How does using bona fide benefits plans reduce your company’s payroll burden?
A part of the prevailing wage, the fringe portion, is to provide benefits for hourly workers. This benefits portion is not subject to payroll costs (FUCA, FICA, state unemployment taxes, general liability, and in some states, workers comp insurance). There are variances in the rates, these taxes represent approximately a 17-25 cents addition for every dollar paid as cash wages.
What does Prevailing Wage mean?
In government contracting, Prevailing Wage is defined as the hourly wage, usual benefits, and overtime, paid in the largest city in each county, to the majority of workers, laborers, and mechanics. Prevailing wages are established, by the Department of Labor & Industries, for each trade and occupation employed in the performance of public work. See Prevailing wages rates by state.
