ANSWER: If one is union signatory, you merely take the per hour benefits the contractor is paying to the Union Trust Funds as fringe benefit credit. For open shop contractors, all jurisdictions will allow you to take credit for heath and welfare payments you make to a third party provider. The calculation must be by individual.
The easiest calculation is:
Monthly premium x 12 (months in a year) ÷ 2080 (work hours in a year)= per hour rate
Example: $750 x 12 =$9000 ÷ 2080 = $4.32 per hour as fringe benefit credit for that worker
Pension is usually credited 100% and does not need to run through this formula.
Most, but not all, jurisdictions also allow contractors who do not pay benefits to a third party provider or trust funds to calculate and take credit for any vested benefits such as vacation and holiday. Remember that these cannot be forfeit if the employee leaves the company. So earned vacation must be paid.
This is the calculation:
Total Hours (vacation and holiday to be earned by the worker in a year) x RRP (employee’s regular rate of pay that will be paid for this vacation or holiday) ÷ 2080 = per hour rate
Example: 120 hours x $35 = $4200 ÷ 2080 = $2.01 fringe credit for vacation and holiday.
Hawaii and Nevada do not allow contractors to take credit unless the benefit is paid to a third party administrator. There may be other states as well. Check your State’s ruling on this topic.
