Background
ABC Construction is a medium-sized contractor specializing in public infrastructure projects. With a workforce of 150 employees, they frequently engage in prevailing wage work for state and local government entities. Despite steady business, ABC Construction faced rising labor costs due to prevailing wage requirements, which were impacting their profitability.
Challenge
The company’s management sought a solution to reduce their cash outlays on wages without compromising compliance with prevailing wage laws. They needed a way to redirect funds efficiently while still meeting the required wage determinations.
Solution
Black Bishop collaborated closely with ABC Construction to design a customized 401(k) plan that integrated prevailing wage fringe benefits. By allocating a portion of the fringe benefits into the 401(k) plan, the company reduced immediate cash wage payments. We ensured the plan met all regulatory requirements and provided employee education sessions to facilitate enrollment.
Results
- Cost Savings: ABC Construction saved over $500,000 in the first year.
- Employee Satisfaction: Retirement plan participation increased by 75%.
- Compliance: The company remained fully compliant with all prevailing wage regulations.