Certified Payroll – Requirements & Definitions You Should Know

What is Certified Payroll?

Certified payroll is a weekly report submitted by employers on federally funded projects. If your business is submitting certified payroll reports, it’s essential that information is submitted accurately, within compliances, and on time.

With today’s payroll systems, it’s easy for businesses to automate their processes and ensure that certified reports are filed correctly. With customizable features, you can implement systems to handle the unique requirements of your business, including union or non-union state-specific reporting requirements.

Why Certified Payroll Reports are Required for Public Construction Projects

Certified payroll reports ensure that wages follow regulations set in the Davis-Bacon and Related Acts. Every state and city has different codes on the wage required to legally employ construction contractors. Your certified payroll report serves as proof that you are meeting these criteria.

Meeting Certified Payroll Criteria – Prevailing Wage

In order to stay compliant, your payroll report must show that you pay contractors the prevailing wage, at minimum. A prevailing wage is the minimum hourly rate plus benefits package public construction contractors are owed based on their geographic area and the type of work performed.

“How do I find my prevailing wage determination?”

Your contractors’ prevailing wages are determined by their location and the type of work they do. You can receive a wage determination on sam.gov by inputting information about your particular project.

Penalties for Noncompliance

Falsifying a certified payroll report or failure to submit can result in prosecution, fines, or termination as a government contractor, depending on the severity of the infraction.

How to Fill Out a Certified Payroll Report

Certified payroll is a report based on the federal Form WH-347. It lists details about every worker, such as wages, hours worked, and benefits. The certified payroll report is two pages long and includes:

• Specific information about your employees
• General information about your business
• Details about your federal project
• Contractors and subcontractors involved in the project
• Hours worked, rate of pay, and type of labor performed by each worker
• Fringe benefits and deductions

A report is certified when it has a signed statement of compliance that indicates the completed payroll forms are correct and each employee has been paid for the work performed. A written signature on the statement of compliance means that companies understand the willful falsification of any payroll information may be subject to civil or criminal prosecution.

In addition to standard payroll forms, certified payroll reports must be submitted any week that a company performs contract work in order to comply with the Department of Labor’s (DOL) requirements. Subcontractors must submit reports to the contractor they’re working for, while contractors submit reports to the federal agency financing the project.

Using Software to Make Certified Payroll Easier

Creating certified payroll reports using software can save you time, ensure your information is accurate, and help you avoid penalties from late submissions. Most systems are user-friendly and have simple processes to make filing certified payroll reports fast and easy.

Processing Payroll

Software systems can help with the processing of payroll by assigning the appropriate prevailing wage and fringe rates to an employee’s completed work. Software systems can automatically create a standard management document that includes the information needed for creating state and federal certified payroll reports.

Creating Reports

The online certified payroll reporting solution requires users to log in for submitting reports. By importing the processing information created in the software’s standard management document, the website will apply the required mappings, formatting, and other data manipulation needed to create your certified payroll for local, state and federal submissions.

Review and Submission

After creating the report online, it’s available for review. Verifying that the values are accurate and in compliance with the various government agencies can help avoid any errors. The edit feature allows users to make changes to the data and rerun the certified payroll report until it is submitted correctly.

Using software to meet certified payroll reporting requirements can help you maintain compliance without issue. In order to make managing your certified payroll easier, you can customize features to make reporting faster, more efficient, and accurate.

Common Mistakes to Avoid When Filing Certified Payroll Reports

Creation, processing and submission of an accurate certified payroll report can be a challenge for most contractors, especially if they lack expertise. Some of the common mistakes they make include:

• Using an incorrect occupational title or classification to define their business
• Reporting inaccurate hourly rates of pay
• Not explaining if a lapse in weekly payroll reports was due to no work performed
• Assuming they need to be a Certified Payroll Professional (CPP) to file correctly
• Using one form or format for all 50 states, when each state may have different requirements

Even if strict guidelines are followed, mistakes can still happen. While there are corrective measures that contractors can take to remedy their situation, continuous errors can result in failed bids on future projects, having payments withheld, or having to pay interest penalties.

If any part of the submission process of your certified payroll reports is too challenging or is creating problems for your business, consider seeking the help of a certified payroll support system. With the right help, you can save time, properly fill out the required paperwork, and ensure that your business continues to run smoothly through the entire project.

Paypro Competitive Advantages

At Paypro, we have the affordable workforce management solution your business needs to run efficiently, improve your employee productivity, and ensure that you’re compliant with federal requirements. Our team will work with you to understand your business, identify areas of improvement, and deliver custom integrations and automation to keep your business moving.

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.