Construction Certified Payroll Explained

As a contractor or subcontractor looking to secure federal government-funded construction projects, it is essential to be familiar with the requirement of submitting certified payroll records. These records play a crucial role in demonstrating that your company is committed to paying workers fairly and in compliance with prevailing wage laws. In this article, we will delve into the concept of construction certified payroll, its significance, and how it ensures fair wages for workers. This provides security for business in more ways than one.

Understanding Construction Certified Payroll

Certified payroll refers to a detailed report that contractors and subcontractors are obligated to submit regularly to the federal government agency overseeing the construction project. This report includes comprehensive information about the wages paid to each employee, including fringe benefits, deductions, and hours worked.

The certified payroll records must adhere to specific formatting and must be certified by an authorized representative of the company, affirming that the information provided is accurate and complete. These records are typically submitted weekly, although the frequency may vary depending on the project and government agency requirements.

The Significance of Certified Payroll in Federal Government Projects

Certified payroll records serve multiple purposes to ensure fair wages for workers involved in federal government-funded construction projects. Here are some key reasons why certified payroll is crucial.

Prevailing Wage Compliance

One of the primary objectives of certified payroll is to ensure compliance with prevailing wage laws. Prevailing wage laws require contractors and subcontractors to pay workers the prevailing wage rate, which is typically determined by the state or local government. Certified payroll records provide transparency and accountability, allowing government agencies to verify that workers are receiving the appropriate wages.

Transparency and Anti-Fraud Measures

Certified payroll records promote transparency in the construction industry, preventing wage theft, underpayment, and fraudulent practices. By requiring contractors to submit detailed payroll information, government agencies can detect any discrepancies and take appropriate action to rectify the situation.

Protecting Workers' Rights

Certified payroll records play a vital role in protecting workers' rights. By ensuring that workers are paid fair wages, these records help prevent exploitation, encourage compliance with labor laws, and promote a healthier and more equitable working environment.

Requirements for Certified Payroll

The purpose of the WH-347 form is to guarantee that you are compensating your employees with either the prevailing wage or the average wage for individuals in a particular occupation. This document demonstrates that your business is adhering to all prevailing wage regulations.

• Business name: This is where you'll state whether you're a contractor or subcontractor.
• Business address: Include your street, city, state and zip code.
• Payroll number: Payroll numbers show the weeks worked under your federal contract.
• Week ending: State the last day of the work week.
• Project and location: Identify the project you're working on and its location.
• Project or contractor number: You can find this information on your contract for your public works project.

Next, you'll need to share each employee's information.

• Their name.
• The number of withholding exemptions.
• The employee's job classification. This may be a painter, foreman, electrician, etc.
• Their total hours worked.
• The employee's pay rate, including fringe benefits. Remember, their rates must meet prevailing wage requirements.

eMars' Automatic WH-347 Form Generation

The Compliant Client streamlines your work process by automatically generating WH-347 forms. Right after payroll is signed, the WH-347 is immediately produced, ready to be dispatched as per the owner's instructions. Whether the preference is email, snail mail, or electronic monitoring, this feature caters to every agency's unique needs. Experience the power of automation and simplify your compliance journey with us.

The Davis-Bacon Act

The Davis-Bacon Act, established in 1931 by Congress, serves as a crucial safeguard for workers, ensuring they receive fair wages. It mandates that you must adhere to certified payroll requirements if your business is awarded a government contract exceeding $2,000 for public building construction, alterations, or repairs.

Over the years, subsequent legislation has reinforced the enforcement of prevailing wage laws alongside the Davis-Bacon Act. Prominent examples of such acts include the Housing and Community Development Act of 1974, the Federal-Aid Highway Acts, and the Federal Water Pollution Control Act. These measures work in tandem to uphold equitable compensation standards and protect workers' rights in various sectors.

How to Stay in Compliance with Certified Payroll

If you're a contractor for public works projects, eMars' Compliant Client is your one-stop shop for staying compliant with the Davis-Bacon Act.