How are Fringe Benefits Determined

Basis of Wage Determination and Computation of Fringe Benefits

Fringe benefits for prevailing wage workers are specified by the Administrator of the Wage and Hour Division of the U.S. Department of Labor. There are two types of fringe benefit determinations:

a)    Prevailing in the locality

 The prevailing minimum fringe benefits for various trade classifications in the locality become the minimum fringe benefit determination. This is based on the fringe benefits being paid at the time the determination is made. The information is usually taken from surveys in the area conducted by the Bureau of Labor Statistics, Department of Labor, and other Labor Department employee.

b)    Collective Bargaining Agreement

This determination is based on the CBA of the predecessor contractor. Each determination is limited to the specific contract that follows a contract wherein the contractor has entered a CBA.

How are the minimum wage rates for each benefit determined?

Wage determinations generally have provisions for vacation and holiday benefits prevailing in a certain locality. The determination also has provisions on the prescribed minimum rate for benefits that are not required by the law, such as insurance and pension.

The minimum for all benefits, excluding holiday and vacation, are phased in a four-year period. In the first year, the minimum will be $0.90 per hour plus one-fourth of the difference between $0.90 and the prescribed minimum rate. In the second year the rate will increase by one-third of the difference between the resulting rate for the first year and the prescribed rate. During the third year, the rate will increase by one-half of the difference of the resulting rate in the second year and the prescribed rate. In the fourth year and the succeeding years, the rate will be the prescribed rate.

If a single fringe benefit rate is paid to the majority of prevailing wage workers under the same trade classification, within the same locality, that rate will prevail. Normally, prevailing wage workers receive the same fringe benefits are subject to collective bargaining agreement.

Most contracts contain a prevailing fringe benefit rate of $2.56 per hour. This rate shall continue to be issued for contracts that indicate the rate of $2,56, as well as other successor contracts, until the determined fringe benefit rate as described above will equal or exceed $2.56 per hour.

Are you a prevailing wage contractor? Partner with ARCHER JORDAN for Your Compliance with Prevailing Wage Laws on Fringe Benefits!

Keeping in mind all the provisions of the prevailing wage laws with regards to fringe benefits can crowd your busy mind. ARCHER JORDAN is a third party benefits administrator who has been in the business for decades. We design well thought of bona fide fringe benefit plans that satisfy not just Service Contract Act and Davis-Bacon Act compliance, but they will also satisfy your prevailing wage workers’ needs.

Call us today, and leave the fringe benefit plans of your employees in our capable and reliable hands.

5-Easy Steps to Fringe Benefit Compliance

In this FREE guide we’ll show you how to create a fringe benefit plan that secures your business



AD & D
Affordable Care Act
AK Prevailing Wage
AL Prevailing Wage
AR Prevailing Wage
AZ Prevailing Wage
CA Prevailing Wag
CA Prevailing Wage
CA Prevailing Wage 401k
Call Centers
CO Prevailing Wage
Compliance Tips
Critical Illness
CT Prevailing Wage
Davis Bacon Act
DE Prevailing Wage
Department of Labor
Disability Insurance
Employee Benefits
Employee Training
Employer Tips
Farm Labor Plan
Fixed Indemnity
FL Prevailing Wage
Fringe Benefits
GA Prevailing Wage
Government Contracting
Government Contractors
Health and Welfare Wrap
Healthcare Benefits
HI Prevailing Wage
Hospitality Benefits
Hourly Seasonal Workers
Hourly Workforce
Human Resources
ID Prevailing Wage
IL Prevailing Wage
IN Prevailing Wage
IO Prevailing Wage
KS Prevailing Wage
KY Prevailing Wage
LA Prevailing Wage
Limited Medical
MA Prevailing Wage
Major Medical Insurance
McNamara-O’Hara Act
MD Prevailing Wage
ME Prevailing Wage
MI Prevailing Wage
MN Prevailing Wage
MO Prevailing Wage
MS Prevailing Wage
MT Prevailing Wage
NC Prevailing Wage
ND Prevailing Wage
NE Prevailing Wage
NH Prevailing Wage
NJ Prevailing Wage
NM Prevailing Wage
NSRMCA Members
NV Prevailing Wage
NY prevailing wage
OH Prevailing Wage
OK Prevailing Wage
OR Prevailing Wage
PA Prevailing Wage
Part Time Employees
Podcast Guest Appearances
Prevailing Wage
Prevailing Wage Workers
Restaurant Group Benefits
Retirement Plans
RI Prevailing Wage
SC Prevailing Wage
SCA Audits
SCA Compliance
SD Prevailing Wage
Seasonal Workers
Service Contract Act
Small Business
State Prevailing Wage
SUB Plan
Supplemental Benefits
Supplemental Unemployment
Third Party Administrator
TN Prevailing Wage
Trust Services
TX prevailing wage
UT Prevailing Wage
VA Prevailing Wage
Violations – SCA
Voluntary Benefits
WA Prevailing Wage
WI Prevailing Wage
Workplace Health
Workplace Safety
WV Prevailing Wage
WY Prevailing Wage