What is certified payroll?

When is certified payroll required?

On federal construction contracts over $2,000 and on many federally assisted projects. The Davis-Bacon Act applies to every contract in excess of $2,000 for construction, alteration or repair, including painting and decorating, of public buildings and public works, and requires the contract to list the minimum wages for each class of worker (40 U.S.C. 3142(a)). Those lists are the wage determination. The weekly payroll requirement in 29 CFR 5.5(a)(3)(ii) covers both Davis-Bacon and Related Acts work, the federal funding statutes that carry the same prevailing wage terms.

Who is covered

Laborers and mechanics employed on the site of the work, paid at least once a week, regardless of any contractual relationship claimed between them and the contractor (40 U.S.C. 3142(c)).

Who is not

Private jobs with no federal contract or federal assistance. State and local prevailing wage programs may still apply; in California, for example, Labor Code 1776 sets payroll record rules for public works.

Who submits certified payroll, to whom, and when?

Every contractor and subcontractor with covered workers, every week covered work happens. Payrolls go to the federal agency if it is a party to the contract; otherwise to the applicant, sponsor, owner or other entity that keeps the records and passes them to the funding agency. The prime contractor is responsible for submitting all subcontractors' certified payrolls (29 CFR 5.5(a)(3)(ii)(A)).

What goes on Form WH-347?

One row per worker per classification, with daily hours, rates, fringe benefits and pay. The form itself is optional: payrolls may be submitted on Form WH-347 or in any other format, as long as they carry the same information and a Statement of Compliance with identical wording. Never include a full Social Security number or home address on the weekly transmittal; an individually identifying number such as the last four digits is enough (29 CFR 5.5(a)(3)(ii)(B)).

What does the Statement of Compliance certify?

That the payroll is right and every worker was paid in full. Under 29 CFR 5.5(a)(3)(ii)(C) the signer certifies that:

• The payroll information and the supporting records are correct and complete.
• Each worker was paid the full weekly wages earned, without rebate, directly or indirectly.
• No deductions were made beyond those permitted under 29 CFR part 3.
• Each worker received at least the applicable wage rates and fringe benefits, or cash equivalents, for the classification of work actually performed.

How do fringe benefits work on certified payroll?

The wage determination sets a basic hourly rate and an hourly fringe amount, and you can meet the fringe part with contributions to bona fide plans, with cash in lieu, or with a mix of both, according to the WH-347 instructions. Plan contributions count as wages paid (29 CFR 5.5(a)(1)(i)). Three rules decide whether the numbers hold up.

• Annualize plan contributions. The hourly credit for a plan contribution is the total cost divided by all hours worked, on private and covered work, over the period the cost is attributed to (29 CFR 5.25(c)(1)). A defined contribution pension plan with immediate participation and vesting within the first 500 hours is excepted.
• Overtime is figured on the basic rate. The contractor's fringe benefit contributions or costs may be excluded from the rate overtime is computed on; DOL's own example computes overtime on a $3.00 basic rate even though the worker was paid $3.50 in cash including fringe (29 CFR 5.32).
• Fringe is owed on every hour worked. Column 6B is hours worked times the hourly credit, so overtime hours carry the full fringe amount at straight time; only the overtime premium is left off it.

Worked example: one electrician's week on a covered job

Made-up wage determination: electrician, basic rate $52.00, fringe $27.00 an hour. The contractor puts $20.00 an hour into health and pension plans (already annualized) and pays the other $7.00 in cash. The electrician works 44 hours on the covered project.

What are the most common certified payroll mistakes?

Most errors start before the form: hours written up late, classifications guessed, and fringe credits never checked. Before signing each week, run through this list.

• Each worker is classified by the work actually performed, with a separate row for each classification.
• Daily hours come from a record made at the time, not filled in at the end of the week.
• Overtime counts every hour that week, including other jobs and the shop.
• Apprentices are individually registered and within the allowed ratio; otherwise they get the full rate for the work performed (29 CFR 5.5(a)(4)(i)).
• Plan contributions are annualized over all hours, and cash in lieu is in column 6C.
• Fringe is paid on overtime hours too, and overtime premiums use the basic rate.
• Deductions are on the 29 CFR 3.5 list or approved by DOL.
• No full SSNs or home addresses on the weekly transmittal.
• The Statement of Compliance has an original or valid electronic signature, not a scan.
• Subcontractor payrolls are collected and submitted by the prime every week.

How ZeroBadge handles this

ZeroBadge aids certified payroll reporting by supplying verified hours by worker, day and jobsite. It does not produce or file certified payroll on its own; final certified payroll reports require review by a qualified person.

Hours come from a company badge each worker wears, split by jobsite, so time on the covered project and time on every other job that week sit in one record. Classifications, rates and fringe stay with your payroll and compliance people. See certified payroll time tracking.