Our construction clients are open shop general and specialty contractors who self-perform the work: electrical, mechanical, concrete, roofing, sitework and the trades alongside them. Some are bidding their first federal job, others run work in twenty states. Most are family-owned, most are ABC members, and all of them are competing against union contractors whose fringe package is already built for them.
Davis-Bacon compliance is decided at the classification level, and wage determinations vary by county and by trade, so we track hours by job, classification and rate as they come off certified payroll and keep coverage in force through weather and gaps between awards. Most of these contractors put the larger share of the fringe into the retirement plan, where it also does work for the company through profit sharing offset and safe harbor design, with health, dental, vision and life rounding out the package.
Paid as cash wages, the fringe carries payroll taxes and workers compensation premium on every hour. Directed into a bona fide plan, it does not.
*FICA: 7.65%; FUTA: 0.80%; SUTA: 1.4%, varies widely from state to state; workers’ comp: approx. 20%, varies by state.
That is savings of $5.00 per employee per hour, or over 5% of payroll. Win your next bid, or increase profits on the work you already have.
Run your own numbers
The Contractors Plan is a Strategic Partner of Associated Builders and Contractors, the national trade association representing merit shop construction. We work with ABC chapters and their members nationwide on prevailing wage health and retirement programs, and our team speaks at chapter meetings and member education events.