The Benefits of Providing Prevailing Wage Workers with SUB Plan
Know more about the Supplemental Unemployment Benefit Plan
A SUB Plan, or supplemental unemployment benefit plan, is a fringe benefit plan provided to prevailing wage workers. These plans provide compensation to employees, on top of the state unemployment insurance, in the event of layoffs, shutdowns, work delays, and weather conditions that disrupt work continuity, among other valid employment interruptions. SUB plans benefit both employees and employers.
Elements of a SUB Plan
1. SUB plans are only payable to unemployed employees (laid off, involuntary separation which can be permanent or temporary, reduction of hours of work). The benefit will cease to be payable when the employee returns to work.
2. Payable benefits are based on state unemployment benefits, other compensation under state laws, and the amount of weekly pay.
3. In return for the SUB plan, an employer cannot require his prevailing wage workers to perform any services.
4. It cannot be paid on a lump sum.
Benefits of a SUB Plan to Prevailing Wage Workers and Employers
Prevailing Wage Workers’ Benefits
1. A SUB plan provides prevailing wage workers enhanced income in the event of unexpected unemployment or reduced working hours which can result to lower income.
2. A SUB plan can reduce a prevailing wage worker’s financial and emotional stress during layoffs, and can give them peace of mind, as well as assure you of their loyalty.
Prevailing Wage Employers’ Benefits
1. Payroll taxes, such as FICA and SDI are deducted from the amount of fringe from the paycheck.
2. SUB plans give prevailing wage contractors the benefit of a more competitive bid.
3. SUB plans can give you more savings and profits, as you pay less taxes and less insurance premium.
How You Can Pay for your Prevailing Wage Workers’ SUB plan
Most contractors choose to provide supplemental unemployment plans through a valid and bona fide trust fund. The trust fund must meet necessary requirements for it to be exempted from taxes. It must also be executed in a written document by the contractor.
Contributions to these plans can be credited under the prevailing wage fringe benefit requirements of the Davis Bacon Act, Service Contract Act, and state prevailing wage laws.
Work with ARCHER JORDAN for your prevailing wage workers’ SUB plans!
Providing your prevailing wage workers a SUB plan as part of their fringe benefits is beneficial for you and your employees. Not only does it give your employees peace of mind, it also assures you of their loyalty.
The state requirements and laws that govern both supplemental unemployment benefit plans and prevailing wage laws can be tricky and complicated. To effectively administer your prevailing wage workers’ fringe benefits, work with ARCHER JORDAN, a trusted third part benefits administrator.
ARCHER JORDAN can help you create the perfect benefits plans suited for your employees, to make you a more competitive and attractive employer. Contact us today and let us show you how you can save thousands of dollars, while giving your employees the best plans for their needs.