Can I Sign Kentucky Banking RFP

Can i industry sign banking kentucky rfp

okay we're going to get started thank you for joining us this afternoon on the prevailing wage basics topic we have a lot of good information i think to share with you today and hopefully you find that it's very beneficial i am marie marx and i am with sikich we are hosting this webinar for you today and todd if you want to move to the second slide so sikich does retirement plan services some of you may know that many of you may not but we build and retain strong competitive workforce uh for you that is the biggest thing we're seeing right now that if you don't have a really strong competitive workforce it makes it difficult to attract and retain people especially in your sector of the markets right now and with that we also provide the um behind the scenes we do everything that you need to make sure your plan is in place what we like to do is um sit down and find out what is um the things that you most need and then structure it around so everything is is customized and geared toward each individual company and plan that we work for use me as a resource if you have questions even if you have a plan and you're just not sure about something please feel free to reach out to me and i'd be happy to to help you and answer anything for you we have todd kickle who is an expert he is with beneco he is the east coast sales consultant and he is one of the experts in this field which is why we wanted to bring him to you today with that i'm going to turn it over to todd there is um a chat thing box on the side so if you have questions as we go along um just put them in there we may get to them as we go along we may hold them for the end depending on the sequencing or timing and then there are also handouts you'll see a thing on the side and it says handouts there are five handouts for you that you can download at any time during this presentation with that i'll turn it over to todd perfect well thanks marie thank you so for having me i want to thank sikkid she was a partner with medico uh for sponsoring this event as well as everyone at the abc organization uh much appreciate you taking the time to join us today um typically i would be doing this in person which is what i'd much rather prefer out there in the great state of indiana but unfortunately based on our circumstances over the last few months i'm doing this remotely so what i'd like to do real quick if we can start off with the poll just like a little bit of an idea of who my audience is today is what percentage of prevailing wage work are you currently doing today wait here for a moment while that comes up and give you a few seconds to answer all right and the results about 40 uh roughly 25 to 50 percent uh we had 20 in the zero to 25 and then 20 and 75 or more so pretty consistent with what we typically see at veneko um i would say our average client is right in that mid uh 50 40 50 60 range so appreciate you taking the time to fill that up for me now what we will be discussing today is a agenda that will typically uh go over real quickly who is beneco what it is we do i know marie had a chance to mention sikich one of our partners uh we'll talk a little bit on the davis bacon act who and when does it apply we'll review wage determination sheets and talk a little bit more around fringe dollars and then we'll close with a little bit on certified payroll an area where we typically get a lot of questions as well as overtime calculations and at that point we'll open it up for q a is marie mentioned uh feel free to send questions you have within the chat box uh either marie can interrupt me as they come through or we can address them all at the end of the presentation so once again thank you for taking the time to be with us today so who is beneco beneco is a trusted name and contractor benefits we've been in this space now for over 30 plus years with clients across the united states we are one of the largest providers of group retirement and benefits solutions working exclusively with contractors it would be remiss if i didn't mention there excuse me in the bottom right corner you'll see future plan by a census we were acquired by a census out of dresher pa back in august of 2019 for those of you that are not familiar with the census a census is the largest independent record keeper of retirement and college saving plans here in the united states beneco falls under its future plan umbrella which is the largest independent third party administrator in the united states so we were brought into that umbrella based on our specialty within the construction or contractor industry what is it that we offer at benaco we offer our services that include record-keeping third-party administrations and benefit consulting we have all types of solutions that we can focus on to make sure that we're fully taking advantage of the fringe dollars that are available uh we'll start with retirement we have a 401k product and as marie mentioned we also have some open architecture that we can work with at the second side of the business we have life insurance benefits we have ancillary benefits as well as human resources on the ancillary benefits thank you traditional medical dental vision long-term disability short-term disability etc we can help you in all of those areas that being said because we're the experts within the construction space all of our solutions are built to accept fringe dollars and we'll get into a little bit more about what that entails so what exactly is the davis-bacon act the davis-bacon act is the federal law that requires contractors and subcontractors to pay at least the local prevailing wages you're subject to these are subject to federally funded projects as well as state and local funder projects where applicable if you can see at the map below uh indiana and kentucky um both repealed their prevailing wage laws so indiana in 2015 in kentucky in 2017 so you do not have state specific prevailing wage laws but that being said you still would fall under the federal davis bacon act when federal dollars are input into the project what exactly is that number it is two thousand dollars so federal prevailing wage laws will apply on all federally funded construction contracts in excel in excess of two thousand dollars regardless if there's a state law in place or not so if there's a new highway built if there's a new federal building being built um or anything under those kind of in that category taking place in indiana with 2000 or more you would fall under the davis-bacon act and be subject to all of their regulations as we mentioned some state and locally funded projects based on the states in indiana and kentucky we do not have that currently in place who else would fall under prevailing wage laws service contract act could also uh who would that be so i think service contract is the support or service industry so not actually building or using their hands or mechanics but more in line with uh security um say a landscaping crew at the federal building in uh downtown uh those would be falling under the security the uh service contract act and would also have to apply prevailing wage so who does the prevailing wage laws apply to and who do they not apply to uh laborers and mechanics and qualifying projects whose duties are manual or physical and labor or in nature i should say absolutely would be subject to prevailing wage the site of work is defined in the dol prevailing wage resource book but for most people and in most cases for davis bacon act cited work is where the project is to take place so when you're filling out your bids for the federal project it'll say for a library or for a federal building at this location that location is the site of work anything done off-site prefab or anything miles away from where the site of work is would not fall under the preview of dol prevailing wage resource books so the site of work is actually where the job is taking place and only where the job is taking place if they had a batch plan adjacent to that site that would qualify for the workers there but anything outside of that does not fall under prevailing wage who is exempt owners administrators employees and truck drivers and in most cases some states are not changing the rules around truck drivers but if they are simply bringing materials to the site they would not fall under prevailing wage so what exactly is a wage determination sheet how do we figure out what we're going to pay our employees if they are on one of these federal davis bacon jobs so what is a wage determination it's the regulation that establishes the prevailing wage and fringe benefit for a work class in a geographic area where do you find determinations online right there's the website beta.sam.gov there's a ton of great information on that website but you can literally go in search under state so indiana pick out the county once you pick up the county it'll give you a list of all the different job classifications and what the rates would be from county to county they will vary what i've seen in a lot of areas is obviously closer to major cities you tend to see higher wage determination sheets simply because the cost of living tends to be a little bit higher in those counties than when you get further out from the major metropolitan areas they will vary based on geographical location how are the rates determined that's a question i get quite a bit um in most cases what will happen is the dol will send out a survey to all contractors in a particular county and they will also send it to the local labor unions um and what will happen is they'll take a bunch of these surveys back in average them out and whatever the average rate in that particular county is becomes the prevailing wage for that county key things to remember when looking at a wage determination sheet there can be significant differences between regions uh one example i always give when people say well explain to me exactly i mentioned before the cost of living in different metropolitan areas versus a little bit out more in the rural areas but think of putting a highway in and if you're building a highway and sometimes they cross county lines you could actually have different rates between different counties that you need to pay the workers on depending on what part of the road they're working on other things to remember is you could have one or multiple wage formations assigned to one project as i just mentioned uh think of a highway going between counties the one thing and i just actually got a question from a lady that was on one of my presentations last week um she was wanting to know what happened that they've been increasing their prevailing wage as they have updates to the wage determination sheets so let's think we're beginning a job in october november of 2019 and on january 1 the new rate wage determination sheet comes out do i need to update my payroll to the new wage determination the answer is no not under the davis-bacon act once it is assigned it stays in effect for the duration of the project so a question we get a lot but wanted to remember that once the wage determination is assigned and there's a couple variances to that for some reason if the job doesn't start on time they can potentially give you some time to update it but typically once the rate is assigned that is the rate for that particular job here's an example so i looked in the fort wayne area and some of the counties so adams allen dekalb huntington noble these would be the rates and i just picked one of them that i saw off of sam.beta.gov and that was for the bricklayer stonemasons we'll use them as the example your base rate based on this wage determination example would be 30 and 37 cents and it would come alongside with that with 16.23 infringe benefits we're gonna get into a little bit deeper conversation here further on about the difference between the base rate and the fringe rate uh but one thing i do want to mention that this wage determination sheet does not show is that you'll see in some cases where the fringes are actually broken out in this case let's say we'll use the 1623 and i'll make that simple for myself uh it'll say 6.23 has to be used for medical five dollars for 401k three for an hra and two for short-term disability um that is just a guideline based on the surveys that they receive back the people that filled out the survey that is how they are distributing their fringe dollars so it's just a guide post as long as you pay the base rate and the fringe rate combined in this case doing quick math where we got 36 oh 46 60 would be what you'd need to pay to be compliant any combination of the the base rate and the fringe will keep you in compliance with the dol so you could technically offer 25 uh in base pay and put the remaining into benefits if you would like so that's another thing that we come across a lot and get a lot of questions on is do i have to follow wage determination to a t the answer is no what you do need to do is make sure that whatever the wage determination says as far as the rate infringes combined that is what you're paying your employees in the field on that particular job that'll keep you compliant and before we jump into the four legal uses of fringe dollars i was going to go to our second poll here to see what we just talked about what percentage of you are paying the fringe in cash right now versus using cash for cash and benefits and then finally using 100 of the french dollars to pay into benefits i will pause for a minute as we fill out the survey i think the results should be coming in here perfect it looks like about 25 are paying in cash 25 use 100 of the fringe which is great and about uh 50 use a combination of cash and benefits which is what we typically see uh today in today's market is wanted to get some of that cash in the hands uh of the employees but utilizing some of it obviously for fringe benefits and i'll explain why uh that becomes important here in a brief minute so what exactly and thank you for taking the time to fill that out for us so what exactly are the four legal uses of fringe dollars well we touched on briefly earlier as bennett goes lineup of solutions but pension and retirement is the first one i think 401k health and welfare ancillary benefits your major medical dental vision as we mentioned before insurance products as well as disability etc qualified approved apprenticeship programs the good news is we can set some of that money aside using a lot of our local abc chapters that have approved apprenticeship programs indiana because we do not have state prevailing wage law does not require it some states will actually require a portion of every french dollar to go into an approved apprenticeship program for training and the last option that we have of the four legal uses for fringe is vacation on holiday i will pause here for a moment because the one thing with vacation on holiday and we'll get into the tax consequences here in the next few slides vacation holiday is a way to take credit for the fringe but as we pay it back out into the paycheck it does become taxable so it's a temporary way to take a tax reprieve from the fringe dollars going through the paycheck is by putting it into vacation and holiday which is also a solution that we offer at beneco so before we get into those equations understanding fringe benefits what is exactly a fringe benefit well we just went through a little bit earlier but it's under the davis bacon act the term wages scale wages and prevailing wages that include the base hourly rate of pay and any combination made to a trustee or third party pursuant to a bona fide fringe benefit fund plan or program so again what we just mentioned before paying it through wage or through a benefit program that goes through a bona fide fringe benefit and the methods of doing that are exactly what we just talked about cash wages or a fringe benefit to the covered employees now a word that was used here twice is bona fide benefits so what exactly is a bona fide trust again there's the location the dol book that we had some free time and wanted to uh put ourselves to sleep we could read and get a little bit more on what exactly a bona fide trust is but there's really key three key criteria that you need to make sure y u're following one implementing these programs one is that the fringe benefits must be made to a trustee and or third person irrevocably the key with davis bacon and staying compliant with the dol is that as we talked before on that determination sheet the base wage and fridge combined needs to go to the benefit of the employee how do we keep our contractors compliant well if we keep that money off of their operating budget and put it immediately into an irrevocable trust for the benefit of the employees a lot of that confusion goes away and there's not an opportunity for that money to be spent on projects or things that it wasn't initially intended for so that's the first requirement of a bona fide trust that needs to be set up with a trustee and made contributions irrevocable the third person that we use is our trustee must not be affiliated with the contractor or subcontractor and that's simply just to uh eliminate any conflicts of interest and then finally the fiduciary responsibility of a trustee must be found and applied based on applicable laws meaning they have to follow and be a true fiduciary for the employees that they're representing so now here we can dig a little bit deeper into what i was mentioning earlier on what exactly is the base wage infringe benefits and what was that talking about when i mentioned saving some of that labor burdener taxes we at beneco call labor burden a roughly 30 addition onto your wages so again prevailing wages combined of two parts the base and the fringe and then we have to pay taxes on top of that so the taxes include your fica your federal unemployment state unemployment workers comp and general liability premiums will also go up with an increase in payroll so it's a benefit not only for us to avoid the taxes but also to lower our workers comp and general reliability premiums by utilizing those fringe dollars into a benefit versus paying them out in cash what does this look like let's look at an example paid on a check we'll use an example here of a thirty dollar base wage and a twenty dollar fringe benefit for a total of fifty dollars as i mentioned labor burden around around thirty percent if we had fifty dollars was all being paid in the paycheck we'd have to apply that thirty percent on top of that fifty dollars we'd have an additional labor burden of fifteen dollars per hour or a total of 60.5 an hour in total labor cost which tells me two things one that's the cost we should have bid on the job which on a lot of cases i've come across people that say i don't make any money on prevailing wage a lot of it is because they didn't figure in the labor burden the taxes that would be due on the full dollar amount but more importantly we'll see in the next example is this is what traditionally a lot of people will bid on their contract is a full bid meaning i put in everything in the paycheck but if we used a bona fide trust to do the benefits we can see below that we can save ourselves six dollars of that 15 in labor burden why because we can't avoid the 30 on the base wage that's still going to hit the paycheck which would be nine dollars but we can avoid the six dollars on the twenty dollars in fringe benefits what does that do it lowers our overall bid cost now to fifty nine dollars an hour in total labor so not only are we going to be able to bid lower so any time we're going up against somebody as we saw those results right one is paying 100 out in cash um they're going to have the higher bid price or at least they need to go with a higher bid price the one using 100 benefits is going to have some flexibility to come in anywhere below 65 an hour and have an opportunity to win that bid so it's important that if we're looking to win new business within davis bacon that we're also not only lowering our overall operating costs in our tax bill but giving us an opportunity to bid lower and win more business we take these examples a step further with an example so again we mentioned six dollars an hour in labor burden savings per employee and let's assume we were one of those typical companies as we mentioned that works about 50 in prevailing wage we typically will look at a 2080 hour work year so if we're doing 50 prevailing wage that would tell me that we're doing roughly 1040 hours in prevailing wage work times that six dollars an hour would give us a grand total of six thousand two hundred and forty dollars per year in operating cost savings by just utilizing those fringe dollars instead of putting them through the paycheck if we had 25 field employees that would be over 156 000 in operating cost savings in one year so quite significant take that a step further that fringe dollar amount of twenty dollars per hour using that same thousand forty hours or fifty percent of a year in prevailing wage gives us twenty thousand eight hundred dollars a year to provide benefits for our employees times 25 field employees that's over five hundred and twenty thousand dollars to be utilized for benefits we at beneco call that free money that you're awarded by winning these bids and that's exactly what there's money to pay benefits for your employees by winning these bids so it can be quite substantial i i did see one of those that were close to 100 in prevailing wage that would be over a million dollars to provide benefits not only that we'd have over 300 000 in operating cost savings and one of the examples i always use when we're talking there is that we could use that 300 000 in operating savings to pay for benefits for our administrative and home office home office staff while still providing the same benefits for our field employees at no additional cost to the owner so it's a huge benefit to properly utilize these friends dollars for multiple reasons matter of fact here they are and we've talked about most of them as uh we've gone through this presentation but first avoid those payroll taxes on every french dollar paid into the trust take care of your team offer your team the benefits that they're looking for a couple little statistics when it comes to the contractor and construction industry over two-thirds of contractors do not have access to an employee sponsored retirement plan that's one of the number one things that they request when looking for a new employer and also out of the most dangerous occupations out there 18 out of the top 20 are in construction yet only 50 of contractors have access to health care from their employers so it's another thing that really when we talk to the individual employees that they're truly looking for the last aspect there is that you know second to last i should say is attract and retain key talent i don't think it's a secret to anybody out in the room today that contractors are struggling to get qualified talented laborers to work on their projects and matter of fact i know 40 percent of projects aren't even getting bid on because they don't have enough labor um to go out and bid on additional projects 70 of projects that are under away are behind schedule again due to a lack of labor so really to attract and retain key clients to keep them from jumping ship this is another great way through adding benefits and finally as we talked we went from 65 an hour to 59 it gives you the opportunity to win a lot more bids moving forward before i jump into the last slide the last few slides i should say which will go over a few of the products and then we'll touch on certified payroll as well as um the overtime question we have our final poll as i mentioned before two-thirds of contractors typically do not have access to an employer-sponsored retirement plan so i'd love to see from our audience today are you offering some type of employee year sponsored retirement plan and if so what is it is it a simple ira is it a 401k and again we'll pause for a few seconds here when that poll comes up and gets answered all right in the results it looks like about 25 percent offer a 401k 25 in a simple and about 50 percent do not offer um a retirement program within the program so fairly typical of what we see out there um the simple plans are one i know that people utilize a lot in the beginning as they're growing their businesses i will tell you that it has some limitations um when we get down to wanting to put bigger contributions away so if we do win more prevailing wage work and have more fringe dollars as we mentioned um the one thing i also haven't stressed yet is that the fringe benefits are an employer contribution not an employee contribution even though it's their money it's considered an employer contribution so we can't put up to 57 000 away in a 401k versus an individual without being below 50 can only put 18 0005 away so another huge benefit of the 401k over the simple simple plans are great the only other downside is it forces to make an equal contribution to everybody in the program but a great way i much rather see simple plans than nothing in place for our contractor clients so let's jump into some of the solutions i mentioned what are some of the benefits with beneco well the beneco retirement plan has three plans in one it's your 401k for all employees it's a prevailing wage plan for the fringe dollars as well as a discretionary profit sharing plan one of the things i tend to see when i travel with my contractor clients is they didn't do any prevailing wage work when they first started uh business so they opened up a traditional 401k and would let employees opt in if they would like to save for retirement and then one day came along where they actually decided to bid on some prevailing wage work and they contacted their current 401k and realized that the plan wasn't designed to accept prevailing wage dollars so in most cases what they would do is open a second 401k solely for prevailing wage and then unfortunately what you have there is double the administrative burden so ever in human resources or in the administration side of the business is now responsible for two plans in maintaining them as well as now you have twice as much in cost so one of the huge benefits of working with beneco and making sure the plan is designed properly is that like the simple we can make profit sharing contributions to all employees if that we've had a good year but we can accept the prevailing wage dollars as well as traditional 401k contributions from the employees so it's a huge benefit to lower the administrative burden and have the cost of only one plan in place with beneco on the health and welfare front we've touched on this briefly a couple things that i want to mention that is unique uh to the industry um i've been in financial services now for well over 25 years and had not seen it until i joined benneco and learned more on prevailing wage is an our banking solution um our banking in indiana and kentucky like ohio although not as much in kentucky because uh it's a little bit warmer the further south we go but we have a lot of seasonality and what i mean by that is we tend to have workers not doing much work in january and february which makes it difficult then if we put a major medical program into place to continue to pay that through the operating budget what our banking allows us to do is to take a portion of those fringe dollars while they're working on a davis bacon project and set them aside for when they might not be working on a davis bacon project or for when they might need to be laid off in january february and can pay for the full cost of medical at that particular time so it gives us the advantage of setting and a dollar or to an hour aside we can keep up the four months of premiums in an hour bank um so it's an another huge benefit um for being able to pay for major medical is by utilizing the hour bank and again that's very unique to the contractor industry and something that comes with beneco when when offering a major medical uh to your employees it's something that is included in the services that we provide as we talked also you have dental and vision life and disability i will mention the health reimbursement accounts we have been seeing a lot of those utilized as well as we mentioned for that example of using twenty dollars in fringe uh we can have a substantial amount of money that we need to put aside in that one example when we did fifty percent i believe it was roughly twenty thousand dollars per employee that would have available for benefits so let's say major medical is five thousand uh or five thousand five hundred a month times twelve months that'd be six thousand we'd still have fourteen thousand dollars left we could our bank some of that to pay for um premiums when they're not working um which would still be a total of six thousand we can add in an hra uh that will cover their deductibles which are typically anywhere from two to four we'll use the for example and that still leaves us ten thousand dollars left where we can fund a retirement program so a lot of different options when it comes to utilizing the fringe with beneco and sikich another thing i tend to want to focus on when talking with contractors is leveling wage disparity as we mentioned in most cases we saw i think the majority were between 25 and 50 percent uh in the prevailing wage space and one of the things i've heard from a lot of contractors is the conversation around the water cooler on any given friday when the paychecks comes out uh or the page that comes out is that private jobs tend to unfortunately not quite pay the same uh base wage or fringe amount total as those public jobs do uh public jobs tend to be a little bit more lucrative for not only the business owners but as well for the particular employees on those jobs so obviously it's something that a lot of people are going to say i want to be on the next prevailing wage job if you i have an opportunity to do so one of the things i mentioned to kind of take away that confrontation or that conversation around the water cooler on a friday when paychecks come out is to pay all employees the same base wage regardless if they're on a public job or a private job so let's use that example of 30 bucks everyone makes thirty dollars an hour regardless if you're working private or a davis bacon job the big difference would be if you're on the davis bacon job you get an extra 20 bucks in benefits so you're gonna have a little bit more of a richer 401k a little bit better maybe medical coverage um if if not at all medical coverage but um you will not have any difference in paycheck when it comes to friday and you're and you're looking at your uh and end result for the week so it's one thing that i recommend to a lot of my contractor clients to think about doing to level that wage disparity most companies do some combination of both private and public so it's a great way to eliminate that and again it eliminates that conflict you tend to see sometimes between employees and management so finally last two topic certified payroll on the overtime question let's see where we are in time perfect we're just about 35 minutes into it so i appreciate everyone's patience um what is certified payroll well certified payroll is that special report that must be filed on a weekly basis if you're doing a davis bacon act the certified payroll is a report of what actually happened that payroll week one of the things i hear or see from a lot of people is that they forgot an hour or two and they just added into next week's certified payroll uh that'll get you in trouble with the regulators uh they do not like that they would prefer you go back and modify last week's certified payroll and add in the missing hours uh versus trying to make the correction on this week's payroll so that is one key what is included on the certified payroll and we'll look at an example here in a few seconds you're going to see the name of the employee their id usually it's their four-digit uh ls4 their social security or some way of identifying your employees hours worked on the project class pay fringe deductions etc so here's an example of what one would look like this is the us department of labor so in indiana since we do not have a state prevailing wage this is the certified payroll form you would utilize uh across the top we would see the name of the contractor uh the address and hen we'd see the project location and number so right there just a sample project for demonstration and the contract number this this particular example is for week one of certified payroll so it's for the week ending june 29th of 2020. what we would do then is back date the certified payroll so you can see start with sunday at the 23rd and run through saturday the 29th which is the week ending period for this pre-roll we would list our individual laborers in this case we'll run through one of them i do offer a certified payroll seminar as well and it is something we get a lot of questions on so any questions you may have please again utilize the chat box and we can address them afterward or we can have a conversation after this webinar but we'll use jane doe in our example today jane is a pipe fitter she worked on a prevailing wage job monday tuesday and wednesday for a total of eight hours each day under the rate of pay you'll see she was her wage determination is for 18 an hour there was no fringe so that was everything was included in the base with that 18 was the fringe and the base wage that's a total gross earnings if we take 18 times 24 of 432 would then put down the taxes to keep math simple i just put town 10 for fight god 10 for all the other withholdings 10 for state 10 for city there is an other in jane's particular situation which we will see on the back of this certified payroll which a total of 50 in deductions subtract that from the 432 and you'll see the net wages we need to pay jane doe the only other differences in the examples below would be one of them has some overtime and you can see if we were paying fringe versus in the paycheck that the base and fringe wages would be kept separately on the back of the certified payroll this is the key this is where we're letting the government and the dol know that yes we did pay out the wages that were on the wage determination sheet to be compliant with your regulations in this case alex the boss is the president of abc contractors um again the date would be 6 29 we'd fill out the beginning of the week the 23rd through the 29th here we can see other deductions which is jane doe a borrowed loan from the owner of the business to buy some tools that she wanted for her own personal use he's able to deduct that back out of the payroll uh we can see the two key boxes when it comes to certified payroll box check a which is where fringe benefits are paid to approve plans funds or programs which would be through a bona fide trust or box b where fringe benefits are paid in cash in this case they're both checked what i typically recommend for my contractor clients is to check the predominant box and what do i mean by that that's you that twenty dollars again in fringe as an example if we're paying 15 in cash and five in a benefit i would check box b because we're paying more out in cash than we are in benefit and vice versa if we're paying 15 a benefit and five in cash i would typically check box a and the key is at the very bottom there in the lower right corner as alex the boss has to sign off on that and he is signing that he has paid his employees the wage determination prevailing wage rates for that particular project for that particular week so i know there's a lot there and again if you have questions please utilize the chat or or we can talk offline after this i'll i will give you my phone number marie's phone number and our emails as well at the end so how can you help yourself when it comes to certified payroll first things first make sure your accounting department recognizes that the regulations are real and they must be complied with so uh thinking that you know what they're not going to notice the difference they are real and they definitely will come after you if we're not following our certified pro payrolls as required by davis bacon other ways to help yourself we at feneco work with a lot of partners that have software that will set you up for success when it comes to certified payroll that'll actually download the wage determination sheets for your particular job right into the system so they can link it together with your payroll so it can be almost seamless when it comes to generating that certified payroll for you so if you have interest or would like to know more about some of the partners that we work with or who is out there in your neck of the woods that might be able to help with certified payroll please don't hesitate to ask and one thing you'll notice at the bottom is the the red flag 19 believe it or not of all certified payrolls have at least one error so again it's not uncommon to have an error just make sure that we go back when we catch it and and adjust it on the previous certified payrolls where that error occurred and that'll get us back into compliance we rather correct those errors and be compliant and wait for the doll or for someone else not to find us not to be compliant so a few questions when it comes to payroll certified payroll how often do i need to submit certified payroll well we mentioned it earlier it has to be done by davis bacon on a weekly basis so again how often do i need to process payroll or for filing certified payroll on a weekly basis those employees on a davis bacon act project have to be paid out weekly and then last but not least who can submit a certified payroll uh anyone in the office can submit the certified payroll to the dol like i said it takes a little bit of training and getting used to this form but once we're used to it we can submit it and then through using some of those partners like i mentioned a lot of it can be done electronically and signed off through an electronic signature so it really can be streamlined for you now into the last part before we open it up for q a is overtime calculations overtime must be paid as we all know on all hours worked over 40 in any given work week the base rate is the basis for which overtime is calculated what do i mean by that and we have an example below but the overtime rate must be 150 percent of the base rate you do have to pay out the fringe but the fringe stays consistent so in the example below if you had a base rate of 20 an hour and a fringe rate of five dollars an hour and we worked overtime that overtime first hour would be at thirty dollars an hour but the fringe would stay consistent in five there aren't handful of states if you do do any business outside of indiana or kentucky um two examples i can think of rough my top my head are pennsylvania and massachusetts if you actually pay the fringe in cash that also now figures into the time and a half rate um but that's again a small handful of states in indiana kentucky um if doing davis bacon the fringe would stay consistent you would only need to do 150 of the base rate on those base rate hourly uh payouts in this case the twenty dollars again an area i get a lot of questions so if you have any other questions you'd like to add or more clarity there please again utilize that check box so some final faqs we pay bi-weekly todd how do we prepare our certified payroll well you still need to pay it weekly and that's why i always recommend to contractors to utilize a weekly payroll system it will really help to enhance um your performance on these jobs because it won't be something that will change you don't have to switch from bi-weekly payroll to weekly back to bi-weekly um is that i would recommend switching everything over to a weekly basis um it's a little bit more work up front but then it becomes much more smoother going forward especially if we're working on davis basin davis bacon projects where do i account for travel time a great question unfortunately the answer is we already know what the four legal uses of fringe are and travel time was not one of them um so you would not account for travel time uh when filing certified payroll travel time would be at the expense of the owner if they want to pay out um the operating account you cannot use french dollars to pay for travel time um which fox should be checked for fringes we address box a and b depending on if you're using cash or if you're using benefits for the majority of the fringe dollars we've answered that one we use 1099 employees how does that work that's tricky it's absolutely allowed we can definitely have 1099 employees on the job but unfortunately because they're 10.99 and the outside of our payroll world we would have to pay them 100 of the fringe in cash so that you would not be able to take credit for any of those french dollars so you would incur that additional 30 labor burden for all of your 1099 employees so you can utilize 1099 but unfortunately we cannot take credit for the friends you'd be to be compliant you would need to pay out the full base and fringe to those 1099 employees a few more questions we pay our employees for their cell phone bill is that a fringe benefit well we stressed on travel time so um i'm hoping everyone in the audience gathered the answer that question is no company truck cell phone logo shirts barbecues any of those things that an employer might do for the benefit of their employees unfortunately does not fall under a use of fringe dollars so that would not qualify uh to be a benefit that you can take credit for under the davis bacon act last one all my employees are salaried how do i enter their information into the certified payroll uh let's go back to when we were looking at that earlier example of the breaking out the fringe and uh saving that six dollars in labor burden if you recall we talked about doing 50 prevailing wage work and that came out to 1040 hours so let's say one full year for a salary employee it's quite simple take their base salary divide it by 2080 hours and bam you've got their hourly rate if their hourly rate is above the wage determination sheet you're good to go just pay them that hourly rate and they're paying their salaries as and mark that hourly rate in the the certified payroll if for some reason when you do that calculation their salary puts them below the prevailing wage you'll need to increase the dollar amount so let's say their salary could submit 30 and the prevailing wage sheet shows 35 you'd need to bump up their hourly rate by five dollars an hour so simply take their salary divided by 2080 if we're good to go and it beats or exceeds the prevailing rage rate we're good to go if not we need to add incrementally until we meet that davis bacon wage determination sheet with that i will leave you with one uh thing here is that we offer through sickits and beneco is that all abc indiana kentucky members will receive 500 off the setup cost of a prevailing wage retirement plan with penaco just so you know typically that cost for anyone outside of abc and the few other associations that we're members of is 1500 so it's a it's a pretty substantial savings for everybody at abc and we do that because of our partnership with all of you and appreciate everything that you're doing out there for the contractor industry so with that i'd like to say thank you and then i will bring marie back on and see if we have any questions out there maria that i can address or anything that came in through the chat bar for the um oh i'm not sure how much of that you heard because i might may not have been um unmuted but thank you for um everything it was really good information um while we're waiting for the questions to come in can you tell us why right now is a good time to be doing the prevailing wage uh work sure absolutely it's a great question um what i've typically what we've typically seen in a beneficial unfortunately after recessions which we were in in march as you know march april i think we're we're really kind of starting to get out of the recession now it's just still going to be a long recovery um what we tend to see about 12 to 18 months out from the beginning of our session is that a lot of the private work tends to dry up and that the federal projects and the state funded projects tend to become a bigger part of people's business one example of that and it hits all too uh hard here at home for us is uh my significant other is in the hospitality industry um as we all know hospitality has been hit dramatically hard uh by the crisis that we've been in over the last six months um but a little known fact we had the biggest build out of new hotels in the united states over the past two years so i'm sure most of you that have traveled have noticed that it seems like everywhere you go there's a new hampton inn a new holiday inn they were all popping up new marriotts new hilton's everywhere um i would think it's safe to say i can't imagine there'll be a huge construction boom in hospitality over the next couple years so businesses that were thriving based on those types of private jobs we'll be looking for other areas and other ways to keep their employees working what we tend to see is about 12 to 18 months out as that work dries up that the federal government and the federal jobs become more and more prominent for those that were winning those prevailing wage jobs bidding full price because they didn't have a lot of competition because of the lack of labor out there we'll start to see some competition so getting yourself positioned for success with good bona fide benefits and utilizing the fringe properly today can set you up for success middle of 2021 going forward the other key there is is we've been hearing for the last gosh i feel like three four five years now of this trillion dollar plus infrastructure bill that's going to come uh one of these days i truly believe we will see something um that will come that will be there similar to that and for those that are set up and have their business models ready to uh win that business uh will be quite successful so i think there's no better time than now to get your businesses set up properly for success uh specifically in the current environment is i know balance sheets have been tightened dramatically and operating budgets have been shrinking so again we want to make sure we have as much money available so by properly utilizing that fringe we can free up potentially as we saw in those examples hundreds of thousands of dollars of operating expenses to kind of get us through some of those leaner times so there's no time now better than now marita to really utilize those french dollars and get the proper programs put into place okay so we have one question do we have to offer a company match great question and you do not so as i mentioned before the contributions that come from a prevailing wage fringe 401k contribution are employer contributions so it is already employer dollars going into the plan there's two keys there one that would be a basically a match if it was a regular employer ecom employee contribution but in this case it's all employer contributions so it is employer money by the rules of the davis bacon act going into the 401k the other key aspect of that is for the home office staff from the highly compensated at the firm we do have to pass testing for the 401ks and one of the keys is the ownership cannot have more than 60 of the balance of the 401k excuse me at the end of any plan year and what i've seen in a lot of companies that do not offer a 401k or do not use their french dollars unfortunately a lot of the employees tend to opt out of the 401k and the ownership wants to make the biggest contributions they can possibly so if we have all of our field employees maybe putting in 10 15 20 grand and we have four highly compensated they don't want to max out their 19.5 they're gonna put in 80 000 to the 10 that unfortunately is going to not pass testing there's a huge incentive to get those employer contributions in through the french dollars but a long-winded answer to your question marie and i appreciate it uh thank you for asking but you do not need to offer a company match that's 100 at the employer's discretion um so if we were looking to start a plan in january when would i start looking sure another great question thank you for asking um there's no time better than now i always say you know typically give yourself two to three months to get a plan up and running just to run through the plan design questionnaires make sure that we're rea y to go and set up for success um is give yourself a two to three month window we're running here into mid-september so if we're looking to get something in place by january one uh i would recommend uh end of this month beginning of october is where we really start um kind of putting the pen to the paper and and looking at the different options that are available to you okay we have one other question that came up um does benaco have the ability to help at bid time with labor uh can you read that one more time does beneco have the ability to help at bid time with the labor sure labor costs yeah yep absolutely i mean sure we can actually run through those scenarios uh with you again most cases the wage determination sheet is going to tell you what the base wage is for that particular job as far as the hours that it's going to take to complete the job again we leave that to the discretion of the contractor um but we can definitely help you with the the wage determination sheet and what dollar amount again that being said it i can run you through the examples but it's going to be again the discretion of the owners or whoever's writing out the bid to say where are we within our competition right you know the one thing beneco doesn't want to do is have you under bid or over bid and look back and say well okay well sorry that was on us so there is a lot of leeway what we can do is show you what your rate or what your bid cost per hour would be using benefits whether it's a hundred percent other friends going away fifty percent of the friends twenty five percent of the fridge we can break down what that hourly rate would look like differently so they can give you a better indication on once you figure out the hours of labor for that particular job which number you want to use in your bed so we can help in that regard at the end of the day though we leave it to the discretion of the contractors for their final bid and where they want to put in their final numbers okay um one of the things in looking at um putting together your plan there is the new thing that's called the secure act which actually gives a tax credit so it may be if you're considering doing this kind of work now is a perfect time to talk to todd and i we can go through um and talk about the tax credit it is up to five thousand dollars for the first three years depending on how many employees you have and it only takes 20 to get that that tax credit you can see that uh todd's giving a 500 discount right now and then also we have an additional if you do an automatic enrollment uh part of your plan feature you get an additional 500 um tax credits so um if you are considering this it's a perfect time to take a look at it if you have a plan and you have questions please call todderai or email us and let us know what your question is we can look at your plan and your specifics and walk through one of the things i find is that people um you know will have an advisor or a group that works with them but if they're not special specialized in this area and as you can see benaco is specialized sometimes i find that people will be doing things that aren't the most beneficial for all of the dollars and the bottom line so it doesn't hurt to take a second look um and have somebody kind of just evaluate and say hey everything you're doing yep it's it's right in line but let's make sure that what you are trying to achieve is what you are achieving with your plan um we are getting to the end here it looks like i don't think we have any more questions um so with that uh if you want to jump on the handouts are still there if you want to look over and get any information there um as i said you have taught in my information it's on the screen right now so we look forward to helping you and hearing from you and we want to thank you again for taking time out of your day um and you know joining this and hope that it was beneficial with that we said thank you thank you everybody appreciate you taking the time have a great rest of the day