The $1.6M Fringe Swing: Maximizing Profitability in Prevailing Wage

In this episode of The Prevailing Wage Report, host Mark Van Auken and owner/CEO Heather Torretta welcome guest Coray Grove, a prevailing wage and certified payroll expert with over 25 years in the payroll industry. Together, they unpack one of the most widespread and expensive mistakes nonunion contractors make on public works projects: overpaying fringe rates in cash instead of taking proper credit for existing employee benefits.

Coray and Heather break down how contractors can convert existing healthcare, PTO, and retirement matches into hourly rate equivalencies before running payroll to protect their margins. They explore tax-efficient strategies, such as using specialized 401(k) fringe contribution structures, and tackle the complex, often misunderstood realm of FLSA weighted-average overtime. Finally, the panel discusses the critical need for seamless communication across field tracking apps, HR systems, and payroll platforms, emphasizing why a stellar labor compliance reputation is a powerful asset that can win competitive bids.

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Host: Mark Van Auken

Guest(s):

Heather Torretta (Owner & CEO of Prevailing Wage Consulting)

Coray Grove (Founder and CEO, Wage Path)

Time Stamps:

00:00 Ask the Right Questions

00:44 Guest Introduction: Coray Grove

01:06 Backing Into Labor Compliance

03:20 Nonunion Contractor Fringe Errors

04:59 Playing Safe vs Double Paying

06:16 Tax-Efficient Fringe Alternatives

08:23 Structuring 401(k) Plan Documents

11:18 The $1.6M Service Contract Case

13:40 The Disconnect of Patchwork Systems

17:25 Plain English Weighted Average Overtime

19:13 Respecting the Prevailing Wage Floor

22:00 Communicating Paystub Math to Crews

27:00 Cultural Trust & Roleplaying Payroll

31:02 Would You Rather

32:51 Establishing Pre-Construction Plans

36:06 Selling Compliance as a Company Asset

41:00 The "Who Not How" Solution