PCCA Journal|4
th
Quarter 2010
18
Sample Calculation
Assume XYZ Broadband Company has 15 employees
doing prevailing wage work. These employees work
approximately 1,000 hours each per year. The fringe
amount above the base rate is $8/hour, and the aver-
age approximate additional payroll cost when paying
fringe dollars as cash wages is 25 percent.
15 employees X 1,000 hours = 15,000 total hours
15,000 hours X $8.00 = $120,000 in additional payroll
$120,000 X 25 percent = $30,000 XYZ Broadband
Company savings
Visit the interactive calculator at www.thecontrac-
torsplan.comto calculate your company’s potential
savings.
Ready for an Audit?
The Obama administration has hired hundreds of new
investigators to make sure that ARRA funds are being
accounted for properly. It is very important for contrac-
tors to prepare themselves for an audit and understand
the following:
Certified payroll responsibilities,
•
Hourly fringe benefit allocation(s), and
•
Correct labor classifications for workers.
•
Contractors intending to bid on ARRA-funded
projects should take steps now to ensure compliance
with the Davis-Bacon Act and other federal and state
regulations that apply. Look for a prevailing wage ben-
efits partner with experience in this highly-regulated
industry—the U.S. DOL and IRS have significantly
upped their workforce and, as a result, their oversight
of contractors receiving ARRA dollars. Using a firm
that understands compliance from the Wage & Hour
Division of the DOL, the various state prevailing wage
laws, and the many requirements for employee benefits
can give contractors the competitive edge to win bids,
especially in a crowded market with so much opportu-
nity.
John Allen, CRPS, is a regional vice president for Fringe
Benefit Group, an industry leader in prevailing wage
benefit plans for government contractors. Since 1979,
Fringe Benefit Group has helped contractors be more
competitive when bidding on government jobs by offer-
ing flexible benefit solutions that can significantly re-
duce a company’s payroll burden. Allen can be reached
at (512) 663-0709 or
jallen@fibi.com.ARRA and the Davis-Bacon Act
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