(a) The act lists all types of fringe benefits which the Congress
considered to be common in the construction industry as a whole. These
include the following: Medical or hospital care, pensions on retirement
or death, compensation for injuries or illness resulting from
occupational activity, or insurance to provide any of the foregoing,
unemployment benefits, life insurance, disability and sickness
insurance, or accident insurance, vacation and holiday pay, defrayment
of costs of apprenticeship or other similar programs, or other bona fide
fringe benefits, but only where the contractor or subcontractor is not
required by other Federal, State, or local law to provide any of such
benefits.
(b) The legislative history indicates that it was not the intent of
the Congress to impose specific standards relating to administration of
fringe benefits. It was assumed that the majority of fringe benefits
arrangements of this nature will be those which are administered in
accordance with requirements of section 302(c)(5) of the National Labor
Relations Act, as amended (S. Rep. No. 963, p. 5).
(c) The term ``other bona fide fringe benefits'' is the so-called
``open end'' provision. This was included so that new fringe benefits
may be recognized by the Secretary as they become prevailing. It was
pointed out that a particular fringe benefit need not be recognized
beyond a particular area in order for the Secretary to find that it is
prevailing in that area. (S. Rep. No. 963, p. 6).
(d) The legislative reports indicate that, to insure against
considering and giving credit to any and all fringe benefits, some of
which might be illusory or not genuine, the qualification was included
that such fringe benefits must be ``bona fide'' (H. Rep. No. 308, p. 4;
S. Rep. No. 963, p. 6). No difficulty is anticipated in determining
whether a particular fringe benefit is ``bona fide'' in the ordinary
case where the benefits are those common in the construction industry
and which are established under a usual fund, plan, or program. This
would be typically the case of those fringe benefits listed in paragraph
(a) of this section which are funded under a trust or insurance program.
Contractors may take credit for contributions made under such
conventional plans without requesting the approval of the Secretary of
Labor under Sec. 5.5(a)(1)(iv).
(e) Where the plan is not of the conventional type described in the
preceding paragraph, it will be necessary for the Secretary to examine
the facts and circumstances to determine whether they are ``bona fide''
in accordance with requirements of the act. This is
particularly true with respect to unfunded plans. Contractors or
subcontractors seeking credit under the act for costs incurred for such
plans must request specific permission from the Secretary under
Sec. 5.5(a)(1)(iv).
(f) The act excludes fringe benefits which a contractor or
subcontractor is obligated to provide under other Federal, State, or
local law. No credit may be taken under the act for the payments made
for such benefits. For example, payment for workmen's compensation
insurance under either a compulsory or elective State statute are not
considered payments for fringe benefits under the Act. While each
situation must be separately considered on its own merits, payments made
for travel, subsistence or to industry promotion funds are not normally
payments for fringe benefits under the Act. The omission in the Act of
any express reference to these payments, which are common in the
construction industry, suggests that these payments should not normally
be regarded as bona fide fringe benefits under the Act.
