Employee benefit packages for subcontractors: 8-step guide

For contractors, skilled labor is hard to find and even harder to keep. In 2026, the construction industry needs about 350,000 new workers to keep up with demand, and that number may rise to 456,000 in 2027. Companies need competitive strategies to fill these roles, and employee benefits packages are an important piece of the puzzle. 

Construction is a physically demanding and often dangerous job, yet comprehensive benefits remain far from standard in the industry. That gap is an opportunity: Employers who offer strong health and wellness coverage stand out in a high-demand labor market and give candidates a compelling reason to choose them over the competition.

Luckily, the right employee benefits program can take your business from a quick pitstop in someone’s work history to a workplace they retire from. In this guide, learn which benefits matter most in the industry and how to build a plan employees love. 

What are employee benefits packages?

An employee benefit package refers to non-wage compensation employers offer workers. In most cases, contractors share the cost of these benefits with employees. Businesses pay a portion, and the employee covers the rest.

Companies typically only offer core benefits like health insurance, 401k plans, and life insurance to W2 employees. However, softer benefits like paid time off (PTO) and wellness programs are more flexible, and many contractors give them to both W2 and 1099 workers.

The challenges of benefits packages in construction

Most benefits systems are built around a stable 9-to-5 workforce, but with seasonality, unpredictable hours, and frequent turnover, construction doesn’t work that way. Employers commonly set eligibility rules — like requiring workers to hit a minimum hour threshold of 25 hours per week plus a 60-day waiting period — based on carrier and broker recommendations or government requirements like the ACA. But when hours fluctuate week to week, tracking who actually meets those thresholds is a significant administrative burden. 

Multi-state work adds another layer of complexity since paid leave laws and prevailing wage requirements vary from state to state. On public projects, contractors are already required to meet fringe benefit obligations by worker classification and location, so funding a bona fide benefits plan rather than paying cash in lieu can be a smart way to satisfy that requirement while actually giving workers something valuable.

Health and retirement benefits for union employees are typically handled directly by the union based on union-negotiated plans rather than by the employer. But contractors with a mixed workforce still need to manage benefits for their non-union field crews and office staff, and since the two groups operate under entirely different structures, that usually means maintaining separate benefit classes and distinct payroll processes for union and non-union employees.

Why employee benefit packages are valuable for construction companies

Good talent is in high demand, and every contractor is fishing from the same, limited pool. Benefit packages play a big role in ensuring you have enough people — and the right people — on the job. Here are a few reasons why:

• Attract the industry’s best talent: Skilled tradespeople know their worth. When you offer robust health benefits and retirement plans, you tap into their desire for long-term security.
• Win the war for hard-to-hire roles: Certain jobs, like specialized operators and experienced project managers, are in short supply. A premium benefits package can tip the scales when a candidate has a handful of good offers on the table.
• Improve retention: Benefits positively impact retention, preventing turnover. An Aviva survey showed that 79% of employees are more likely to stay with an employer that supports health, well-being, and illness recovery.
• Stand out from the competition: Some contractors may steer away from a total benefits package because of the additional paperwork and costs. However, offering comprehensive benefits helps your company stand out to prospective workers. 
• Strengthen on-site performance: Construction is a risky industry, and when workers know they have physical support and accident protection, they show up more focused and confident.
• Stay compliant: Prevailing wage projects require contractors to pay laborers fringe benefits or the equivalent in cash. Not following these regulations puts companies at risk of paying fees and losing projects. 
• Show your employees you value them: Benefits signal that your company sees workers as long-term investments, not just disposable labor to fill a gap. That goes a long way in construction where the work is hard and the risks are real.

11 employee benefits examples

While construction workers rely on many of the same benefits as employees in other industries, they tend to prioritize benefits that support hazardous work. A strong package usually covers some combination of the following:

• Health insurance: Health plans are typically the foundation of benefits packages, covering doctor visits, hospital stays, and emergency care.
• Dental insurance: This pick usually covers routine cleanings, fillings, and complex procedures.
• Vision insurance: This benefit helps your employees pay for eye exams, glasses, and contact lenses.
• Retirement plan: Construction is physically demanding work that many workers can’t or don’t want to do indefinitely, making retirement savings especially important. This benefit helps workers save for the future, with some plans boosting contributions through employer matching.
• Life insurance: This provides a financial safety net for an employee’s family in the event of untimely death.
• Short-term disability insurance: This coverage replaces income during temporary medical absences caused by injury or illness, like recovering from a broken bone or a surgical procedure.
• Long-term disability insurance: This insurance extends income protection for more serious or prolonged health conditions, such as a back injury or illness, that keeps a worker off the job for months or permanently.
• Paid time off (PTO): Comprehensive PTO, including vacation and sick leave, ensures your team can rest without losing financial security.
• Education and training: Reimbursing the cost of certifications and providing ongoing training courses support employee career development, showing them they have a future with your business.
• Tools and equipment stipends: Providing an annual budget for trade-specific equipment helps workers maintain productivity, safety, and quality.
• Mental health support: Mental well-being benefits like flexible work schedules and therapy resources can be a lifesaver. Studies show that 70% of construction workers feel stressed on the job, and the suicide rate among male construction workers is 75% higher than men in the general population. 

How to create an employee benefit package: 8 steps

Here are the basic steps to create a core benefits package.

1. Define your objectives.

Establish your company and workforce goals. For instance, you might be trying to reduce turnover, attract a specific type of employee, or meet the requirements to bid on specific contracts. Benefits packages should reflect these objectives. 

Since benefits play such a big role in attracting and retaining talent, it’s also a good strategy to ask your team what they want. You might find they value commuter benefits or tuition reimbursement more than wellness programs.

2. Build clean setup data.

Gather details on your current headcounts, ages, and locations. Insurance providers use this information to quote pricing and structure plans, so accurate data helps you avoid expensive surprises during the underwriting process.

3. Set a budget and contribution approach.

Determine how much the company can chip in. Contribute toward monthly premiums with a fixed percentage or a flat dollar amount. Percentages fluctuate with rate changes but ensure that employers pay a consistent share. On the other hand, flat amounts fit into a predictable budget but don’t support price increases.

4. Define clear eligibility rules.

Decide who qualifies for benefits to keep your plans transparent and fair. Common rules include a 60-day waiting period or a requirement to work at least 25 hours per week consistently. 

5. Choose a benefits package your employees value.

Consider your workforce, industry, and survey data to shape a practical plan. For example, you might want to offer office staff and field crews different benefits based on their needs. Office teams may love remote or hybrid work, while laborers might look for paid skill development training.

6. Finalize details with your broker.

Negotiate with your broker to secure favorable rates. Plans should be financially sustainable, so shop around for a provider who offers exactly what you need. Before you lock in, review the plan documents and make sure they reflect your eligibility rules and coverage depth.

7. Run a transparent enrollment.

Hold a meeting to explain the new benefits, showing your employees how to sign up and what it costs them per paycheck. It’s a good idea to keep a central knowledge base containing all this information so people can review it at any time. Consider platforms that allow employees to enroll on their mobile phones in an app they’re already using for other core workflows, like Miter Benefits.

8. Review and administrate regularly.

Benefits are rarely “set and forget.” Regularly audit your expenses and review plan performance to ensure they still meet your goals and expectations. Try issuing surveys to get your employees’ opinions, too.

How to offer employee benefits in the construction industry

Here are a few tips to roll the plan out to your employees:

• Market benefits as total compensation: When you talk about pay, don’t just mention the hourly rate. Mention items like your 401k match and PTO policy in job ads to highlight the complete compensation.
• Break down the costs: Provide a simple table that shows the gross pay, benefit deduction, and net pay. This sets fair expectations and maintains transparency.
• Provide flexibility: Some workers may already have health insurance. Offer to opt them out of health but still give them the 401k and dental plan. Or, increase wages to help workers pay for their own plans. 
• Make the digital experience easy: Field workers spend their day on their feet, not seated at a computer. Use a mobile-friendly tool so they can check their coverage and change beneficiaries with ease.

Eligibility rules and union versus non-union coverage dictate who gets what, which can lead to confusion and tension. Communicate your plan clearly to avoid claims of favoritism and keep everyone on the same page from the start.

Centralize systems and provide a solid experience with Miter.

Managing employee benefits in construction is complex, and most contractors end up juggling a payroll provider, a separate broker portal, and a stack of paper enrollment forms. This disconnected approach is chaotic, resulting in errors and frustrated employees.

Miter solves this by bringing HR, payroll, and benefits into a unified system. For managers, this means no manual data entry or tool juggling. Sync the platform with over 40 popular insurance carriers, and automatically update payroll with benefit deductions. 

For workers, it means no messy paperwork. Miter provides a simple, mobile-friendly interface in both English and Spanish. Employees can view plan details, add new information, and complete enrollment right from their devices. 

Design and manage your employee benefits programs with Miter.