Davis-Bacon Fringe Benefits: What Contractors Must Pay
Aug 23, 2025
One of the most common sources of Davis-Bacon violations is misunderstanding fringe benefit requirements. Many contractors know they must pay prevailing base wages, but the fringe component is equally mandatory and often larger.
What Fringe Benefits Are Required?
Each Davis-Bacon wage determination lists a fringe benefit rate in addition to the base wage. Required fringe categories include:
- Health & Welfare — medical, dental, vision insurance costs
- Pension — retirement plan contributions
- Vacation — paid leave accrual
- Training — apprenticeship training costs
The Total Package Rule
The law requires contractors to pay the total package — base + fringe. For example, if a WD requires $42.00 base + $16.00 fringe, the minimum hourly labor cost is $58.00.
Three Ways to Satisfy Fringe Requirements
- Cash: Add the fringe amount directly to the worker's paycheck
- Benefits: Contribute to bona fide benefit plans (insurance, 401k, etc.) worth at least the fringe rate
- Combination: Mix cash and benefits, as long as the total equals or exceeds the required fringe rate