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Certified payroll pointers for 2020

Understanding the basics of certified payroll and how TSheets supports reporting requirements

What is certified payroll?

Certified payroll is a federal form WH-347, submitted weekly to the agency overseeing a government contract. The form lists every employee, their wages, the benefits they’re entitled to, the type of work they did, and the hours they worked. It shows withholdings and gross wages and includes a statement of compliance.

Certified payroll updates for 2020

Since 2018, there have been ongoing talks about improving the existing infrastructure of the country’s interstate highways, bridges, and other parts of the transportation system. In July 2019, S.2302 was introduced and referred to the Senate Environment and Public Works Committee. In August, the bill was placed on the Senate legislative calendar.

S.2302, or America’s Transportation Infrastructure Act of 2019, provides funding for much-needed road and transit system improvements. If passed, the bill “authorizes $287 billion from the Highway Trust Fund over five years in investments to maintain and repair America’s roads and bridges.” The bill would also funnel some $10 billion into grants for disaster-resilient projects, and incentive programs for projects that would lower highway-related carbon emissions. Overall, this could bode well for construction businesses bidding on government contracts.

What makes a payroll report “certified”?

A report is “certified” when it has a signed statement of compliance indicating the payroll forms are correct and complete, and each employee has been paid no less than the proper Davis-Bacon prevailing wage for the work performed.

When a company owner or head of payroll puts their written signature on the statement of compliance, they are doing so understanding the willful falsification of any payroll information may subject the contractor or subcontractor to civil or criminal prosecution.

Common mistakes to avoid

Creating and submitting a certified payroll report can be problematic for contractors who work on public works projects or government-funded construction projects. Particularly when they use QuickBooks for their online payroll services.

Here are some common certified payroll mistakes and misconceptions:

  • Some contractors and payroll providers think, to complete and submit a certified payroll report, they must be a Certified Payroll Professional (CPP) and pass some sort of exam. That’s not true.Anyone can become a Certified Payroll Professional, provided they meet the American Payroll Association’s criteria. It’s extremely difficult to become a CPP, but any contractor’s payroll provider can complete and submit a certified payroll report, though it helps if that provider has previous experience.
  • Some contractors and payroll providers believe one payroll form or format will meet certified payroll requirements in all 50 states. This is also not true. Some states have multiple forms and electronic filing requirements.
  • Some contractors and payroll providers believe the certified payroll reports built into their preferred payroll software will provide them with all the necessary information and tools they need to complete the process. Unfortunately, that’s also not true.Anyone who must complete and file a certified payroll report shouldn’t rely entirely on a single tool. Instead, contractors and payroll providers need to be aware of their state’s particular regulations, which may require more in-depth reporting and even different filing methods.

Who creates certified payroll reports?

Anyone can learn how to complete a certified payroll report, so here are a few examples of questions on a certified payroll report:

  • Who works for you?
  • What type of work are they’re doing (work or trade classification)?
  • How many hours have they worked?
  • What were they paid?
  • How much did they earn (gross wages on this job and for the week)?
  • What was taken out of their paychecks (taxes, child support, garnishments, union dues, etc.)?
  • What was the net amount they took home for the week (gross wages for all jobs, WITHOUT taxes and other deductions)?

The biggest job is gathering the data and completing the form. The US Department of Labor estimates it will take 55 minutes to gather and compile the information for eight employees on a single report — not bad if you only have eight employees who only work on one job.

You could spend hours just collecting, reviewing, and confirming your payroll data, in addition to generating the actual paychecks and completing a certified payroll report. This work becomes more time-consuming the more employees you have and the more jobs you work on. It’s also highly error-prone if you are creating these payroll reports manually.

Questions related to certified payroll

Here are the steps, as written on the QuickBooks website:

1. From the Reports menu, choose Employees & Payroll > More Payroll Reports in Excel > Certified Payroll Report.
2. Follow the on-screen instructions to create the report. As you follow the instructions, the Certified Payroll Report Interview window will open to gather additional information.

For a more thorough explanation of how to create a certified payroll report using QuickBooks software, check out their resource page on certified payroll.

TSheets does not come with a certified payroll report option or download, as requirements for such reports vary for every government-funded construction project. The federal form WH-347 is available from the US Department of Labor.

However, TSheets provides employee wage data—such as an employee’s wages and hours worked and the type of work they performed—that can be used to complete a certified payroll report.

A certified payroll specialist (CPS) is someone licensed and accredited by the National Association of Certified Payroll Specialists (NACPS). The license is recognized in the United States and its properties. For more details about the certification process and requirements, visit the National Association for Certified Public Bookkeepers.

Prevailing wage is the average or majority hourly rate of pay, benefits, and overtime paid to the majority workers, laborers, and mechanics (including apprentices and trainees) in the largest city of a given county.

According to the Department of Industrial Relations for the state of California, “If there is no single rate paid to a majority, then the single or modal rate being paid to the greater number of workers is prevailing.”

Prevailing wage was defined in the Davis-Bacon Act of 1931.

Carpenters, electricians, plumbers, ironworkers, flaggers, craftsmen, welders, concrete finishers, longshoremen, power equipment operators, and helpers are all job classifications that fall under prevailing wage law.

Construction, waste management, and manufacturing are the industries most commonly fined for violating prevailing wage laws, due to their relevance to government construction, alteration, and repair projects.

California has many certified payroll requirements, including filling out the California Department of Industrial Relation (DIR) form A-1-131. For a complete list of forms and requirements for, visit our resources page. Not in California? This page also contains links to resources that break down the requirements on a state-by-state basis.

Like most states, California has its own prevailing wage laws. California’s prevailing wage law, in Labor Code section 1771, sets the minimum government contract threshold at $1,000. However, in California’s Labor Code section 1771.5, the threshold is set to $25,000 for construction work and $15,000 for alteration, demolition, repair, or maintenance.

TSheets automated time tracking can help contractors complete certified payroll reports-free for 14 days!