Monday, March 11, 2013

Washington Adopts Policy on Calculating Hourly Rate for Fringe Benefits

The Washington State Department of Labor and Industries issued a policy statement on February 28, 2013 offering guidance on how fringe benefit contributions, as part of prevailing wages paid to construction workers on public works projects, should be calculated and turned into an hourly wage rate.

Affects contractors and agencies:  The policy is important for both contractors who must ensure they are in compliance with prevailing wage requirements, and public agencies responsible for monitoring prevailing wage requirements, especially on federally funded public works projects.

Summary of new policy:  The new policy defines fringe benefits, and notes that the hourly amount of fringe benefit contributions should generally be apportioned based on the actual hours worked over a one year period.  Here's a quote from the summary of the policy:

Usual benefits are credited on an hourly basis and are expected to accrue at a regular rate.  Employers many not count benefits associated with public and private work as if they were only associated with public works projects.  L&I will generally apportion or annualize benefit contribution or costs to all hours worked over the course of a year unless an employer provides an alternate schedule and can document hours worked.  Certain defined contribution pension plans (DOL exception) do not need to meet this annualization requirement.
Read the policy:  Click here to read the new five page policy
Mike Purdy's Public Contracting Blog 
© 2013 by Michael E. Purdy Associates, LLC

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