In accordance with prevailing wage laws, such as the Davis-Bacon Act and the Service Contract Act, your employees’ wages should be determined correctly. Moreover, you need to use only newly published wage determinations as they include the payment rates. However, it’s necessary to avoid the negative consequences that result from not complying with prevailing wage and certified payroll laws. 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.
Certified payroll is the process of documenting and reporting that workers have been paid the prevailing wages. In short, prevailing wage sets the rate, and certified payroll proves it’s being paid. There is also a statement of compliance that states your attached payroll report is accurate and complete. The goal of WH-347 is to ensure you’re paying your employees the prevailing wage or the average wage for employees in a specific occupation. It shows that your business is complying with all prevailing wage requirements.
Contractors and subcontractors working on federally funded construction projects have an additional payroll responsibility known as certified payroll. You must complete and send certified payroll reports to the government to avoid penalties like fines and imprisonment. By utilizing comprehensive payroll services, businesses can streamline reporting, manage accurate data collection, and ensure regular submissions, contributing to both short-term and long-term success.
What information must be included in a certified payroll report?
Certified payroll is mandatory for contractors and subcontractors who work on various types of federally funded construction contracts that are over $2,000. While the term “construction” is broad, it can apply to a variety of activities such as painting, decorating, cleaning, plumbing, drywall and electrical. Certified payroll reports are a mandatory requirement for contractors working on federally funded… As regulations evolve, staying informed and adaptable is key to successfully navigating certified payroll requirements and maintaining unwavering compliance. Reviewers will confirm you’re paying each worker the prevailing wage rate they’re entitled to. The WH 347, is a Certified Payroll report which is the most commonly required report.
The report must detail each employee’s work classification, which is the specific job title or role performed on the project. Employers must also record the daily and weekly hours worked by each employee, distinguishing between straight time and any overtime hours. States determine the prevailing wage by referring to the federal prevailing wage and conducting surveys of local wages. If the prevailing wage in your state exceeds the federal prevailing wage, you’re required to pay the state’s rate. Keep in mind that if you make mistakes on your certified payroll, you cannot make changes.
Company information
- Overtime payment at one and one-half times the employee’s basic rate of pay for all hours worked over 40 in a workweek may be required for certain covered contracts.
- Payroll reports give employers a bird’s-eye view over a crucial HR process.
- While not every business must file these reports, individuals working on public works projects or government contracts often do.
- To avoid serious penalties for noncompliance, it’s a good idea to familiarize yourself with what certified payroll is and how it works.
For contractors, eComply is more than just a requirement; it’s a competitive advantage. In short, without certified payroll, contractors risk not getting paid on time. Even payroll professionals have to earn a specific accreditation to become a Certified Payroll Professional.
You can be subject to costly penalties if you fail to what is certified payroll requirements anddefinitions follow certified payroll requirements. By staying compliant, you protect your business, your employees, and your ability to continue working on government-funded projects in the future. By 2025, certified payroll compliance has become even more digitally streamlined, with many agencies requiring electronic submission through platforms like SAM.gov. Discover how our diversity compliance, prevailing wage labor compliance, and grant management solutions help you streamline processes and allow you to better support your community’s small businesses. For agencies, it provides a verifiable framework for oversight, allowing agencies to confidently manage a network of contractors while upholding legal and ethical standards. This transparency builds trust with stakeholders and protects the agency’s reputation.
Failure to meet this requirement or submitting certified payroll reports that are incorrect or late may put employers at risk for penalties. Payroll processed under a specific government contract (such as government-funded construction projects) requires special payroll reports that must be filed weekly. Certified payroll requirements can vary depending on the state where the work is performed. The online certified payroll reporting solution requires users to log in for submitting reports. Certified payroll is a detailed weekly report submitted by contractors and subcontractors working on public construction projects. This report serves to verify that all employees receive prevailing wages and fringe benefits as mandated by law.
Step 8: Submit the Report Weekly
Its purpose is to ensure workers are compensated fairly according to predetermined wage rates for their area and job classification. Businesses with a federally funded or assisted contract of over $2,000 for the construction, alteration, or repair of public buildings or public works to complete certified payroll reports. The form also requires indicating the prevailing wage rate for each work classification. After weekly payroll data is entered, the “Statement of Compliance” section must be completed and signed by an authorized representative. This signature certifies the accuracy of the reported payroll data and confirms compliance with federal prevailing wage requirements.
Who needs to submit certified payroll reports?
This report is typically submitted each week using the Wage Hour Form WH-347. However, contractors may submit an equivalent form, such as a payroll system report, if it contains all required details and includes a signed Statement of Compliance. With updated regulations in 2025, digital submission and stricter enforcement make it more important than ever to accurately complete and submit certified payroll reports on time.
To make your life easier, reduce the risk of mistakes and ensure you never lose important data, use an automated payroll solution. Even though you will have to invest in it, it will speed up your process and increase accuracy. Gather each employee’s full name, address, Social Security number, job classification, and hours worked. Simplify your payroll with tailored solutions for construction, including taxes, compliance, unions, and more.
What is a certified payroll professional?
However, you can submit a new record with the correct information, which will take precedence. Federal wage determinations for prevailing wages are in the Sam.gov database. Once you know what data your organization must include on its certified payroll report, you can begin completing it.
Designed for business owners, CO— is a site that connects like minds and delivers actionable insights for next-level growth. To help avoid noncompliance, carefully read and understand the terms of your organization’s contract before executing it. Successfully navigating the evolving regulatory landscape requires a conscious, constant and deliberate effort.
- However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
- These state and local regulations extend certified payroll requirements to public works projects funded at their respective levels.
- It ensures that workers receive the correct wages and that contractors comply with labor laws.
- Correctly following certified payroll requirements starts with an organized system.
Construction-specific platforms like LCPtracker and Payroll4Construction are also designed to handle prevailing wage requirements and produce compliant reports. A certified payroll report requires specific, comprehensive data to ensure compliance with prevailing wage laws. Each employee listed must have their full name, address, and Social Security number provided for identification. Certified payroll applies to contractors and subcontractors undertaking federally funded or federally assisted construction projects.