The fringe obligation is a plan-design problem.
Under the Service Contract Act and Davis-Bacon you owe a health-and-welfare fringe on top of the prevailing wage. Paying it in cash is simple, adds payroll tax, and inflates every bid you submit. Contributing it to a bona fide retirement plan does neither.
We design plans that take the fringe as a nonelective contribution — documented, allocated by contract and classification, and defensible when a Wage and Hour investigator asks how each hour was credited.
Four things a contractor plan has to do.
Fringe paid into the plan avoids the FICA and workers-comp loading that cash-in-lieu carries — real margin on a labor-heavy contract.
A lower fully burdened labor rate on the same prevailing wage improves your price without cutting anyone’s pay.
Hour-by-hour allocation records, plan documents, and deposit timing that hold up in a Wage and Hour investigation.
Service-covered employees, exempt staff, and several contracts in one plan with correct separate accounting.
Where contractor plans fail an audit.
Wage and Hour looks at the same handful of things every time.
To count as a fringe credit the plan must be irrevocable and communicated to employees. Discretionary arrangements don’t qualify.
Fringe must be credited per hour worked on the covered contract. Averaging or annualizing across contracts is a finding.
Mixing cash and plan credits across pay periods without records makes the whole fringe hard to substantiate.
Successor contracts, seniority lists, and CBA obligations shift eligibility mid-year and get missed constantly.
The levers we pull for contractors.
The health-and-welfare fringe flows into the plan as an employer contribution, tracked by hour and by contract.
Covered and non-covered populations allocated separately, so office staff design isn’t driven by SCA rules.
Allocation reports, plan documents, and deposit records organized the way an investigator asks for them.
Letting the fringe contribution carry your testing.
A per-hour nonelective contribution to a broad service workforce is a powerful testing asset. Structured correctly it can support safe harbor status, relieve top-heavy pressure, and let owners and exempt staff take meaningful profit sharing — so the fringe you already owe does double duty instead of sitting in an arrangement that only satisfies Wage and Hour.
From first call to a plan that runs itself.
Field crews get the same service as headquarters.
Enrollment at the job site or on base, materials in plain language, and one-on-one meetings for employees at every classification.
See how we support participantsOther industries we serve.
Model the fringe two ways before your next bid.
Send your wage determinations and headcount by contract and we’ll show cash-in-lieu against a plan contribution, side by side.