A key to reducing fraud and safeguarding employees, the term “bona fide” appears quite often in the Davis Bacon Act, with respect to fringe benefits. In order for Davis-Bacon benefits plans to be considered “bona fide”, they must be under the operation of an independent, third party administrator who is beyond the control of the employer AND subject to the scrutiny of the Department of Labor.
If your benefits plan does not meet the requirements per the Davis-Bacon and Related Acts, then there is a possibility that it may not meet the standards of being "bona fide." If you are uncertain whether your plan is "bona fide", you should seek the advice of competent legal counsel.
Yes! Failure to provide "bona fide" benefits can result in compliance issues with a variety of Federal and State Agencies.
It depends. To know for certain, you should seek competent legal advice.
No. The term "bona fide" does not refer to the cash (or wage) component of the prevailing wage rate determination
Regardless of whether you are doing federal davis-bacon prevailing wage, or state prevailing wage, failure to provide employees "bona fide" fringe benefits can have significant economic consequences for you in the form of fines; and, in dire cases, sanctioning.
Participation can be mandatory so long as prevailing wage fringe money is enough to cover the cost. In the event that the cost of the benefit is higher than the amount of fringe money available; at that point, employee participation becomes voluntary.
Yes!"Bona fide" benefits, including those for prevailing wage, may be either contractor-financed or a joint contractor-employee contributory plan.
One of the provisions specified by the Department of Labor (and applicable to all prevailing wage contractors) is that "the provisions of a plan, fund, or program adopted by the contractor, or by the contract as a result of collective bargaining, must be specified in writing, and must be communicated in writing to the affected employees."
Believe it or not, the Department of Labor does address this question - and the answer is no. The fringe benefit portion of the prevailing wage rate determination must go into a "bona fide" benefit, and travel perks do not count.
Per the Department of Labor website: "Unfunded, self-insured fringe benefit plans (other than fringe benefits such as vacations and holidays which by their nature are normally unfunded) under which prevailing wage contractors allegedly make ``out of pocket'' payments to provide benefits as expenses may arise, rather than making irrevocable contributions to a trust or other funded arrangement as required under Sec. 4.171(a)(4), are not normally considered ``bona fide'' plans or equivalent benefits for purposes of the Davis-Bacon Act"
