Contractors and subcontractors that work on government projects are very familiar with the regulations, and complications, that come with the territory. Apart from the pre-project work that must take place, like creating winning bids and landing the job, there are weekly certified payroll reports that must be submitted to stay compliant and out of trouble.
While only digital tools can truly simplify your certified payroll reporting workflow, there are things you can do to make the process more efficient and less error-prone. By double checking these areas before submitting your certified payroll report, you’ll reduce errors that lead to report rejection.
1.Work classification assignment and tracking
All workers must be paid the correct wage based on their work classification. These are found in the wage decision portion of your contract and are set by the government in most cases. Throughout the day, one worker’s classification may change based on the work they do. This means a single employee may be classified as a laborer for part of the day and switch to a drywaller before their shift is complete. Each of these roles must be tracked, and the rate of pay must be correct based on the wage decision. Checking this information for each worker listed on the certified payroll report can reduce errors and the need for filing amended reports. Reminding workers about the importance of carefully switching tasks, selecting the correct task and quickly reporting mistakes can also help limit these types of issues.
2. Incomplete or inaccurate employee/project details
The government requires that all certified payroll reports contain a very specific list of information. This includes general data like your company’s address, project name and location and contract or project number. Additionally, each workers’ name, an individual identifying number and the following information must be included:
- Number of withholding exemptions
- Work classification
- Dates and hours worked
- Total hours
- Rate of pay
- Earned gross and weekly net wages
Missing or inaccurate information in any of these areas, for any of your workers, can lead to rejection. It’s important to note that inaccurate information may also lead to wage restitution, fines or legal complications. Double checking everything on this list before you submit your report can save you hours of work to correct and resubmit weekly payroll reports.
3. Wage determinations
Wage determinations list the hourly wage and fringe benefit rate for labor categories covered by prevailing wage laws. This includes both federal and state laws that govern public works projects. These are not static rates; they change based on surveys which are usually conducted once a year in most cases. Additionally, the wage determination you follow depends on who the awarding agency is, which may be federal, state or even municipal. Reading wage determinations can be difficult and errors can become large problems involving wage restitution, fines or debarment from federal projects. Check to make sure you’re using the correct wages before you submit your certified payroll report to avoid the need to make corrections and submit amended reports.
Time tracking errors
Time tracking errors are always problematic because they lead to paychecks that are short or more than they should be. When you’re doing prevailing wage work, however, these types of errors can lead to far bigger problems. For instance, if you track and report too few hours for Worker A at one work classification rate, you’ve underpaid them in both wages and fringe benefits. If the work classification rate is also wrong, you must fix that error as well. After you’ve found and corrected the error, you have to make restitution and resubmit your certified payroll report. Failing to do so can lead to fines, legal action or debarment from government projects. Double checking this data before you submit your weekly report can save you hours of frustrating work.
Weekly certified payroll reports are time consuming, especially if you’re working on more than one prevailing wage job or have a considerable workforce. Finding, correcting and submitting amended reports is equally complicated and burdensome. While using a certified payroll platform can greatly simplify the process, you can make your life easier by creating a system to find problems prior to submission.
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.