Certified Payroll

The certified payroll process is used to promote fair labor practices. Certified payroll confirms that the contractor is paying their workers the correct prevailing wage and the construction company is paying taxes on all taxable earned dollars.

The actual report serves as proof of accountability and includes:

• A breakdown of the total number of hours worked to highlight which hours are considered prevailing wage
• The taxes, potential fringe benefits and, in some cases, garnishments that are being paid out of the prevailing wage labor hours

There are two main ways to put together a certified payroll form:

• Manual Entry — The administration either writes or types out all employee information each week, using either print forms or electronic spreadsheets
• Payroll Service — A construction-specific payroll service will automatically generate weekly certified payroll reports
  • These payroll professionals stay up to date on compliance regulations and wage determination

Manual entry can get complex when laborers perform different jobs throughout the week because different localities and varying job titles are involved, which impacts the hours that are considered prevailing wage. This is the type of information that has to be broken down in the weekly payroll report for each worker.

For contractors with limited amounts of time, a construction payroll service can be a great asset, especially one equipped to itemize workers’ hours automatically.

A certified payroll report is traditionally submitted on Form WH-347. City, state and federal certified payroll records may differ depending on what information government agencies want to see.

Agencies may require either or both print and electronic certified payroll formats. Although each reporting agency has different certified payroll requirements, there is some similar information requested on all forms, such as:

• Employee Information — Name, address and (potentially) social security number
• Hours — Hours an employee worked that week and a complete breakdown of the pay rates
• Earnings — Gross and net earnings for the week, including overtime hours
• Taxes & Deductions — All tax withholdings and deductions taken out of prevailing wage earnings
• Job Classification — The role or position an employee worked in
• Fringe Benefits — Any fringe benefits provided to the employee for the week that are associated with the prevailing wage

Agencies may require extra steps or mandate different information, but having these standard details available can make the filing process run more efficiently.