Contractors working with federal contracts and federally-assisted projects are required to have a certified payroll. And this can mean needing a certified payroll specialist.
A government construction project has several requirements such as building materials acquisition, compliance with building codes and regulations, and meeting a series of deadlines. And, in addition to vendors and suppliers being paid, so do workers. And this is where things can get complicated with a federally funded project.
Ensuring Compliance With Federal Certified Payroll
Government building contracts require that a construction firm must comply with several federal laws and one of the most stringent tends to be federal certified payroll requirements. One aspect of this requirement is that all government contractors must submit a certified payroll for each job.
This specialized payroll management is based on a federal law known as the Davis-Bacon Act of 1931 , which set wage rate requirements on government funded construction projects, or "public works projects." A key component of the Act requires that contractors and sub-contractors who perform work on any government construction projects, and federally-assisted projects over $2,000.00, are required to submit weekly-certified payroll reports to ensure they are complying with government contract regulations.
Almost every government contractor is subject to the Davis-Bacon Act, and there have been an increasing number of construction firms and sub-contractors over the last decade that are also now under these regulatory requirements as a result of the American Recovery and Reinvestment Act of 2009 (ARRA).
Certified payroll requirements apply primarily to the alteration and/or repair of public buildings and Public Works Projects. And since the passing of the American Recovery and Reinvestment Act, this type of work has included weatherization.
Certified Payroll: A Brief Overview
So, what is a certified payroll and why are construction firms required to submit one on a weekly basis?
Essentially, a certified payroll is a company's accounting of everything paid out on a contract performed for a government client. This is accomplished with a detailed report that records all hours worked, the wages paid to each employee, and the specific jobs those employees performed.
A certified payroll is a specially formatted payroll report that typically consisting of these two pages:
- A Certified Payroll Report which is information about who worked on the job, how much you paid them, etc.
- A Statement of Compliance that requires the original signature of a company official and is signed under penalty of perjury.
The purpose of a certified payroll is to provide the government with a form of documented oversight, which assures that federal contractors have compensated employees in accordance with requirements of "prevailing wages."
Prevailing wages are typically the average wages paid for a given job in a particular local area such as a state or county. With the passing of the Davis-Bacon Act into law in 1931, the legal basis for the prevailing wage requirement was established.
At that time the labor fairness legislation created a prevailing wage system, as well as the certified payroll structure. In addition to the Davis-Bacon Act, many states have since passed similar legislation, which means construction companies are required to navigate both the federal and possibly state requirements when working with government contracts.
Maintaining Certified Payroll Reporting
Ask any contractor working on a federal project and you will find that completing and submitting weekly certified payroll reports are time-consuming and often frustrating tasks prone to error even for relatively small projects.
The U.S. Department of Labor's form WH-347 and WH-348 are fairly simple, however, it's estimated that completing the forms with information for eight employees on one job, for example, can take about an hour.
There is more required in addition to the weekly certified payroll report. Contractors working on government projects. These contractors must also submit other required forms including Fringe Benefit Reports, ARRA Reports, and EEOC/Work Utilization Reports.
In addition to guaranteeing that fair labor practices are followed across the country, the major purpose for staying in compliance is that firms that fail to comply will not receive any additional government work. And the financial penalties for failing to submit weekly certified payrolls could negatively impact a business.
For these reasons, having easy to use and highly accurate reporting tools for construction payroll, along with a certified payroll specialist, are invaluable assets. And the larger the project the greater the complexity of certified payroll preparation.
But a cost-effective and strategic alternative is to take advantage of certified payroll services like those Accuchex offers with Time2Pay.
Your Certified Payroll Specialists
Accuchex's Time2Pay provides construction employers with a simple and user-friendly interface for tracking all the information required on certified payrolls, including dates worked, hours worked, job codes, pay codes, and more. Time2Pay also offers you the ability to allocate workers to specific construction projects and tracking their hours worked on each project.
If you have different groups of employees working on different projects, you want to centralize the process. Time2Pay certified payroll software allows for the input of daily work information for all the projects your construction company is engaged with.
Detailed report generation provides protection against audits and dozens of reports are available directly through Time2Pay for your records. In conjunction with experienced certified payroll processing services, Accuchex provides construction companies with access to every tool necessary for accountability and for staying on top of their legal requirements.
The value that comes with winning government contracts means payroll compliance is of clear importance. You can trust in the experience and accuracy of Accuchex's certified payroll services. And with that confidence, you can sign your Statement of Compliance, which certifies the accuracy of the payroll, without hesitation.
Do you have any questions related to certified payroll or outsourced certified payroll services. Please connect with us online for a complimentary certified payroll demonstration or contact us at (415) 883-7733.