certified payroll reporting requirements

As president of Sunburst Software Solutions, Inc, Nancy knows a lot about certified payroll. The Davis-Bacon Act prevents contractors and subcontractors from underpaying employees. If you do contract work in multiple states or even regions, the prevailing wage will likely be different. You can be subject to costly penalties if you fail to follow certified payroll requirements. 2022 has been a good year for certified jobs and there are no signs of slowing down.

certified payroll reporting requirements

It states that all of the forms are correct and that no employee is paid less than the prevailing wage for the work they performed on the project. Form WH-347 is the form you’ll use to submit your weekly certified payroll reports. The DOL provides many helpful tools to help with compliance on certified payroll reports. One of the tools is a wage determination tool to help you calculate prevailing wage. Contractors and subcontractors on government-funded public works contracts worth over $2,000.

How to create a certified payroll report

In addition, on the back of the form, you’ll need to sign a Statement of Compliance that you paid each employee on the contract no less than the proper prevailing wage for the work performed. Certified payroll using Form WH-347 is required for covered contractors and subcontractors performing work on federally financed or assisted construction contracts in an amount over $2,000. This could be anything from the building of a structure built for public use like a school to a public works project such as the repair of a highway or bridge. But wait – some states also have certified payroll reporting requirements.

  • The prevailing wage rates vary by the location of where the work is performed and the job title of your employees.
  • Certified payroll and certified payroll reporting are often used interchangeably.
  • In order to make a profit, construction businesses need to account…
  • They must include a great number of details on each worker’s pay, role and time worked.
  • By verifying that contractors are paying the required prevailing wages and fringe benefits, certified payroll reports help protect the livelihood of workers on certain federally funded contracts.
  • While you can try to tackle certified payroll reports on your own, it might make sense to enlist the help of a certified payroll specialist.

But if you’re in a state that has its own prevailing wage law, your certified payroll reports can be much more complicated. As we saw earlier, there are 36 states with laws (dubbed little-Davis-Bacon Acts) that say the prevailing wage must be paid on projects that meet certain budget and project criteria. Naturally, these criteria can change from state to state, even government agency to government agency within each state. The weekly reports, which serve as proof that you’re paying your employees the prevailing wage, must be submitted to the funding agency for the contract. If you don’t work on the contract in a particular week, you don’t have to file the report.

Certified Payroll Reporting Requirement Basics

However, in California’s Labor Code section 1771.5, the threshold is set to $25,000 for construction work and $15,000 for alteration, demolition, repair, or maintenance. You can do payroll manually, but payroll software makes filling a certified payroll report easier. Furthermore, having a well-organized payroll system makes certified payroll reporting much easier. When filling the form, only include employees doing physical labor on site since they’re the ones eligible for prevailing wages. Employees in executive and administrative positions are not eligible for prevailing wages. You might also consider working with a certified payroll specialist to ensure you’re meeting the government’s requirements.

Software systems can help with the processing of payroll by assigning the appropriate prevailing wage and fringe rates to an employee’s completed work. Software systems can automatically create a standard management document that includes the information needed for creating state and federal certified payroll reports. Under the Davis-Bacon and related Acts, the contractor is required to pay not less than prevailing wage, including fringe benefits, https://www.bookstime.com/articles/management-fees as predetermined by the Department of Labor. Certified payroll is a report you submit to a government agency certifying that you have paid your employees for the previous week according to prevailing wage laws. Certified payroll reports need to show information on each worker’s classification as well as their prevailing and fringe rate. “Let’s say a contractor isn’t paying the prevailing wage, but submitting
certified payroll reports anyway.

How to save time with Payroll Reporting

But in reality, you could spend hours just collecting, reviewing, and confirming your payroll data. That’s in addition to generating paychecks and completing a certified payroll report. This work becomes more time-consuming, the more employees you have and the more jobs you work on. It’s also highly certified payroll reporting requirements error-prone if you are creating these payrollreports manually. Submitting certified payroll reports correctly is not only an exercise in willpower and accountability (or risking millions of dollars in back wages). It’s also a matter of proper record keeping, continued education, and compliance.