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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.

 

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.”

Many Awaiting Trump’s Announcement on Davis Bacon – Davis Bacon Pension Plans, Inc.

On April 5, 2017 President Donald Trump stated in an interview with the New York Times that he would soon be making an announcement concerning the Davis-Bacon Act. He was asked about his infrastructure proposals and if he was going to touch Davis-Bacon and he answered stating he was going to make an announcement in two weeks. Read More “Many Awaiting Trump’s Announcement on Davis Bacon – Davis Bacon Pension Plans, Inc.”

White House Plan Would Mean Billion Dollar Tax Hike for Contractors

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”

Obamacare Delay

Delays to the implementation of Obamacare continue. Apparently, more time is needed to implement the employer mandate. The mandate requires that any employer with more than fifty employees needs to provide health insurance or pay a federal tax. Although, the bill became law over three years ago, the Obama Administration says implementation will be delayed until 2015. Read More “Obamacare Delay”

Companies Who Help Employees Prepare for Retirement Help Themselves

A good and caring employer is often frustrated when they see their employees failing to save for retirement and therefore put their futures as well that of their families’ in jeopardy. Additionally, the amount of pay owners and certain employees can defer to the company’s 401K is tied to the amount hourly workers put away. Thus, it affects everyone’s ability to save for retirement. Read More “Companies Who Help Employees Prepare for Retirement Help Themselves”

Affordable Care Act: Here We Go! Are Your Ducks in a Row?

Nearing the end of 2013, we’ve seen tons of regulations, public comments, changes and an insane amount of political posturing. It’s enough to make your head spin and it’s no wonder the country is in a tizzy. As we close out 2013 and the start of the open enrollment period of the exchanges this month of October, as well as look to the changes and implementations that will begin in 2014…just a couple of months away, it’s time to get serious if you’re in the construction industry and make sure you’ve got all your ducks in a row. Read More “Affordable Care Act: Here We Go! Are Your Ducks in a Row?”