NYSDOL Annualization of Fringe Supplements: What are the rules?
If you’ve determined that New York
State Department of Labor (NYSDOL) annualization regulations indeed apply to
you, you may be asking yourself, “What do I do next?” On the surface it’s simple.
“Annualization” refers to the time period over which employer contributions are
divided by to calculate an hourly credit that applies toward the stated NYS
prevailing wage (PW) fringe supplement rate. In effect, annualization means
that NYS PW fringe supplements cannot be used to subsidize benefits on private
work.
In practice, you’ll want to know
which benefits count toward the credit, how to treat Davis-Bacon fringe
supplements as well as prevailing wage fringe supplements from other
states. You need to know that ALL NYS PW fringe supplements are
annualized if they are used for benefits. This is different than
Davis-Bacon annualization. And don’t forget, annualization calculations
are done employee by employee, not on a pooled basis. Once you calculate
your hourly benefit credit, withhold the credit amount per hour on NYS PW jobs
and pay the remainder in the employees weekly pay check.
Don’t forget to fill out the
certified payrolls correctly, front and back, with respect to what you are
doing with NYS PW fringe supplements and keep thorough records. You may
want to adopt an annualization compliance policy with a clear,
written methodology. If you have any question as to whether an employer
expense incurred on behalf of an employee qualifies for inclusion into the
Annualization calculation, contact your local NYSDOL office or your compliance
consultant.
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