Hour Banking for Prevailing Wage Contractors

Hour Banking for Prevailing Wage Contractors-Paying for fringe benefits by the hour

Prevailing wage contractors face many unique challenges in the public construction field, not the least is managing a seasonal workforce and taking proper credit for employee benefits.  There are many challenges to taking proper credit for a monthly benefit with an hourly compensated worker including;

  • Overfunding created by overtime hours.Hour Banking for Prevailing Wage Contractors
  • Employer not taking enough credit with fringes.
  • Can only take credit for some hours.
  • Project delays and seasonality can cause workers to be without coverage when they need it most.

Hour banking is a great solution for these contractors with many critical advantages.

Hour banking is an accounting method that allows the contractor to change a monthly benefit into an hourly benefit to produce critical compliance to Davis bacon laws simply as well as in many cases save the contractor money from possible overpaying of benefits.  In addition the hour bank will allow the contractor to bank fringe dollars during the busy season to pay for employee benefits during the slow times when layoffs often occur.  Paying benefits by the hour means you’re not paying “full-time” benefits for your employees during less productive seasons of the year.

Hour banking also will reduce administrative work by doing the math for you.  No longer will you need to calculate all of the benefits paid for each job class separately and check your work at years end for any cost shortfalls or overages.

  • Employees accumulate hours of work credit for excess hours worked.
  • The possibility of ineligibility under traditional programs is eliminated.
  • Employees are protected during layoffs.
  • Employees may bank up to 7 months of health benefits.
  • Avoid “actively at work” problems
  • Employers pay for actual hours worked, guarding against overpayment of premium.

Every contractor is unique in the type of work they do and the workforce they employ.  For the best outcomes, it is best to understand this part of the company.  From here minor adjustments can easily be made as each new project and plan year progresses.

 

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