Processing payroll can be a complicated and time-consuming task, especially for construction companies that do prevailing wage work. This is why so many contractors use payroll software or hire an outside payroll service. While outsourcing or utilizing technology can make life easier, prevailing wage contractors still have plenty to do no matter how payroll gets done. This is because of the heavy regulations surrounding certified payroll and reporting required.
Exactly what does your company need to do to stay compliant with all prevailing wage laws? The following certified payroll checklist covers the critical steps you need to take from start to finish. And although your steps will vary based on the software you use and your current processes, this list will ensure critical elements are in place to keep you compliant.
Review employee information
- Check basic employee information for accuracy and update as needed, including name, address and contact information.
- If you’ve added new employees, make sure everything is in order for their first payroll including direct deposit, tax and benefit withholding information.
- Update withholdings including taxes, garnishments and changes to employee benefits payments.
Verify and approve hours
- Review your employees’ reported time for accuracy. This step will look different based on how employees report time:
– If you manually copy time from timecards, you’ll want to double check that the information was correctly transferred.
– If you upload the time directly from a program, you can simply verify that the total hours are correct. No matter the method, however, you’ll want to verify that each employee’s hours are correct. - Make sure that all work classifications are correct according to what the employee should be reporting. If something looks off, double check it before proceeding.
Verify prevailing wage information
- Check all prevailing wage and fringe benefit information to make sure everyone is getting the correct pay. IF nothing has changed from week to week, you can simply scan these details to make sure things look correct. You’ll want to spend more time verifying this on employees that switch work classifications AND for new employees and on new projects.
Final check before processing
Before you process direct deposits or print live checks, give everything one last look. By this point in the process, you should have already confirmed crucial details, so you just need to make sure that things look as expected. Consider doing a spot check, especially on employees that have changed or for new projects, to serve as a final checkpoint.
Process your direct deposits or print your live checks. For those printing live checks, make sure you have positive pay information if your bank requires it.
Reporting post payroll
Most organizations require some post-payroll reporting, which is needed by various department leaders and stake holders. Depending on your company, you’ll want to include this step in your process.
Prevailing wage construction companies need to extend their payroll process through the certified reporting step as required by law. For state jobs, you will need to follow the process required by your state which usually includes reporting payroll data to your states Department of Labor or Department of Industrial Relations.
For federal prevailing wage jobs, you must report payroll data to the Department of Labor, Wage and Hour Division using the following form:
Form WH-347 for federal certified payroll reporting
Payroll checkpoint tips
- Your payroll process may require different steps based on a number of factors, including if you’re using a payroll service or software. Include any additional steps and create an official check list that gets used every time payroll is processed.
- Establish checkpoints throughout the process to tie out wages and hours to help ensure that the everything is matching up from start to finish.
- Keep important info handy so you can easily set up new jobs, add new employees and handle reporting. This includes but is not limited to your Federal tax ID number, local tax ID numbers, information on any withholding accounts. This is sensitive data, so make sure you keep it secure.
Learn more about certified payroll and reporting with the following certified payroll resources:
Certified payroll: What it is and how it works
Recording keeping tips for construction companies
Payroll and prevailing wage mistakes that lead to Davis-Bacon violations
How to fill out certified payroll reports: Form WH-347
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.
