WH-347 fringe benefits explained

Most Davis-Bacon wage determinations list two numbers for each classification: a basic hourly rate and a fringe benefit rate. For a classification listed at $30.00 + $12.00, you owe at least $42.00 of value for every hour worked. How that $12.00 is delivered decides which WH-347 columns you use.

Three ways to meet the fringe obligation

Under 29 CFR 5.31 you can meet the obligation by:

1. Plan contributions. Pay at least the basic hourly rate in cash and contribute at least the fringe amount to bona fide fringe benefit plans (health, pension, vacation and so on).
2. Cash in lieu. Pay the basic rate plus an additional cash payment instead of benefits.
3. A combination. Partly cash, partly plan contributions, adding up to at least the total.

The regulation's own example uses "Laborer: common or general" at $21.93 basic plus $6.27 fringe: either $21.93 in cash plus $6.27 of contributions, or $28.60 in cash, or a mix that totals at least $28.60.

Where each piece goes on the form

What you pay	WH-347 column
Basic hourly cash wage	6A (top line), and in 7A as wages
Overtime rate (1.5 × the basic rate paid)	6A (bottom line)
Contributions to plans you take credit for	6B, total for the week; detail per plan on page 2
Cash paid instead of fringe benefits	6C, total for the week

Column 6B is the total fringe benefit credit you claim for the worker: the worker's total hours for the period times the total hourly credit you list for that worker on page 2.

Column 6C is the total cash paid in lieu of fringe benefits for the week: total hours times the hourly cash-in-lieu amount.

The 6A instructions are explicit: "do not include cash payments in lieu of fringe benefits in this column."

The page 2 table: Hourly Credit for Fringe Benefits

If you claim credit for contributions to, or reasonably anticipated costs of, bona fide plans, check box 5 of the Statement of Compliance and complete the table.

• First column: each worker you claim credit for, by entry number and name, mirroring the names and order on page 1.
• For each plan (up to six columns): the fringe benefit plan name (top row), type (second row), plan number (third row), and whether it is funded or unfunded (fourth row).
• Rows below: the hourly credit claimed for each worker under each plan.
• Last column: the total hourly credit for each worker.

If you provide more than six bona fide fringe benefits, submit an addendum with the same information for the others.

If you pay fringe only in cash, check box 5 but do not complete the table; the cash is already reported in 6C. If you pay partly to plans and partly in cash, complete the table for the plan part and report the cash part in 6C.

Funded vs unfunded plans

A funded plan is one where you make contributions to a trustee or third party (an insurer, a union fund, a retirement plan provider). A plan you pay for directly out of company assets is commonly called an unfunded plan. Under 29 CFR 5.28, an unfunded plan counts as a fringe benefit only if, among other conditions, it is legally enforceable, financially responsible, communicated in writing to the workers, and the contractor requests and receives approval from the Department of Labor. DOL's WH-347 instructions repeat that you need prior approval before claiming such a credit. Requests go to WHD's Division of Government Contracts Enforcement (the rule lists a mailing address and [email protected]).

Annualization: what the hourly credit should be

The hourly credit you enter is not simply "what the plan costs per hour on this job." Under 29 CFR 5.25(c), contractors must generally annualize plan contributions: divide the total cost of the contribution by the total hours the worker worked on both private and Davis-Bacon work during the period the cost covers. If contributions differ by worker, compute credit separately for each worker.

Example: you pay $9,600 a year for a worker's health coverage, and the worker works 2,000 hours that year, of which 600 are on Davis-Bacon jobs. The creditable rate is $9,600 ÷ 2,000 = $4.80 an hour, not $9,600 ÷ 600.

The rule has exceptions. Defined contribution pension plans with immediate participation and essentially immediate vesting are excepted, and other benefits can be excepted on request if they meet the criteria in 5.25(c)(3). If you are unsure whether your plan qualifies, ask your plan administrator or the agency before you rely on a higher credit.

Fringe benefits and overtime

Fringe is owed for every hour worked, including overtime hours, but at the straight hourly fringe rate. It is not multiplied by 1.5. And under 29 CFR 5.32, contributions to plans and cash paid in lieu of fringe are excluded when you compute the overtime rate, as long as the basic rate used is not below the wage determination's basic hourly rate. More in overtime on certified payroll.

Worked example: plan plus cash

Wage determination: Electrician, $35.00 basic + $15.00 fringe. The contractor pays $35.00 basic, contributes $6.40 an hour (annualized) to a health plan and $3.00 to a retirement plan, and pays the remaining $5.60 as cash in lieu. The worker works 42 hours: 40 straight time and 2 overtime.

Item	Calculation	Amount
6A	ST 35.00 / OT 1.5 × 35.00	35.00 / 52.50
7A	40 × 35.00 + 2 × 52.50	1,505.00
6B	42 × (6.40 + 3.00)	394.80
6C	42 × 5.60	235.20
Check	6.40 + 3.00 + 5.60 = 15.00 per hour	meets $15.00

On page 2, the worker's row shows Hourly Credit $6.40 under the health plan, $3.00 under the retirement plan, and a total hourly credit of $9.40. Box 5 is checked.

Practical tips

• Keep the plan documents and the math behind each hourly credit. The contract clause requires records showing the plans are enforceable and communicated to workers, and the costs incurred.
• If a worker earns different credits in different classifications, keep the hourly numbers per worker straight; the 6B total should still equal hours times the page 2 total hourly credit.
• Cash in lieu is wages for tax purposes. Withholding and FICA in column 8 are computed by your payroll process; the form only reports what you actually deducted.

In WH-347 Kit you set each classification's fringe as cash, plan or both, with plan name, type, number and funded/unfunded status. The app fills 6B, 6C and the page 2 table from the hours you enter. You still decide the hourly credit; it does not annualize for you.