Glossary of Terms

Glossary of Terms

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.

Davis Bacon Related Acts – this includes about 60 alternative acts that reference or rely upon Davis-Bacon regulations. The extend to projects funded by grants, loans, loan guarantees, and insurance.

Prevailing Wage – A prevailing wage is the hourly wage, usually benefits and over time, paid to the majority of workers, laborers, and mechanics within a particular area. For instance, if the average wage for construction work in Los Angeles is $20 an hour, all government-funded public works contracts would need to pay their laborers at least $20 per hour. If the same project in Wyoming was only an average of $15 per hour, that is the average wage the contractor would need to pay the laborers in that area.

Pension Plan – A pension plan is a type of benefit in which an employer or sponsor promises a specified payment, lump sum, or combination thereof, on retirement that is predetermined by a formula based on the employee’s earnings history, tenure of service and age, rather than depending directly on individual retirement returns such as 401(k)s.

Fidelity Bond – A Fidelity bond is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent act by specific individuals. It typically ensures a business for any losses caused by dishonest acts of its employees. Also known as ERISA.

401k Plan – A qualified plan established by employers where eligible employees may make elective deferral’s (salary reduction) contributions on a post-tax and/or pre-tax basis.

ER Match Plan – An employer contribution that may match the employee’s elective deferral (salary reduction) contribution up to a certain dollar amount or percentage of compensation.

Profit Sharing Plan – A defined contribution plan that allows employers to give employees a share in the profits of the company. Each employee receives a percentage of those profits based on the company’s earnings.

Comparability Plans – A profit sharing plan in which the employees are divided into groups, with each group receiving a contribution that is a different percentage of compensation. Such as, the owners in one group, project managers in a second group, clerical staff in a third group and field staff in fourth group.

Safe Harbor 401k – Non-Elective ~ A mandatory employer contribution equal to 3% (of W-2 wages) for all eligible employees. Eligible employees are those that have met the Plan’s eligibility requirements.

Safe Harbor – Match ~ A mandatory employer contribution for all eligible employees in the amount of 100% of the first 3% of Salary Deferral plus 50% of the next 2% of Salary Deferral. No contribution is made for employees not making a Salary Deferral.

Individual retirement account rollover options – this is an account that allows for the transfer of assets from an old employer-sponsored retirement account to a traditional IRA. It is designed to maintain the tax-deferred status of those assets

Public Works – this is a broad category of infrastructure projects, financed and constructed by the government, four-week recreational, employment, and health and safety uses in the greater community. They include public buildings, transport infrastructure, public services and spaces.

Minimum Wage – this is the lowest pay or other compensation that employers can legally pay their workers.

Workers Compensation – this is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employees rights to sue their employer for negligence.

Living Wage – This is the minimum income necessary for a worker to meet their basic needs. These needs include food, housing, and other essential such as clothing.