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Fringe Benefits FAQs

Learn how much fringe benefit you need to pay on prevailing wage projects and what qualifies as acceptable fringe in lieu of cash—includes specific guidance for Apprentix clients and other program sponsors.

Updated this week

Q: How Much Fringe Do I Need to Pay, and What Counts as Fringe in Lieu of Cash?

When you're working on a prevailing wage project, understanding fringe benefits is essential to staying compliant. This article breaks down how much fringe you need to pay and what qualifies as acceptable fringe in lieu of cash—especially if you're working with Apprentix as your program sponsor.


💡 What Are Fringe Benefits?

Fringe benefits are non-wage compensation provided to employees, often required on government-funded projects. These are meant to supplement the base hourly wage and can include things like health insurance or retirement contributions.


1. How Much Fringe Do I Need to Pay?

👉 If You're an Apprentix Fractional Sponsor Client:

Check Appendix A of the occupation you're working under. Look at Section 4: Wage Schedule.

  • It will say: "% of journeyworker’s rate and fringe benefits".

  • This means you're required to pay some fringe benefit amount to the apprentice—as long as it’s not $0.

  • You don’t need to match the full journeyworker’s fringe rate.

✅ Summary: Any non-zero amount of fringe benefit is acceptable for registered apprentices under Apprentix.


👉 If You're Not an Apprentix Client:

Refer to your program sponsor’s Appendix A and confirm with them how they interpret their wage schedule. Requirements may vary.

  • Some may require the full journeyworker fringe.

  • Others may have specific interpretations for how much fringe must be paid to apprentices.

✅ Tip: Always check directly with your program sponsor for the most accurate and compliant guidance.


2. What Qualifies as Fringe Benefit in Lieu of Cash?

You can meet fringe obligations either by:

  • Paying cash directly to the worker (cash in lieu), or

  • Providing bona fide benefits like insurance or retirement contributions.

✅ Examples of Acceptable Fringe Benefits:

  • Health, dental, or vision insurance

  • Retirement plan contributions (e.g., 401(k), pension)

  • Paid vacation or sick leave

  • Life and disability insurance

  • Training or apprenticeship program funding

  • Other employer-paid benefit plans that meet federal/state guidelines

These benefits must be:

  • Bona fide (genuine, providing real value)

  • Employer-funded (though employees can contribute as well)

  • Creditable (can be calculated as an hourly value)


❌ Not Considered Fringe Benefits:

  • Bonuses or profit-sharing that aren’t guaranteed

  • Reimbursements for tools, uniforms, or equipment

  • One-time or irregular payments

  • Legally required contributions (like Social Security or workers' comp)


3. Fringe Payment Options

You have flexibility in how you meet the fringe requirement:

Method

Example

Benefits Only

$30/hour wage + $10/hour in health and retirement benefits

Cash Only

$40/hour in wages (includes $10/hour in cash fringe)

Combination

$35/hour wage + $5/hour in benefits

As long as the total compensation meets or exceeds the prevailing wage + fringe rate, you're compliant.


📝 Final Tips

  • Always review Appendix A – Section 4 of your occupation for wage and fringe details.

  • If you're with Apprentix, just make sure you're paying some fringe (not $0).

  • If you're with another program sponsor, confirm how they interpret fringe requirements.

  • Maintain detailed records to prove compliance in case of an audit.

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