What would you rather do? Get a root canal … or manage the tracking and compliance for a construction organization’s certified payroll reporting requirements?
If you understand what both of those entail, having your gums gutted by a metal object suddenly doesn’t seem like such a bad thing.
Okay – are construction payroll reporting requirements really all that complex, error prone, and frustrating to contend with?
In short- yes.
So what’s the deal with Certified Payroll reporting Requirements?
Who is Required to Provide Certified Payroll?
One of the biggest industries that requires the use of certified payroll is the construction and contractor industry.
Which Law Requires a Company to Use Certified Payroll?
Davis – Bacon Act
In 1931, the Davis-Bacon Act became law requiring contractors to pay prevailing wage rates, including fringe benefits, to employees on construction projects over $2,000. This law protected local workers from being displaced by migrant workers and maintained appropriate wage levels, typically corresponding to union wages.
According to the Department of Labor, the contractor’s obligation to pay fringe benefits may be met either by payment of the fringe benefits to bona fide benefit plans, funds or programs or by making payments to the covered workers as cash in lieu of fringe benefits.
Davis-Bacon Owner Operator Exemption
Bona fide business owners who also perform construction work are exempt from reporting their wage, but all employees will be subject to the Davis-Bacon Act.
That doesn’t seem so bad, you might be thinking. There are rules governing fair pay just like there are minimum wage laws. We can do this.
Yes – but we haven’t come to the fun part yet.
Compliance Rules and Certified Payroll Reporting Requirements
The U.S. Department of Labor (DOL) requires that weekly Certified Payroll Reports are submitted for all prevailing wage projects. For example, DOL and federal contracting agencies review the information in these reports to determine that employees have received legally required wages and fringe benefits.
The federal form is WH347 and consists of 2 pages. But wait – some states also have certified payroll reporting requirements. And they are all different.
More than a dozen states require the Federal WH-347 form to be filed and most of them have specific state requirements that need to be met.
Half of the states have their own construction payroll reporting requirements and special forms. Some require data to be submitted electronically.
What Is Considered the Prevailing Wage?
In essence, a prevailing wage is an established and standard wage level that is set to discourage contractors from employing labor from out of state at a lower cost while excluding the local workforce, thereby leaving them without work. The prevailing wage consists of several different factors such as: basic hourly rate, expected overtime, and expected benefits. Certified payroll reports are used to confirm that a company is paying their employees the appropriate and correct prevailing wage of the local area.
How Do I Fill Out A Certified Payroll Report?
Filling out a certified payroll report can be pain. Here are some questions you can expect and data you’ll need to provide:
Certified Payroll Example Questions
Some of the questions that are likely to appear on a certified payroll report include:
- Who are your employees?
- What type of work do they perform?
- How many total hours have they worked?
- How much were they paid?
- How much have they earned in gross wages?
- What was excluded from their paychecks (child support, taxes, etc.)?
- What were their gross wages for the week?
What Data is Included in the Federal Report?
- Company name and address
- Payroll week number
- Project identifier and project location
- Each workers name and tax ID number (or social security number)
- Exemptions and work classification
- Hours worked
- Rates, gross earnings, deductions and net weekly wages paid and totals
- Tax withholdings and fringe benefits provided
These are simply a few of the questions you’ll likely need to answer to meet certified payroll requirements.
The Department of Labor estimates that the report takes 55 minutes. That’s about the same amount of time it takes to perform a root canal. Can you imagine having a root canal every week? You can view a sample certified payroll report online in many places to determine exactly how long it would take for you to complete, but without effective software it will likely take you some time. Completing a certified payroll Quickbooks report can also take time without an efficient process in place.
Use Payroll Software to Meet Certified Payroll Reporting Requirements
Meeting all of these certified payroll requirements can help ensure you maintain compliance without issue. If you want to make managing certified payroll even easier, you can use certified payroll software to further increase efficiency and accuracy. Here at EPAY Systems, we offer a variety of solutions such as our human capital management software that can effectively boost your company’s performance when it comes to payroll management.
EPAY’s Software Provides All The Certified Payroll Instructions You Need For Reporting
Make sure your certified payroll reports are correctly filled out. With EPAY’s certified payroll software, you’ll be provided with all the necessary information and instructions to ensure that your routine submissions are compliant and up to par.
Improve Your Processes with HR and Certified Payroll Software from EPAY Systems
EPAY Systems can save you time and eliminate your biggest payroll headaches by processing payroll for you using our payroll software. You can offload everything to us, including payroll distribution, tax administration and filing, garnishment and certified payroll compliance, and W-2 processing. Whatever your payroll needs may be, we’ve got you covered!
Cut your administrative work in half with EPAY’s Payroll Management and Tax Filing Services. Get started with a live demo today!