The Most Common Certified Payroll Mistakes

It’s no secret that finding big jobs helps pave your road to success. Once you secure a government contract, you could find it leads to multiple jobs to establish yourself as a trusted resource for future work. However, government-funded contracts over $2,000 can lead to payroll challenges as you are required to complete certified payroll reports each week nationwide.

If you are starting out on your first government job, it’s important to understand the ins and outs of certified payroll and how to manage it properly. Here we look at the most common mistakes when submitting certified payroll to help reduce stress and make the process easier.

Time Tracking Inaccuracies

Using manual timecards can increase the risk of human error. Accurate recording of time is particularly important in certified payroll because you must account for not just the hours, but also the work classification. The time it takes to reconcile an error can take hours. Worse, if you don’t catch the error you can end up being fined by the government. This eats into your bottom line.

The Solution

One of the best ways to overcome tracking inaccuracies is to use a digital tracking system. However, you need to look for software that will address all the specifics of certified payroll reporting requirements. Your system must allow you to track:

• Hours worked
• Rate of pay
• Type of labor performed by each worker

Software makes time tracking easier allowing you to avoid time-consuming errors that cost money.

Incorrect or Unreported Work Classifications

Failing to record each worker’s classification can lead to costly errors and penalties. Classifications are based on the role and tasks performed such as carpenter or iron worker. However, it goes beyond that. For example, you might have an employee classified as a carpenter, but some days they might be performing work that falls under a different classification. Although this might seem unimportant, the different roles must be recorded, even if one person is performing them.

This is because under government contracts there is an expectation that each worker is paid a certain wage based on a specific role. If you are not accurately tracking based on work classification, this is viewed as an error by the government. Therefore, you need an easy way to record the work accurately based on the tasks performed and the work classification those tasks fall under.

The Solution

Payroll software provides you with the easiest way to track work classifications and remain compliant. Each employee will be paid the correct wage based on the work completed, even if they are performing multiple roles.

Wage Rate Errors

When working under a government contract, there are wage laws that determine what wage is paid based on the work provided. According to the Davis-Bacon Act (DBA) and the Service Contract Act (SCA) your workers must be paid the proper determinations based on an assigned hourly wage as well as a fringe benefit rate. This applies to every labor classification as well as mechanics.

New wages and benefits are published each year using specific wage determination (WD) numbers. It’s your responsibility to ensure you are paying the most recently posted wage from the Department of Labor website. You also must comply with any state wage laws. While you do have the opportunity to report your own errors, there is still the chance of facing penalties for errors found by the government.

The Solution

Certified payroll software ensures wage consistency based on the prevailing wage and fringe benefits so you can avoid errors and potential penalties.

Late Certified Payroll Submissions

For contractors new to the certified payroll process it’s easy to make late submissions for your weekly WH-347 forms. Because submitting certified payroll is so complicated and it can be difficult to understand all the rules, you might find your team has difficulty getting the reports prepared on time.

Learning how to assign the proper WD number alone can take hours each week, and the larger your workforce, the harder it becomes. This leads to the above mistakes and increases the risk for fines. Using a manual system with manual timecards also increases the risk for inaccuracies entered by your workers. All these issues combined lead to delays.

The Solution

It all boils down to finding a payroll software solution that allows your team to process certified payroll submissions accurately and efficiently.

Simple errors when submitting certified payroll can lead to fines, and even lost privileges for bidding on further government contracts. By understanding common errors, you’ll know what to avoid. However, using payroll software that addresses all the needs when submitting certified payroll is your best bet to remain compliant.

About the Author

Kayla is the Marketing Manager at Paypro Corporation overseeing all inbound and outbound marketing and sales efforts. She has 7+ years of experience working within the B2B and SaaS based solutions space and thrives on creating messaging and campaigns that introduce products and services to those who need them most.