What Is A Certified Payroll Report?
What is Certified Payroll Reporting?
Certified payroll reports serve to verify that contractors and subcontractors involved in federally-funded projects are compensating their employees at prevailing wage rates, in compliance with the Davis-Bacon and Related Acts.
Certified payroll is a unique weekly payroll report mandated for contractors engaged in federally funded projects. To adhere to these requirements, contractors must submit Form WH-347 to the Department of Labor weekly. This form captures essential information such as employee details, their wages and benefits, the nature of the work performed, and the total hours worked.
What is Prevailing Wage?
Prevailing wage laws exist to guarantee fair compensation for hourly workers. To comply with these laws, the gross wages of your employees must align with the prevailing wage standards for similar projects in the area.
Also, fringe benefits like health insurance and retirement plans should meet these standards.
The Department of Labor establishes prevailing wages by surveying the average wages paid to workers in specific occupations within a given region. In states where the average construction wages are higher, the prevailing wage will correspondingly be higher. For precise wage determinations relevant to your project, you should contact the Department of Labor.
Is Certified Payroll Difficult?
Certified Payroll reporting may be tricky due to varying requirements from different government entities. This is where eMars' Compliant Client solution comes in. Our software makes certified payroll reporting a breeze and helps thousands of companies remain compliant.
What are Common Certified Payroll Mistakes?
If you're responsible for handling certified payroll, whether experienced or new to the process, the potential for mistakes can be a significant source of stress. Errors in reporting can lead to penalties, legal actions, or even debarment from future government contracts.
Accurate Time Tracking
Manual timecards and tracking methods are prevalent in industries like construction. These traditional processes can lead to inaccuracies in recording time and work classification, both crucial elements of certified payroll. Digital tracking systems, while helpful, are not immune to these errors. Discovering and rectifying such discrepancies can be a complex task, and failure to correct them might result in severe penalties or legal implications.
Tracking Work Classifications
A frequent mistake is the inaccurate tracking and recording of a worker's classification. For instance, an ironworker performing tasks outside their primary role during the day needs proper classification tracking. As worker classifications change, so do the applicable prevailing wage rates. Mistakes in tracking can cause payroll errors and are often challenging to correct, but neglecting to do so can lead to serious penalties and legal consequences.
Wage Determination Errors
Wage determinations, as outlined in laws like the Davis-Bacon Act (DBA) and the Service Contract Act (SCA), specify the hourly wage and fringe benefit rates for various labor classifications. Paying the correct rate based on the latest wage determination and worker classification is critical. Errors in wage determinations can be amended, but they may lead to penalties or legal actions.
Certified Payroll Reporting
The act of submitting certified payroll reports is a demanding process, often involving manual data entry, sometimes repeatedly. Reporting inaccuracies can include incorrect hours worked, fringe pay discrepancies, or errors in worker roles and prevailing wage rates. Ensuring the accuracy of all required fields on reporting forms is crucial to avoid submission delays or inaccuracies.
Requirements for Certified Payroll Include
Understanding Form WH-347 is crucial for contractors and subcontractors working on federal contracts. While this form may appear complex at first, breaking down its sections can simplify the process. Here's an overview of the essential components you need to complete:
- Business Name: Indicate whether you are operating as a contractor or a subcontractor.
- Business Address: Provide the complete address, including street, city, state, and ZIP code.
- Payroll Number: This represents the sequence of payrolls submitted under your federal contract, starting with "1" and continuing in numerical order.
- Week Ending: Specify the final day of the workweek for which the payroll is being reported.
- Project and Location: Clearly identify the specific project and its geographical location.
- Project or Contractor Number: This unique identifier can be found in your public works project contract.
For each employee, the following details are required:
- Name: Full name of the employee.
- Social Security Number: Only the last four digits for security purposes.
- Withholding Exemptions: While this is optional, it can be included for convenience.
- Job Classification: Define the role of the employee, such as painter, carpenter, electrician, etc.
- Total Hours Worked: Accurately record the hours worked during the specified period.
- Pay Rate Including Fringe Benefits: Ensure that the compensation aligns with prevailing wage standards.
Written by: Alex Mascitti
Frequently Asked Questions
Q What is the difference between certified payroll and regular payroll?
Certified payroll is a specific weekly payroll report, completed using Form WH-347, which contractors engaged in federally-funded projects are required to fill out and submit. This process serves as proof that they are compensating their workers at the prevailing wage rate.
Q Which law requires a company to use certified payroll?
The Davis-Bacon and Related Acts. These laws are meant to designed to protect workers rights.