Page 27 - IEC Insights Mar-Apr19

FEATURE

team has an important part to play, Trying to be both quarterback and team owner
from your payroll system to your broker.
The prevailing wage quarterback’s can lead to significant gaps in game strategy. If
job is to get everyone working there isn’t a prevailing wage professional in your
together to accomplish your goals.
life taking the role of quarterback and executing
So now the question is, who should
coordinate your prevailing wage on the field for you, then your team may face
playbook? The ideal prevailing wage some difficult times ahead.
partner is someone who understands
your business and communicates well
with you and your team. He or she should
understand all the legal complexities
of Davis-Bacon work but also bona participate?”) but competes against This does not mean the CPA or broker in
fide benefits and their tax implications. unions who offer robust benefit plans. this scenario was not doing their job but
Contractors don’t need to replace their This contractor needed a better alternative it takes a special expertise to synchronize
CPA, broker or payroll system, but they to continue to offer benefits to his prevailing wage compliance with health
do need to have an expert in publicly employees and increase utilization. benefits to achieve exceptional results.
funded construction quarterbacking
the team. When done properly, this can With the help of a prevailing wage expert, Government projects and fringe benefits
greatly reduce payroll expenses, increase the client learned how fringe contributions are complicated! Take time to learn about
your job win ratio, enhance bonding (which he was paying as cash wages) the tools and strategies available to best
capacity, and expand your margins. could be used to lower premiums and serve your employees and help your
Additionally, a skillfully designed fringe enhance the administration of the plan. business. Leading organizations such
contribution strategy can maximize When the fringe portion of the prevailing as IEC provide educational content and
retirement contributions for owners wage is used to provide “bona fide” seminars on prevailing wage strategies.
and highly compensated executives. benefits for hourly workers, these dollars Make plans to attend one or ask chapter
are not subject to payroll costs such as leaders to point you in the right direction.
While quarterbacks are typically the FICA, federal and state unemployment A trusted broker can access the right
highest paid players on the field, taxes, and (in most states) workers tools and services on your behalf, so
working with the right prevailing wage compensation insurance. While rates for engage them to help you find the right
advisor is not an added cost. In fact, the last two vary, conservatively these prevailing wage partner. Don’t make
reducing the tax savings, insurance taxes represent an additional 25 cents uneducated decisions when it comes to
costs and “payroll burden” can save on each dollar paid as cash wages. fringe benefits. Identify a trusted source
the typical contractor 4-7% on their and ask for an evaluation. If you take the
labor costs, not to mention wrap in a With the help of a fringe benefit time to find the right prevailing wage
myriad of administrative efficiencies. quarterback, the contractor was quarterback, you will quickly find yourself
able to enhance the quality of the celebrating a win-win team victory.
Take a recent example of an electrical benefits his employees received while
contractor in New Jersey. The owner reducing his payroll tax burden. He
has 42 employees and approximately began putting the fringe contributions Harrison Cooney is a Sr. Business
half of the company’s work is subject to towards health insurance and retirement Development Representative for The
prevailing wage rates. The company’s plan contributions for his employees. Contractors Plan (powered by Fringe Benefit
insurance broker implemented a benefits Employee morale skyrocketed. Group). Harrison consults with contractors
plan, but the rising costs of health on effective compliance and financial
insurance caused employee participation Outsourcing your prevailing wage benefits efficiency when competing under local,
rates to plummet. The owner considered strategy may actually be less work and state, and federal government (Davis-Bacon
Act) “prevailing wage” mandates. He can
terminating the plan (“what is the point less expensive, just like the case above. be reached at hcooney@fbg.com.
of offering ‘benefits’ if employees don’t

www.ieci.org | March/April 2019 | Insights Magazine 25