Few administrative tasks could be considered fun, but they are a necessary burden of doing business. For government contractors, certified payroll falls into this category. While it’s a requirement of taking on prevailing wage work, certified payroll creates a significant amount of stress for construction companies. It also dominates the work week and creates risk by opening your company up to potential compliance concerns.
While there are many potential pitfalls of processing certified payroll, these are some of the top complaints we hear. Learn all about them, including some tips that can make your work week easier.
It takes too much time
There’s no way around it, contractors and subcontractors are busy people. Managing projects, keeping their teams on track and winning new bids are all time-consuming tasks. Add weekly payroll to the list and you have more than a full week’s worth of work. When you’re talking about certified payroll, however, you have a whole new level of administrative work to contend with. There are weekly reports to be filed and requirements to follow regarding wages, time and work classification tracking. There are also fringe benefits to manage. The compliance burdens alone can be overwhelming, stretching any payroll team to their limit.
The solution:
You can’t skimp on any of the requirements involved in certified payroll, so there are only a few options available that can help reduce the administrative burden. Other than hiring additional staff to handle the workload, you may consider the following solutions:
- Create a streamlined certified payroll workflow that begins with capturing time and ends with reporting. Use the same steps each week, checking off each task as you go. This can reduce errors and help you catch mistakes early in the process.
- Manual tasks take more time and create additional opportunities for errors, so limit them as much as possible. Switching to digital time tracking is a simple example of how to reduce time-consuming manual steps.
- Switch to payroll software that’s capable of handling the specific requirements of construction payroll. The right software can reduce errors, make reporting simple and dramatically reduce the time it takes to do payroll each week.
Finding and fixing mistakes is difficult
Any process that has a lot of steps or moving parts is more likely to be error prone. Certified payroll is no different, in fact it may just set the standard for difficult processes. Other than the internal challenges of collecting time, verifying data and reporting, you also have to worry about external factors such as changing wage determinations. You even have to be concerned with new legislation that impacts your compliance workflow. Once you find mistakes, you have to fix them. For most companies this involves manually correcting the information in multiple places. If the mistake resulted in paying someone too little, you have to pay wage restitution and resubmit your weekly report.
The solution:
Limiting mistakes is your first line of defense, but realistically it’s impossible to completely eliminate errors. Your time is better spent finding ways to reduce and catch errors as early as possible. Here are a few ideas to get you started:
- Create a detailed certified payroll checklist with common errors to double check before submitting your weekly report. This may include things such as verifying hours, worker classifications and pay rates.
- Switch to digital time tracking to make it easier for workers in the field to track hours and switch roles. An advanced time and attendance system will pay for itself by reducing mistakes, eliminating buddy punches and increasing the accountability of your workforce.
- Make training a priority for workers in the field and your admin team. For instance, workers may not understand how important it is to track their time and changing roles accurately. Does everyone know what needs to happen when a mistake has been made? Ongoing training can make recovering from payroll and reporting errors far easier.
Getting clear answers and help is impossible
All you have to do is visit a government website or call up a government agency to see just how hard it is to get help. Construction companies that do prevailing wage work find themselves in the precarious position of needing to comply with complicated regulations without actual help or support. For states and municipalities with their own prevailing wage laws, the problem is compounded. The lack of support is an especially important concern since mistakes can lead to financial penalties, legal action or debarment from government contracts.
The solution:
It’s difficult to solve this problem because so much of it is out of your control. What you can do, however, is work to elevate your understanding of the rules and regulations. Make it a point to regularly check in with official sites and read official guidance as much as possible. The following steps can help you stay informed:
- Become familiar with all applicable government sources of information. The most currently published federal wage determinations can be found here. There is also a compliance assistance page, which you can find here. If your state has prevailing wage laws, bookmark them as well. Most of the time this information will come from your state’s board of labor.
- While it is hard to get personal help from the federal government on compliance questions, it’s a bit easier to talk to local offices of the Wage and Hour Division (WHD) of the U.S. Department of Labor. This is a better path to help than using the “contact us” information provided on the main federal website. You can find information your state’s WHD here.
- If you use a payroll service, reach out to them for the help you need. They should have experts on certified payroll standing by to help you with your payroll, reporting and compliance issues. It’s important that they understand the construction industry in great depth so that they provide you with accurate help.
Visit our Resource Hub to learn more about certified payroll, reporting and related topics to help your construction company thrive.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.
The material presented here is educational in nature and is not intended to be, nor should be relied upon, as legal or financial advice. Please consult with an attorney or financial professional for advice.
