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A Contractor’s Guide to Certified Payroll

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Certified payroll is a specialized form of payroll reporting required for some government-funded projects, particularly in the construction industry. Here are some key points about it:

Prevailing Wage Requirements: Certified payroll ensures that workers are paid at least the prevailing wages, which are set by the government for each type of work and in each geographic area. This is to ensure fair pay on public projects.

Davis-Bacon Act: In the United States, this requirement mainly stems from the Davis-Bacon Act. This act mandates that contractors and subcontractors on federally-funded or assisted construction projects pay their laborers and mechanics at least the locally prevailing wages and benefits paid on similar projects.

Detailed Reporting: Certified payroll reports are more detailed than standard payroll reports. They include information like the worker’s name, identification number, job classification, hours worked, rate of pay, gross earnings, deductions, and net wages.

Form WH-347: Contractors typically use this standardized form in the U.S. for certified payroll reporting. This form reports the wages paid to each worker, their classifications, hours worked, deductions, and actual wages paid.

Weekly Submission: Contractors usually need to submit these reports weekly. Contractors who process payroll bi-weekly may have to process payroll each week. Failure to comply with the reporting requirements can lead to penalties, withheld payments, or disqualification from future government contracts.

Public Access: Certified payroll records are often required to be kept available for public inspection. This transparency ensures compliance with labor standards on public works projects.

Software Solutions: There are specialized software solutions available that can help contractors manage certified payroll reporting more efficiently, ensuring compliance with complex requirements. Contracting business management software such as Total Office Manager® from Aptora Corporation includes Certified Payroll capabilities.

Explaining Form WH-347

Form WH-347, issued by the U.S. Department of Labor, is a standardized form used for submitting certified payroll reports on federally-funded construction projects. Here are some detailed aspects of Form WH-347:

Purpose: The form is used to comply with the reporting requirements of the Davis-Bacon Act, which requires contractors and subcontractors to pay their laborers and mechanics prevailing wage rates. The form serves as proof that the workers on a project are being paid in accordance with these standards.

Components of the Form

Contractor’s and Subcontractor’s Information: This includes the name and address of the contractor or subcontractor, the project name, and the contract number.

Employee Information: Each employee’s name, address, and Social Security Number or identifying number are listed.

Work Classification: The specific type of work or trade each employee is engaged in (e.g., electrician, plumber).

Hours Worked: The form requires a detailed account of the number of hours worked each day by each employee, including overtime hours.

Rates of Pay: This includes the rate of pay for each employee, including any fringe benefits or cash equivalents.

Deductions: All deductions made from the employee’s wages, such as taxes, insurance, or union dues, are itemized.

Total Wages Paid: The gross wages and net wages paid to each employee during the pay period.

Frequency of Submission: The form is typically required to be completed and submitted weekly. Be sure to check on your company’s requirements.

Public Records: The completed forms are considered public records. They must be kept on file by the contractor for three years after the completion of the contract and must be made available for inspection by authorized representatives of the Department of Labor.

Electronic Submission: In many cases, contractors can complete and submit Form WH-347 electronically, which can simplify the process and reduce errors.

Importance of Accuracy: It’s critical that the information on Form WH-347 is accurate and complete. Any falsification or misrepresentation can lead to serious legal and financial penalties.

For businesses like HVAC, plumbing, electrical and other contractors working on government-funded projects, understanding and properly utilizing Form WH-347 is crucial to ensure compliance with labor laws and to avoid potential legal issues. Software solutions that assist in managing and automating this process can be particularly valuable in reducing the administrative burden and ensuring accuracy.

Instructions For Completing Payroll Form WH-347

General

Form WH-347 has been made available for the convenience of contractors and subcontractors required by their Federal or Federally-aided construction-type contracts and subcontracts to submit weekly payrolls. Properly filled out, this form will satisfy the requirements of Regulations, Parts 3 and 5 (29 C.F.R., Subtitle A), as to payrolls submitted in connection with contracts subject to the Davis-Bacon and related Acts.

While completion of Form WH-347 is optional, it is mandatory for covered contractors and subcontractors performing work on Federally financed or assisted construction contracts to respond to the information collection contained in 29 C.F.R. §§ 3.3, 5.5(a). The Copeland Act (40 U.S.C. § 3145) requires contractors and subcontractors performing work on Federally financed or assisted construction contracts to “furnish weekly a statement with respect to the wages paid each employee during the preceding week.” U.S. Department of Labor (DOL) Regulations at 29 C.F.R. § 5.5(a)(3)(ii) require contractors to submit weekly a copy of all payrolls to the Federal agency contracting for or financing the construction project, accompanied by a signed “Statement of Compliance” indicating that the payrolls are correct and complete, and that each laborer or mechanic has been paid not less than the proper Davis-Bacon prevailing wage rate for the work performed. DOL and federal contracting agencies receiving this information review the information to determine that employees have received legally required wages and fringe benefits.

Under the Davis-Bacon and related Acts, the contractor is required to pay not less than prevailing wage, including fringe benefits, as predetermined by 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 (laborers and mechanics) as cash in lieu of fringe benefits.

This payroll provides for the contractor to show on the face of the payroll all monies to each worker, whether as basic rates or as cash in lieu of fringe benefits and provides for the contractor’s representation in the statement of compliance on the payroll (as shown on page 2) that he/she is paying for fringe benefits required by the contract and not paid as cash in lieu of fringe benefits. Detailed instructions concerning the preparation of the payroll follow:

Contractor or Subcontractor: Fill in your firm’s name and check appropriate box.

Address: Fill in your firm’s address.

Payroll No.: Beginning with the number “1”, list the payroll number for the submission.

For Week Ending: List the workweek ending date.

Project and Location: Self-explanatory.

Project or Contract No.: Self-explanatory.

Column 1 – Name and Individual Identifying Number of Worker: Enter each worker’s full name and an individual identifying number (e.g., last four digits of worker’s social security number) on each weekly payroll submitted.

Column 2 – No. of Withholding Exemptions: This column is merely inserted for the employer’s convenience and is not a requirement of Regulations, Part 3 and 5.

Column 3 – Work Classifications: List classification descriptive of work actually performed by each laborer or mechanic. Consult classification and minimum wage schedule set forth in contract specifications. If additional classifications are deemed necessary, see Contracting Officer or Agency representative. An individual may be shown as having worked in more than one classification provided an accurate breakdown or hours worked in each classification are maintained and shown on the submitted payroll by use of separate entries.

Column 4 – Hours worked: List the day and date and straight time and overtime hours worked in the applicable boxes. On all contracts subject to the Contract Work Hours Standard Act, enter hours worked in excess of 40 hours a week as “overtime”.

Column 5 – Total: Self-explanatory

Column 6 – Rate of Pay (Including Fringe Benefits): In the “straight time” box for each worker, list the actual hourly rate paid for straight time worked, plus cash paid in lieu of fringe benefits paid. When recording the straight time hourly rate, any cash paid in lieu of fringe benefits may be shown separately from the basic rate.

For example, “$12.25/.40” would reflect a $12.25 base hourly rate plus $0.40 for fringe benefits. This is of assistance in correctly computing overtime. See “Fringe Benefits” below. When overtime is worked, show the overtime hourly rate paid plus any cash in lieu of fringe benefits paid in the “overtime” box for each worker; otherwise, you may skip this box. See “Fringe Benefits” below. Payment of not less than time and one-half the basic or regular rate paid is required for overtime under the Contract Work Hours Standard Act of 1962 if the prime contract exceeds $100,000. In addition to paying no less than the predetermined rate for the classification which an individual works, the contractor must pay amounts predetermined as fringe benefits in the wage decision made part of the contract to approved fringe benefit plans, funds or programs or shall pay as cash in lieu of fringe benefits. See “FRINGE BENEFITS” below.

Column 7 – Gross Amount Earned: Enter gross amount earned on this project. If part of a worker’s weekly wage was earned on projects other than the project described on this payroll, enter in column 7 first the amount earned on the Federal or Federally assisted project and then the gross amount earned during the week on all projects, thus “$163.00/$420.00” would reflect the earnings of a worker who earned $163.00 on a Federally assisted construction project during a week in which $420.00 was earned on all work.

Column 8 – Deductions: Five columns are provided for showing deductions made. If more than five deduction are involved, use the first four columns and show the balance deductions under “Other” column; show actual total under “Total Deductions” column; and in the attachment to the payroll describe the deduction(s) contained in the “Other” column. All deductions must be in accordance with the provisions of the Copeland Act Regulations, 29 C.F.R., Part 3. If an individual worked on other jobs in addition to this project, show actual deductions from his/her weekly gross wage, and indicate that deductions are based on his gross wages.

Column 9 – Net Wages Paid for Week: Self-explanatory.

Totals – Space has been left at the bottom of the columns so that totals may be shown if the contractor so desires.

Statement Required by Regulations, Parts 3 and 5: While the “statement of compliance” need not be notarized, the statement (on page 2 of the payroll form) is subject to the penalties provided by 18 U.S.C. § 1001, namely, a fine, possible imprisonment of not more than 5 years, or both. Accordingly, the party signing this statement should have knowledge of the facts represented as true.

Items 1and 2: Space has been provided between items (1) and (2) of the statement for describing any deductions made. If all deductions made are adequately described in the “Deductions” column above, state “See Deductions column in this payroll.” See “FRINGE BENEFITS” below for instructions concerning filling out paragraph 4 of the statement.

Item 4 FRINGE BENEFITS – Contractors who pay all required fringe benefits: If paying all fringe benefits to approved plans, funds, or programs in amounts not less than were determined in the applicable wage decision of the Secretary of Labor, show the basic cash hourly rate and overtime rate paid to each worker on the face of the payroll and check paragraph 4(a) of the statement on page 2 of the WH-347 payroll form to indicate the payment. Note any exceptions in section 4(c).

Contractors who pay no fringe benefits: If not paying all fringe benefits to approved plans, funds, or programs in amounts of at least those that were determined in the applicable wage decision of the Secretary of Labor, pay any remaining fringe benefit amount to each laborer and mechanic and insert in the “straight time” of the “Rate of Pay” column of the payroll an amount not less than the predetermined rate for each classification plus the amount of fringe benefits determined for each classification in the application wage decision. Inasmuch as it is not necessary to pay time and a half on cash paid in lieu of fringe benefits, the overtime rate shall be not less than the sum of the basic predetermined rate, plus the half time premium on basic or regular rate, plus the required cash in lieu of fringe benefits at the straight time rate. In addition, check paragraph 4(b) of the statement on page 2 the payroll form to indicate the payment of fringe benefits in cash directly to the workers. Note any exceptions in section 4(c).

Use of Section 4(c), Exceptions

Any contractor who is making payment to approved plans, funds, or programs in amounts less than the wage determination requires is obliged to pay the deficiency directly to the covered worker as cash in lieu of fringe benefits. Enter any exceptions to section 4(a) or 4(b) in section 4(c). Enter in the Exception column the craft, and enter in the Explanation column the hourly amount paid each worker as cash in lieu of fringe benefits and the hourly amount paid to plans, funds, or programs as fringe benefits. The contractor must pay an amount not less than the predetermined rate plus cash in lieu of fringe benefits as shown in section 4(c) to each such individual for all hours worked (unless otherwise provided by applicable wage determination) on the Federal or Federally assisted project. Enter the rate paid and amount of cash paid in lieu of fringe benefits per hour in column 6 on the payroll. See paragraph on “Contractors who pay no fringe benefits” for computation of overtime rate.

Source for Instructions: https://www.dol.gov/agencies/whd/forms/wh347

Aptora makes no claim of copyright for these instructions. This information was copied from the source linked above.

Individual State Reporting Requirements

Many states in the U.S. have their own specific prevailing wage and certified payroll reporting requirements, often in addition to the federal standards set by the Davis-Bacon Act. These state-specific regulations are generally in place for state-funded construction projects and can vary significantly from state to state. Here’s a general overview:

  1. California: Known for having one of the most rigorous sets of requirements, California mandates detailed certified payroll reporting for public works projects. This includes specific forms and electronic submission requirements.
  2. New York: New York State has its own prevailing wage laws and requires certified payroll reports for public work projects. The state provides specific forms for this purpose.
  3. Illinois: Illinois also has its own prevailing wage law. Contractors on public works projects must submit certified payroll reports to the Illinois Department of Labor.
  4. Washington: Washington State requires contractors to submit certified payroll records for public works projects, ensuring compliance with its prevailing wage laws.
  5. Massachusetts: Known for stringent requirements, Massachusetts requires detailed certified payroll reports for public works projects to ensure compliance with state prevailing wage laws.
  6. Oregon: Oregon requires certified payroll reporting for public works projects, with specific forms and details that need to be included in the reports.
  7. Connecticut: In Connecticut, contractors must adhere to state-specific certified payroll requirements on public works projects.
  8. New Jersey: Similar to other states, New Jersey requires certified payroll reporting for public works projects under its prevailing wage laws.
  9. Pennsylvania: Pennsylvania has its own prevailing wage act, requiring certified payroll reporting for state-funded construction projects.

It’s important to note that this list is not exhaustive, and many other states may have their own specific requirements. Additionally, these requirements can change, so it’s always a good idea to check the current regulations for a specific state. For businesses operating in multiple states, understanding and complying with these diverse requirements can be challenging, and specialized software that can adapt to different state requirements can be very useful.

Certified Payroll Software Help Topics

Certified Payroll Setup and Usage
Certified Payroll Register Report

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