Supplemental Unemployment Benefit Plans (SUB) can be extremely beneficial for construction companies and their employees. SUB plans provide compensation to employees in addition to state unemployment benefits during periods of layoff and if designed correctly, are not subject to FICA or FUTA taxes. Pre-funding SUB plans with Davis Bacon or state prevailing wage fringes via a trust fund can provide substantial tax benefits to employers in addition to the FICA savings.
For employees, SUB plans can transform a stressful layoff into a welcome respite, generating peace of mind and employer loyalty.
Although SUB plans can be beneficial for employers in any industry, they are particularly valuable for construction companies that are subject to prevailing wage rules under the Davis-Bacon Act or state prevailing wage laws.
If you have questions, or would like a copy of our whitepaper, Harnessing the Power of Supplemental Unemployment Benefit Plans, please go to directadvisors.com or call us at (518) 362-2119. Our solutions are free from any conflict of interest as we do not sell any financial or insurance products.