Fringe benefits: plan, cash, or both

The fringe rate on a wage determination isn't a suggestion.

It's money the worker is owed every hour, and you have two ways to pay it.

Into a plan, or into the paycheck.

Most contractors do some of each.

This determination says eighteen forty an hour in fringe.

Say you pay eight hundred fifty a month for this worker's health insurance, and a dollar twenty-five an hour into a 401k.

The question is how much of that eighteen forty those two plans cover.

Here's the part that trips people up.

The health premium covers the worker on EVERY job they work, public and private.

So you divide the yearly premium by ALL their hours for the year.

Twenty eighty, not the nine hundred on this project.

Ten thousand two hundred a year, over twenty eighty hours, is four ninety an hour.

Divide by project hours instead, and the same plan suddenly looks like eleven thirty-three.

That's the finding.

You've charged the public job for benefits the private jobs earned.

The rule is called annualization, and it's in the regulation.

Four ninety from health, a dollar twenty-five from the 401k, six fifteen of credit an hour.

The determination wants eighteen forty.

So twelve twenty-five is still owed, and it has to be paid as cash, on every hour.

For a forty-hour week, that's two forty-six to the plans, in column 6B, and just under four ninety in cash, in column 6C.

The cash goes in the worker's gross and their paycheck.

The plan money doesn't.

It's listed on page two instead.

Which brings up the last step.

Every plan you take credit for goes in box 5 of the Statement of Compliance.

Keep the plan document and the remittances.

That's what an investigator asks for.

Divide plan costs by all hours, pay the rest in cash, on every hour.

The calculator's free at certified hours dot com, and the payroll editor carries your plan credits week to week.