The primary way prevailing wage pension plans allow you to reduce costs is via the payroll tax. By offsetting the initial wages you provide to your staff, you can lower your payroll tax liability. It’s an excellent way to reduce your upfront costs if you’re bidding on government contracts.

Not only can you reduce your payroll tax costs, but you can also reduce your general liability premiums. Depending on your industry, a reduction in your general liability premiums can have a serious impact on your bottom line.

Offer More Competitive Bids

In an increasingly competitive contract bidding environment, it’s more critical than ever to provide the most affordable quotes for government contracts. By reducing your payroll tax and general liability premiums, you’ll be well-positioned to offer the most competitive quotes during the bidding process. This can drastically improve your revenue capabilities.

Increase Your Margins

As a business, if you’re able to reduce your costs and win more contracts, your profit margins will naturally increase. At the end of the day, as a business owner, remaining as profitable as possible is the key to your long-term success.

Verdict: Creativity Can Help Your Improve Profitability

It’s easy to get caught up in the operational aspects of your business. If you’re too busy to take advantage of cost-saving measures, you won’t be well-positioned to improve your profitability and grow your business. Sometimes a little creativity can go a long way in helping your business achieve its goals.

At Davis-Bacon Pension Plans, Inc., we help businesses improve via the use of prevailing wage pension plans. If you’re ready to explore this cost-saving method in more detail, contact us today at (425)889-8855.

 

Benefits of Davis Bacon Pension Plan

Benefits of Davis Bacon Pension Plan

If you own a business that frequently bids on government projects, you understand how critical it is to reduce your costs. Unfortunately, companies that win government contracts must pay a prevailing wage to staff members, which can drastically increase operational costs and negatively impact profitability.

Davis Bacon pension plans allow businesses to reduce the financial burden of prevailing wage employment.

Reduce Payroll Tax

One of the primary benefits of a Davis Bacon pension plan is a reduction in payroll taxes. By paying your staff less money upfront, you will be able to reduce your overall payroll tax burden. As the prevailing wage can cause severe financial obligations for businesses, a lower payroll tax bill can be a major relief for many employers.

Decrease General Liability Premiums

For many businesses, general liability insurance can be a significant cost. Using a Davis Bacon pension plan can help you reduce your general liability premiums. It’s an excellent way to decrease the cost of protecting your business.

Win Additional Bids

By decreasing your internal employment costs, you’ll be better positioned to provide competitive quotes and win government contracts. If you want to make your business lean and capable of winning the most competitive government jobs, using a Davis Bacon pension plan can help.

Increase Profitability

By reducing costs and increasing your successful bid rate, your business will be well-positioned to increase its profitability. As a business that bids on government contracts, you’re well aware that margins are often small if you have to pay the prevailing wage to staff members. A Davis Bacon pension plan can help you increase the financial success of your company.

Provide Retirement Benefits to Staff Members

While reducing payroll tax and increasing your firm’s competitiveness are excellent benefits for your business, there are also advantages for staff members. While the upfront wage you pay to your staff will be less than the prevailing wage, a Davis Bacon pension plan will contribute to the retirement income of your employees. By using a pension plan to offset your costs, you’ll also be offering excellent retirement benefits to your staff.

Contact Davis-Bacon Pensions Plans, Inc.

At Davis-Bacon Pension Plans, Inc., we partner with employers to help them reduce expenses and increase profitability. Our pension plans offer excellent benefits to staff and help you enhance your competitiveness in the bidding process. To speak to us about our pension plans, contact us at (425)889-8855.

 

What is Certified Payroll?

Construction and other labor jobs performed on government property and payed for by the government have set special requirements. One of those requirements is certified payroll. Certified payroll is a special payroll report that all contractors working on federally funded projects must complete and submit to government authorities. Read More “What is Certified Payroll?”

Paying Fringe Benefits in Cash vs. in a Benefit Plan

In 1931, The Davis Bacon Act was put into law requiring companies that perform work on federally-funded jobs to pay all employees working on the job a prevailing wage. The prevailing wage is paid as a per-hour wage and a per-hour cash equivalent value of benefits. These wages are set by the United States Department of Labor and are included with bid specifications for federal projects.

The Davis Bacon Act allows for employers to pay fringe benefits as an additional cash wage added onto the required hourly prevailing wage or pay into a benefit plan. For example if the required prevailing wage was $25 an hour with a $9 an hour fringe benefit an employer could choose to pay each worker the benefit in cash at $34 an hour or pay $25 an hour and set up a bona fide benefit plan with benefits that could include 401k or pension, medical/vision/dental insurance (one or all three), and life insurance. Read More “Paying Fringe Benefits in Cash vs. in a Benefit Plan”

Davis-Bacon Facts that are Important for Every Contractor to Know

When people hear the words Davis Bacon, they usually think prevailing wage and government jobs. Sometimes it is used to refer to all prevailing wage jobs, but Davis Bacon is actually just one piece of prevailing wage legislation. Davis Bacon is also one of construction’s most debated sets of laws and can prevent some companies from bidding on Davis Bacon jobs.

With all of the misinformation, we thought we would put together a few basic facts about Davis Bacon to help take the doubt out of Davis Bacon and encourage more companies to bid on jobs that will boost their business. Read More “Davis-Bacon Facts that are Important for Every Contractor to Know”

The Benefits of Workforce Reporting – Davis Bacon Pension Plans, Inc.

Davis Bacon Laws require a certain amount of reporting and tracking. While it may seem like extra work or a nuisance there is actually a lot of benefit to reporting workforce data on prevailing wage jobs. Building a better community relies heavily on hiring the right workforce. Workforce reporting does not just communicate that a company is complying with Davis Bacon laws, it empowers an agency or contractor to hire more intuitively and make a bigger positive impact on a community’s workforce. Read More “The Benefits of Workforce Reporting – Davis Bacon Pension Plans, Inc.”

What is a Certified Payroll?

If you work as a contractor for government projects then you are going to get paid a little differently than normal wage workers because of a little thing called a certified payroll. The certified payroll is a type of report that contractors have to make which details the hours and earnings of their employees. This came into effect back in 1931 under the name Davis-Bacon Act, since its inception the act has changed to include more jobs than simply construction. The jobs that can now file for a certified payroll includes alterations and repairs to buildings and repairs to Public Works. Read More “What is a Certified Payroll?”

Davis Bacon Pension Plans Save Companies Money – Davis Bacon Pension Plans, Inc.

The Davis-Bacon Act is a law that requires the payment of a prevailing wage to all laborers on construction/improvement jobs for government property.

Prevailing wage is set by the Department of Labor. This wage is different depending on the location and year as well as the type of work performed. This wage has two components to it, the hourly pay rate and the hourly fringe benefit. Read More “Davis Bacon Pension Plans Save Companies Money – Davis Bacon Pension Plans, Inc.”