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How Do Employers Benefit from Prevailing Wage Pension Plans?

How Do Employers Benefit from Prevailing Wage Pension Plans?

The Davis-Bacon Act is a federal prevailing wage law. It is governed by the Department of Labor and is applied to both contractors and subcontractors who perform work on various government projects. There are specifics in terms of this act, as these projects must be in excess of $2,000 for all of the construction, repair, or alteration. As an employer, this affects you because you are required to pay the prevailing wage rate, including fringe benefits. This is where prevailing wage pension plans come into play.

What Qualifies as Fringe Benefits?

Fringe benefits include retirement plans, health insurance, life insurance, any bona fide benefit, as well as vacation, holiday, and sick leave.

How to Satisfy the Requirements

As an employer, you benefit from prevailing wage pension plans, because it allows you to satisfy the Davis-Bacon requirement in alternative ways. These ways include:

  • Paying both wage and fringe portions in cash
  • Paying the wage portion in cash and the fringe portion by contributing to prevailing wage pension plans
  • Combining both cash wages, along with bona fide fringe benefits

Other Advantages to Using a Prevailing Wage Pension Plan

Other advantages might include lowered general liability premiums in addition to lower worker’s compensation premiums. This is because fringe benefits are not considered part of payroll.

These plans are also beneficial to employees because benefits are purchased before taxes. This means that when the prevailing wage plan is combined with a 401(k) plan, employees will be able to pay less in taxes.

Be Sure That You Are in Compliance

Although there are many benefits to prevailing wage contributions to a qualified benefit plan, it is important to be aware of Davis-Bacon requirements. It is essential that these plans are in compliance.

Contact us at Davis-Bacon to learn more about prevailing wage pension plans and to learn how your company can benefit. You can call (425) 889-8855 for details!

Why Your Business Needs a Davis Bacon Pension Plan

Why Your Business Needs a Davis Bacon Pension Plan

Anyone that owns a business knows that along with it comes taxes, rules, and regulations. If you work in an industry where the government has ruled that you are required to pay a prevailing wage, then this is only one of the many costs you may accrue.

 

When running a business there are operational costs, along with payroll taxes, and hefty insurance premiums that may end up negatively affecting your bottom line. If you have employees on your payroll, then you might want to know about how you can guarantee their standard of living after they retire, but lower your overall costs as well. All of this can be done, with a David Bacon Pension Plan.

What is a Davis Bacon Pension Plan?

The Davis Bacon Pension Plan works according to The Davis-Bacon Act of 1931. This act  requires any contractor or subcontractor performing work on a federal government construction contract or federally assisted construction contract over $2,000, to pay their workers a specific fair and required prevailing wage. It also requires fringe benefits to be paid on similar projects. Having this form of pension plan ensures that you are following the law, and providing a safety net for your workers.

Lower Overall Costs

Because the Davis Bacon Act requires you to pay a specific wage, it often can require huge financial commitments on your behalf. This can be counterbalanced by taking advantage of the reduction in payroll taxes offered with the Davis bacon Pension Plan.

 

Additionally, this pension plan allows you to decrease your insurance premiums. For those who participate in the Davis Bacon pension plan, you will receive a reduced cost on your general liability premiums.

 

Overall both of these savings provide you to have a reduction in overall costs and save on your bottom line.

Offer Better Retirement Benefits and Attract Better Talent

Retirement benefits are something that skilled workers look at when choosing where they want to spend their time working. Although it is typically quite expensive to offer high-quality retirement benefits to your employees, if you are saving in payroll tax and insurance premiums, then you will be able to offer better benefits for your staff.

 

With a David Bacon pension plan, you will be able to pay your staff less than the prevailing wage, because you will contribute to the retirement income of your employees. This allows you to save while providing incredible benefits. Not only is this helpful for your employees, but it will draw higher quality talent to come work for you.

Become More Attractive to Customers

By saving on prevailing wage costs, insurance premiums, and payroll taxes you can lower your overall cost of overhead. In turn, this can allow you to decrease your total costs and offer more attractive rates to your customers. Especially if you work in a space where you must bid for construction contracts, having a lower bottom line will always bring you to the forefront.

Learn More About Davis Bacon Pension Plans

At Davis-Bacon Pension Plans, Inc., we offer the highest quality pension plans that can be beneficial to both you and your employees. By recommending the best options, we help you to reduce expenses and have more cash flow going in. Learn how our pension plans can skyrocket your business to success, call us at (425) 889-8855 today.

 

 

 

How Do Prevailing Wage Pension Plans Help Businesses?

How Do Prevailing Wage Pension Plans Help Businesses?

When establishing a 401(k) plan a business owner has a variety of employer contribution options that he or she may choose to make to the plan. These options range from no contribution to funding the maximum contribution for all employees. Whichever option the business owner chooses to go with can have a significant impact on the business’s profitability. Back in 2018 failure to adhere to prevailing wage guidelines set into play cost companies $304 million in back wages. Companies must pay 100% of the locally prevailing wage rate or suffer a major penalty. However, when enacting a prevailing wage pension plan, you may choose to pay the base rate to employees while contributing the fringe rate into a pension play. Doing this saves the amount you would have spent in payroll taxes, while simultaneously helping employees secure a comfortable state-of living for themselves upon retirement.

How to Make Davis-Bacon Plans Work For You

The Davis-Bacon Pension Plans are not one-size-fits-all. Business owners can customize a plan to best suit their business needs. Professionals at Davis-Bacon can help you determine which plan will work best for your company, as well as calculate how much this plan will save you in the long haul. 

Low-Risk, High-Pay Off Solution

Going with a prevailing wage pension plan is oftentimes the most low-risk solution for a company. When businesses pay 100% of the prevailing wage upfront, they are now forced to make riskier moves to try and garner bids. This in turn drives up other costs businesses must pay such as payroll taxes, labor, and liability insurance. It becomes a conundrum because when businesses bid more jobs are lost, but when they bid less they are losing out on profitability. The Davis-Bacon prevailing wage pension plans make it so that everyone is happy and secure in his or her role.

If you want your business to prevail above the rest, it’s time to contact our team at Davis-Bacon Pension Plans, Inc. We’ve helped countless business owners generate maximum profit at the lowest cost to employees and to their bottom line. Contact our office today for more information (425) 889-8855.

Using a Davis Bacon Pension Plan in a COVID-19 World

Using a Davis Bacon Pension Plan in a COVID-19 World

COVID-19 has caused economic pain for businesses throughout the United States. If you own or operate a company, you understand the challenges you’re facing to remain viable. If you’re hoping to find a solid way to survive COVID-19’s impact on the world, it’s time to consider methods for reducing your costs and improving efficiency.

Businesses that bid for government contracts must pay the prevailing wage to employees. This can increase the cost of labor for business owners seeking government work. Fortunately, using a Davis Bacon pension plan can reduce the cost of bidding on government jobs.

Increasing Competitiveness in a COVID-19 Economy

While reducing costs in a pandemic might seem impossible, using a Davis Bacon pension plan can help you access lower upfront wage costs. By using a specially-designed pension plan, you can reduce the initial wage you pay to your staff members by placing it in an arranged pension. In doing so, you can save money on your payroll taxes.

Your staff will still receive the prevailing wage via their pension plans, and you’ll be able to slim down your overall expenses. It’s an excellent way to remain competitive in a COVID-19 world. While you might not be able to reduce other business expenses, don’t leave your costs stagnant by paying the prevailing wage upfront.

Make Your Bid Attractive for Government Contracts

As government contract bids become increasingly competitive, it’s more important than ever to offer the most attractive bid possible to the government. If you want to remain a step ahead of your competitors in COVID-19, a Davis Bacon pension plan is a clear solution.

Contact Us to Discuss Davis Bacon Pensions Plans

Our team at Davis-Bacon Pension Plans, Inc. offers Davis Bacon pension plans to business owners. If you’re searching for new ways to improve your business in a COVID-19 world, it’s time to contact our office at (425) 889-8855.

Can Davis Bacon Pension Plans Help My Business Win More Contracts?

Can Davis Bacon Pension Plans Help My Business Win More Contracts?

If you run a business that relies on revenue from government contracts, you understand that federal regulations often impact your ability to generate profit. The government requires companies bidding on federal contracts to provide a ‘prevailing wage’ to their staff members. This means that businesses bidding on government contracts typically have higher operational costs than other businesses in similar industries.

Fortunately, Davis Bacon pension plans allow you to reduce your overall wage burden. In doing so, they can help you win more government contracts for your business. Let’s find out how!

How Davis Bacon Pension Plans Help You Lower Costs

Davis Bacon pension plans allow you to offset the amount you pay to staff by placing it into a pension plan program. In doing so, you can reduce the upfront wage you pay to staff and decrease the amount of payroll tax that your company is liable for. This means that you can shave serious money off your overall payroll tax bill each year.

Additionally, companies that have Davis Bacon pension plans can also take advantage of lower general liability premiums. This is yet another way that this type of pension plan program can help you reduce expenditure.

Lower Costs Mean More Competitive Bids

Depending on how your business is structured, wages are likely one of your highest costs. If you’re able to reduce the cost of employing your staff, you can offer more competitive bids than other companies seeking government contracts. Davis Bacon pensions plans make your business leaner, which is an excellent way to provide bids at lower prices.

Make Yourself More Competitive Today!

If you want to make your business more competitive, it’s time to contact our team at Davis-Bacon Pension Plans, Inc. We’ve helped countless business owners reduce their costs and win additional contracts. If you’re searching for a way to generate more revenue with government contracts, contact our office at (425) 889-8855.

Davis Bacon Pension Plans: Helping Your Business and Your Staff

Davis Bacon Pension Plans: Helping Your Business and Your Staff

If you’re a business owner that frequently bids on government contracts, you’re likely aware of the prevailing wage regulations. Businesses that bid on government contracts must pay a prevailing wage to their employees, which can drastically increase the cost of staff for many businesses. Fortunately, Davis Bacon pension plans allow business owners to reduce costs and offer benefits to their employees.

Davis Bacon Pension Plans Benefit Both Parties

The primary reason many business owners access Davis Bacon pension plans is that they reduce overall payroll tax and general liability costs. This means that while government contracts require your business to increase wages to your staff, you can offset some of this cost by placing wages into a pension plan and reducing your payroll tax.

This type of pension plan is an excellent way to reduce the financial burden associated with federal regulations on bidding for government contracts. By reducing your costs, you’ll be more competitive during the bidding process, and your business will be better positioned to profit from the contract.

Still, it’s not just your business that will benefit from a prevailing wage pension plan – your staff will also be able to take advantage of various aspects of this type of pension program. Employees will be able to reduce their FICA or income tax burden. They’ll also be able to take advantage of tax-deferred earnings.

Ready to Find the Perfect Davis Bacon Pension Plan?

If you’re a business owner that bids on government contracts, it’s critical to partner with a reliable Davis Bacon pension plan provider. At Davis-Bacon Pension Plans, Inc., our primary goal is to provide excellent pension plan options to our commercial customers. If you’d like to discuss our pension plans, or you need more information about how they can save your business money, don’t hesitate to contact us at (425) 889-8855.

Why Classifying Workers Correctly is Critical on Davis Bacon Projects

Why Classifying Workers Correctly is Critical on Davis Bacon Projects

If you secure a federally-funded construction contract, you’ll need to pay your workers the prevailing wage. The exact prevailing wage varies depending on skill level, role, and a host of other factors. It’s critical to classify your workers correctly if you want to avoid severe financial implications.

Many business owners ignore the severity of incorrect classifications. One of the most common examples of this is an employer labeling a skilled worker as an unskilled laborer. In doing so, they can often pay their employees a lower rate.

In some cases, this may be a mistake. If you have a skilled laborer working as both an unskilled laborer and tradesperson, you need to pay them according to the hours worked in each role. You must allocate the correct number of hours to each job type – you cannot simply pay them the lower wage because they fill multiple roles within your company.

You must also realize that misclassification does much more than violating the Davis-Bacon Act. It may also violate the False Claims Act.

Not abiding by correct classifications can have dire consequences. In fact, some business owners have been sued because of the misclassification of staff. The financial repercussions resulting from a lawsuit are much more significant than the savings from paying staff a lower wage.

While paying the prevailing wage can be difficult for businesses with small margins, there are avenues you can take to reduce your financial exposure. By using a Davis Bacon Pension Plan, you can offset some costs associated with higher wages.

At Davis-Bacon, we help our clients access industry-leading Davis Bacon Pension Plans. If you’re hoping to improve your business’s cash flow when you’re working on government contracts, our arrangements will help you reduce your payroll tax liabilities. Contact our team at (425) 889-8855 if you have any questions about this unique pension plan.

Three Davis Bacon Pension Plan Facts to Keep in Mind

Three Davis Bacon Pension Plan Facts to Keep in Mind

If you’re a construction business owner, you’re already aware that you must pay the prevailing wage to laborers involved in federal contracts. This hurdle often proves to be a significant stumbling block for businesses that are not equipped to pay higher wages.

Fortunately, using a Davis Bacon Pension Plan can help you offset some of this cost. In this article, we’ll take a look at three facts regarding Davis Bacon Pension Plans – keep these in mind if you’re planning on incorporating this type of pension plan into your business.

1. It Can Save Your Business Serious Money

 

First things first – a Davis Bacon Pension Plan can help your business save serious money. By offsetting your payroll tax liabilities, you’ll be able to reduce the financial burden of complying with prevailing wage regulations. It’s one of the best ways to reduce your exposure to the Davis Bacon Act.

2. Misclassification Can Result in Punitive Damage

 

If you’re working on a Davis Bacon project and you misclassify a worker, it can result in severe issues for your business.

While some business owners cut corners on purpose, others make the mistake of not appropriating hours correctly.

For example, if you have an electrician that also works as a laborer, you must pay them the correct prevailing wage for hours that they work in each role. You cannot merely pay them the lower laborer wage for all working hours.

3. Software Can Help

 

If you’re struggling to manage a Davis Bacon project, using software to help you track staff hours and prevailing wages is critical. By accessing specialized software, you can ensure that you’re following the Davis Bacon Act. In essence, this is essential for business owners that want to take advantage of a Davis Bacon Pension Plan.

Fortunately, there are plenty of excellent software programs available that can help you remain compliant. This is the best way to take the stress out of your next federal contract.

Contact Us to Discuss Your Options

 

If you’re working on federal contracts that require you to pay the prevailing wage, it’s essential to reduce your costs as much as possible. If you can’t lower your labor costs, you won’t be able to offer competitive bids on contracts. Fortunately, a Davis Bacon Pension Plan can help you avoid the financial repercussions of the Davis Bacon Act.

At Davis-Bacon, we help our clients use pension plans to increase their profitability. If you’d like to discuss our services, contact us at (425) 889-8855.