Hour banking works to the advantage of both contractors and employees. It provides contractors with a way to avoid overpaying health and specialty benefit premiums, and at the same time it provides employees with a method for extending coverage during work stoppages.
If your work includes multiple job sites, multiple trades, multiple fringe rates, private and public work and multiple carriers to pay, doing the backward math to determine how much fringe to take credit for from your monthly premium spend can be daunting. Hour banking reduces this accounting hassle by giving you a per-hour rate for health coverage.
Here's how it works: benefits are provided and tracked in hourly increments based on the hours an employee works. This makes it possible for employers to account for all hours worked as well as their corresponding fringes. This significantly simplifies your accounting process and reduces the chance of overpayment of benefits. Having a per-hour cost for benefits is also a great strength when you're preparing bids.
Hour banking also allows your employees to "bank" hours during peak work periods, then use these excess hours to maintain benefits coverage during slow periods and work stoppages.