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On a Davis-Bacon or prevailing-wage contract, a wage determination sets a required base rate and a required fringe benefit rate for each classification. A contractor can meet the fringe portion by contributing to a bona fide plan — health insurance, a pension, an approved apprenticeship fund — by paying it straight to the worker in cash instead, or by some mix of both. Which one a contractor picks changes the overtime math, and it is a distinction most payroll defaults get wrong.
Under 29 CFR 5.32 and the FLSA "regular rate" definition it borrows from 29 CFR 778.7, a bona fide plan contribution is excluded from the regular rate used to compute overtime. It is owed at the same rate for every hour worked, straight-time or overtime, and never gets a time-and-a-half premium. Cash paid in lieu of fringe is included in the regular rate — it is treated the same as the base wage for overtime purposes, so it does get the premium on hours over 40.
Worked example. A worker's base rate is $28/hr, with $8.50/hr paid into a bona fide health plan and $2/hr paid in cash instead of a plan contribution. On 6 overtime hours, the correct overtime rate is ($28 + $2) × 1.5 = $45/hr. A payroll system that only applies the premium to the base rate — paying $28 × 1.5 + $2 = $44/hr instead — underpays by $1/hr on every overtime hour: $6 for this worker, this week, and it compounds across every classification and every week the same shortcut runs.
Two things this rule does not do:
Open the calculator, split this week's fringe into its bona fide and cash portions, and see the correct overtime rate next to what the common shortcut would have paid. Nothing is uploaded.