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”
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.
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?”
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.
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?”
In recent years past, there has been some controversy over Davis Bacon prevailing wage laws and whether they are outdated and should be dissolved. Some believe Davis Bacon is too expensive and no longer relevant in today’s workforce. Read More “Bacon Make Construction Better – Davis Bacon That is”
This act of 1931 is United States federal law that establishes the requirement for paying the local prevailing wages on public works projects for laborers and mechanics. It applies to all contractors and subcontractors performing on federally funded or government assisted contracts in excess of $2000 for the construction, alteration, or repair including painting and decorating of public buildings or public works. Read More “Glossary of Terms”
an icon image austerity package with dollar bill and tape measure
President Obama recently unveiled a White House corporate tax reform proposal. In response to said proposal, the Associated Builders and Contractors, otherwise known as ABC issued the following statement:
“Far from a ‘grand bargain’, the president’s latest trial balloon simply repackages warmed over White House proposals from years past,” said ABC Vice President of Federal Affairs, Geoff Burr.
“Corporate only rate reduction does not amount to business tax reform, “said Burr. “The president’s plan not only widens the existing gap between Main Street and the Fortune 500, but would actually mean billions of dollars in increased taxes for construction contractors.” Read More “White House Plan Would Mean Billion Dollar Tax Hike for Contractors”
