Why do Contractors choose to fund a benefit plan rather than pay the prevailing wage fringe benefits as wages?
- More competitive bidding with higher margins (Competitiveness) – funding benefits can reduce labor cost by 30% or more
- Comply with government mandates efficiently – Affordable Care Act
- Help employees by providing needed benefits – health insurance, training, retirement savings, etc.
- Provide insurance coverage and income to seasonal employees during the layoff period – premium banking, supplemental unemployment benefits
It’s easy to continue with the status quo of paying the fringe obligation in the paycheck. But as everyone knows, the easy path doesn’t always lead success!
Contractors that are striving to be more competitive (and more profitable), struggling to deal with ever-expanding government regulations, and concerned about their employee’s long-term financial health and welfare, have the option to make tough choices that can potentially address all of these concerns.
At ARCHER JORDAN we are daily assisting our contractor partners in moving forward toward their financial and business goals.