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What You Need To Know About the Prevailing Wage and the Davis Bacon Act
What you should note is that the prevailing wage was established by the federal law in 1931. The thing you should note is that it was set by the Davis-Bacon Act and it is used to mandate that the contractors and the subcontractors to pay their staff hourly prevailing wage when working on any federally funded contraction which is over $2000. The one thing you should note is that the prevailing wage is determined by the Department of Labor. They do this by looking into the wages paid by the workers employed under similar projects.
The aim is to make certain that the contractors to not low ball their proposal costs and underpay the workers. If this is the case, then you will find that the staff is going to get their fair share of the job. You should note that this is something that has extended to states as they try to ensure that ay state-funded construction follows the same act. However, you should note that the act is more than the hourly rates that the workers get.
What you should note is that this is something that is composed of two parts. The first part is where you will have the basic hourly rates being determined. The other part is the fringe benefits amount. The thing you should note is that this is something which is separated per hour dollar amount. The thing you should note is that it can be paid out as part of the workers’ wages or used in the funding of the bona fide. This is benefit plans like insurance, vacation, and even training programs.
The thing you should note is that as a way of making certain that they follow the law, most of the contractors will put the mandatory benefit wage in the salary. They do this as this is one of the easiest ways that they can be able to use to comply with the law. However, the thing you should note is that this is something which ends up costing the contractor more. The reason being that all the wages are paid to the employees are subjected to payroll taxes. If this is the case, then you will find that adding the benefits in the salary will lead to an increase in tax payments.
On the other hand, if a contractor uses the money to find a bona Fide, then you should note that this is something that will not only benefit the staff, but he will also gain. The reason being that this is the payment will lead to there being an exemption from the payroll taxes. If this is the case, then you will find that the contractor will end up saving on cash. If this is the case, then you will find that this is ideal for the people who are doing the construction. What you should note is that when you do incorporate the prevailing wage, then this is something that is bound to benefit you a great deal.