We sat down to talk with our Director of HR Services, Andrea Porter, regarding the top issues companies face when doing prevailing wage work. As the head of human resources, she has a lot of insight into the real-world challenges companies deal with every day as they navigate the tricky waters of prevailing wage regulations. She also has a bit of advice for companies new to government contracting.
- What are the top payroll challenges companies face when they take on prevailing wage jobs?
Getting worker classifications correct is one of the biggest challenges employers face. There are a lot of areas that can trip you up, starting with using the correct wage determination. You need to use the right version of the wage determination to assign the correct prevailing wage to workers in each classification. Then, employees must be paid correctly for each job that is performed, which may change throughout the day.
That leads to another big challenge, which is tracking your employees’ time. You certainly don’t want to overpay, but you don’t want to be out of compliance either. Accurately recording time worked according to the correct classification and wage will save you time and money, especially when it comes to reporting all of this information to the appropriate agencies.
2. What advice would you offer to companies new to doing prevailing wage work and certified payroll?
I would recommend using an all-in-one system to correctly assign employees to jobs or tasks and pay them the correct wage, down to the minute. This will save hours of manual entry, improve accuracy, and aid your overall payroll and reporting processes, especially if wage restitution is needed. Let’s say a city auditor visits your worksite and later says your workers were misclassified on your reports. You are likely going to have to make the change, pay wages to employees as needed, then recreate and refile the reports. A good system will make that easy to do in just a few simple steps rather than requiring you to process each one manually. I also don’t recommend manual time tracking for any company, especially when doing prevailing wage jobs. So having a digital time tracking solution in place is essential.
3. What are the most common mistakes companies make when doing certified payroll?
We commonly see employers paying the wrong wage for the work that was performed. This may be a result of using the wrong version of the wage determination, which often happens when the employer doesn’t understand the requirements of the contract or jurisdiction. Not paying overtime correctly is another common wage payment error. Prevailing wage work often has different overtime requirements than private jobs, so, in addition to understanding the laws generally, it is really important to thoroughly review the wage determination for its specific overtime requirements.
Another common mistake is simply not understanding the requirements for government contractor work. It is so important to review the laws that apply to the jurisdictions in which the work will be performed, including registration and reporting requirements.
Andrea Porter, has over 20 years of experience in all areas of HR management in various industries including consumer electronics, technology, finance, manufacturing and automotive industries. She now serves as the Director of HR Services for TAG and eBacon. Read more about our management team.
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.