Our objective is to remove the fringe portion of the prevailing wage from payroll and place it into meaningful employee benefits.
We lower job costs and give employees security and continuity of pay.
All plans are funded solely from the fringe portion of prevailing wage jobs.
All plans enjoy favorable opinion status from the IRS and US DOL
Our “bona fide” options can be implemented separately or in combination.
Our “Accounting Integration” service makes sure the cost savings we project are always realized.
Contractors Prevailing Wage
Insurance Services
1620 Alpine Blvd., Suite #208 Alpine, California 91901
800-935-0041
619-445-3472 fax E-mail Us
A concern in designing a plan of insured benefits, where there is a substantial possibility of seasonal layoffs due to weather, or job lags or any other event that causes employees to be laid off, is maintaining these benefits during the down time.
“Hour Banking” fixed monthly costs is one of the tools that can be used in the fringe dollar allocation process.
A contractor doing a high percentage of his overall volume in prevailing wage activity, which has predictable layoffs during the calendar year, will encounter the usefulness of “Hour Banking” to set aside monies to cover insured costs during periods of employee layoffs.
In an Hour Bank program, the various fixed monthly costs of certain fringe benefits, .i.e. medical, dental and life insurance, are converted from the monthly cost format of an insurance carrier, into an hourly cost. The hourly cost components are set, so that when an employee has worked a given number of hours per month (i.e. 130, 140 or 150), they will have funded the required monthly premiums to the insurance carrier.
The hourly cost of a 130 Hour Bank program is more than a 150 Hour Bank program. The logic of this is very simple; the monthly premium from the insurance carrier is a fixed amount for a period of time. To accumulate the fixed amount of money with a fewer number of hours, requires a higher hourly figure; as opposed to accumulating the same amount of money over a larger number of hours, which would require a smaller hourly rate.
The advantage of using a 130 Hour Bank versus a 150 Hour Bank, is that an employee will tend to accumulate hours in his “Hour Bank” for use during times when he is laid off between jobs. For example, with a 130 Hour Bank, if an employee works 160 hours per month, every month he is accumulating 30 additional hours in his Hour Bank. These “banked hours” can then be used to pay fixed monthly premiums when the employee is not working.
The employers’ responsibility each month is to report the number of hours an employee worked on prevailing wage jobs (this is already done through the certified payroll reports required by the Department of Labor.) The Trust Administrator will then bill the employer the hourly costs based on the number of hours reported on these certified payroll reports.
Some of the Trust Plans we represent, fix the hourly rate and they are not changeable by the employer. Other Trusts, allow flexibility for the employer to make the hourly rate determination.
For a contractor doing less than 80% of his overall work volume in prevailing wage activity, there are other ways to take credit on your certified payroll reports for the prevailing wage hours worked. For a better understanding of these methods please make inquiry with the staff at CPWIS and we would be happy to assist you.
