In the heart of the Buckeye State, Chapter 4115 of the Ohio Revised code sets the prevailing wage for the state of Ohio. The Ohio Department of Commerce enforces provisions that set the minimum wage and hour requirements for laborers and mechanics working on public works projects in Ohio. These statutes apply to all partially and fully publicly funded projects over the following threshold values:

New Building Construction: $250,000.00
Building Construction (reconstruction, repair, renovation, etc.): $75,000.00
New road or bridge construction: $96,901.00
Road or Bridge construction (reconstruction, repair, renovation, etc.): $28,789.00

These thresholds are adjusted every two years and cannot decrease or increase by more than 3% at a time. The law aims to ensure that workers are paid fairly for their work on public projects and to prevent contractors from underbidding one another by paying their workers less than the prevailing wage. It is important to note that Ohio state is committed to protecting the rights of workers shown through Ohio revised Code Section 4115.071, which stipulates that the public authority contracting for a public works project must appoint one of their employees as a “prevailing wage coordinator” for the life of the project to protect the rights of workers and ensuring that they are compensated fairly for their work on public projects.

Fringe Benefits are an important factor of prevailing wage and can include a variety of benefits in addition to normal wages. According to the IRS, they are considered a form of compensation for services rendered. These benefits can include health or pension plans, among others. In the context of prevailing wage, fringe benefits are significant for two reasons:

What counts as a Fringe Benefit: It is essential to determine what can be categorized as a fringe benefit. The amount must be paid to a 3^rd party on behalf of and to benefit the employee. Examples of bona fide fringe benefit plans include health or pension plans.
Factoring into Prevailing Wage: Fringe benefit payments may be taken into account when calculating prevailing wage rates for employees. Employers need to calculate the hourly cost of providing these benefits to the employees. This amount can be added to regular wages when determining the total compensation offered to employees to meet the prevailing wage requirements.

On August 23, 2023, the Department published in the Federal Register the final rule, “Updating the Davis-Bacon and Related Acts Regulations.” The final rule updates regulations issued under the Davis-Bacon and Related Acts. The final rule is effective on October 23, 2023.

The final rule adds new paragraph (c) to § 5.25 to codify the principle of annualization that is used to calculate the amount of Davis-Bacon credit that a contractor may receive for contributions to a bona fide fringe benefit plan (or the reasonably anticipated costs of an unfunded benefit plan) when the contractor’s workers work on both DBRA-covered and private (non-DBRA) work. Contractors, plans, and other interested parties may request an exception from the annualization requirement by submitting a request to WHD, but such exceptions may be granted only if the benefit provided by the plan is not continuous in nature and does not compensate both DBRA-covered and non-DBRA work.

Generally, Fringe Benefits encompass employer contributions relayed to employees, firmly entrusted to a trustee or an external party as part of a genuine fringe benefit fund plan or program. This plan should be reasonably anticipated and represent a binding financial commitment for the employees’ benefit. It’s important to note that employer contributions mandated by federal, state, or local regulations do not fall under the category of fringe benefits.

Fringe benefits can be confusing, but taking these factors into account will help you remain compliant and avoid penalties!