How non-union contractors
can be more competitive when bidding
on Davis-Bacon Act or McNamara-O'Hara Service Contract jobs
If you are bidding on Davis-Bacon or McNamara-O'Hara Service
Contract jobs and the prevailing wage is higher than you normally pay, there
are steps you can take to become more competitive. The prevailing wage is
broken down into two sections – the base rate and the fringe benefit
rate.
Most non-union contractors will add the two rates and pay it to employees.
They then have to pay Workers’ Compensation, payroll taxes, social
security taxes, etc. on the total. However, if they take any or all of the
fringe benefits portion and purchase bona fide fringe benefits on behalf
of their employees then that portion is moved out of the payroll burden.
While this rule applies in most states, Pennsylvania has different and possibly
favorable rules regarding fringe benefits. Given the details of the differences,
please contact us to discuss. |