(Almost) Everything’s Coming Up Roses

Most business owners become business owners for similar reasons:

• They love what they do.
• They’re really good at what they do.
• They have ideas about how to do it better.

So they start a business and soon find that being the boss means they actually get to spend less time doing what they love and excel at doing.  The “business” part of being a business owner can seem all-consuming. And frankly, it’s not what the majority of contractors really enjoy.

A good strategy for overcoming some of these challenges is to team with trusted partners who can ease the burden and become trusted resources and advisers. For example, an accountant and a payroll service with expertise in the unique needs of contractors is a good start and can go a long way toward taking care of business.

A benefits provider that specializes in the government contracting niche is also an important part of your team, especially with the deadline for businesses to comply with the Affordable Care Act (ACA) less than a year away.

These are just a few of the ways a benefits provider who knows prevailing wage work can help.

1. If you’re an employer who will be subject to ACA, funds to pay for providing health insurance for your workers are designated in your prevailing wage contracts. Using fringe dollars to provide benefits for workers has several other advantages:
   • Compliance with ACA. Think about how quickly 2013 flew by. Before you know it, 2015 will be here and penalties for noncompliance will begin.
   • Reduction of payroll costs. Fringe dollars used to provide benefits are exempt from payroll taxes such as FICA, FUTA, SUTA, workers compensation and general liability insurance.
   • Attract and retain qualified, experienced workers. Even if you’re not subject to ACA requirements, every individual in the U.S. is now required to have health insurance. With construction activity picking up, the best workers will be looking for an employer that can save them the hassle and expense of getting coverage on their own.
2. If you’ve been paying the fringe as additional cash wages, now is the time to stop. The argument that workers will leave when they see the reduction in their weekly checks doesn’t hold water anymore. Those who are paying for health insurance on their own are probably reeling from sticker shock and would welcome having employer-provided insurance.
3. If you don’t offer a retirement plan for your prevailing wage workers, this is a great time to start. This has many advantages for your employees and for you:
   • Workers who are most at risk of career-ending injuries automatically build an emergency fund.
   • Employees won’t spend what they don’t have. While some may resent seeing smaller checks initially, once they see the balances in their retirement accounts grow, most realize the value of saving for retirement.
   • With increased contributions from your field workers, company owners and key employees can save more for retirement as well.
4. Prepare for the unexpected. The recent government shutdown was a terrific reminder to government contractors to plan for times when they encounter an unforeseen shutdown. What happens when bad weather causes project delays? Or perhaps you have a lag between contracts that results in short-term layoffs. This is especially important with ACA’s requirement for all individuals to have health insurance. How will your employees pay their health insurance premiums during “shutdowns”?  Some providers who specialize in working with open shop contractors covered by the Davis-Bacon Act use a concept called hour banking, which can help both the business owner and your workers. Just as the term implies, hour banking is a method that allows employees to “bank” extra hours worked during peak periods, then draw from this excess to continue health insurance coverage during slow times. Having this flexibility can serve as a huge relief for workers and their families.

Look for a benefits provider who truly understands your industry and its unique challenges. If you can turn administration of benefits over to your provider, save money, and comply with the laws, you’ll find yourself with many more roses and many fewer stinkweeds.