How Construction Payroll Services Handle Construction Payroll Reporting

Contractors must manage construction payroll reporting because it is a critical element of running a successful construction business. Contractors must track a wide variety of payroll reports depending on the kind of projects they work on and the workers they hire; some reports may be more relevant to understand than others.

State and federal governments mandate certified payroll and new hire reports for construction projects, while others, such as labor and job costing reports, exist to help contractors evaluate and monitor labor costs and are not compulsory.

Once the different types of payroll reports are understood, they can be tools for contractors to boost their own efficiency. In this article, we will explore all the different reports and detail how construction payroll services can make completing them simpler.

Why Construction Payroll Reports Are Important

In the most general sense, construction payroll reports show that construction companies are keeping their labor costs in check. They also serve three other critical purposes, depending on the type of reporting.

• Government compliance: certain reports like certified payroll, new hire and EEO/minority reports are required by state and federal regulations.
• Union compliance: If contractors wish to employ union workers, they must complete union payroll reports to ensure compliance and transparency with that labor union.
• Financial monitoring: Job costing and labor reports are not regulated by law but are used to help contractors monitor and control labor costs.

Reporting also helps contractors identify where they can implement cost control, such as adjustments to budgets and crew sizes.

Finally, reporting gives valuable insight into your crew productivity, like worker performance and overtime trends, to help you make management decisions towards workforce and project optimization.

Types of Construction Payroll Reports

1. Union Reports

Union reports can be tricky because of collective bargaining agreements (CBAs), which act as a contract between the union and the employer and vary from union to union.

These reports include information like union affiliation, hours worked, trade(s), deductions (such as union dues) and contributions. As well as proof of compliance with union wage requirements.

Union reports are important because they help contractors stay transparent with labor unions, as well as provide necessary data for contractors to evaluate project costs.

2. Certified Payroll Reports

Davis-Bacon and related Acts mandated that federal construction contracts exceeding $2,000, must pay their workers the prevailing wage rates in the local area of the work.

Prevailing wage standardizes pay rates, benefits and overtime based on similar rates for the local area of the project. For example, the prevailing wage is what more than 50% (the majority) of workers are already being paid on similar projects and classification of that local area.

Contractors working on these public works projects must complete certified payroll reports to ensure compliance. Certified payroll reports require information on the worker’s name, hours worked, pay rate, work classification, fringe benefits and deductions.

These reports are a high priority, as they must be completed weekly to stay compliant with federal regulations. Although certified payroll reporting can be complex, it is vital that they are as accurate as possible, with a WH-347 form submitted every week to avoid project delays and penalty fees.

3. New Hire Reports

State and federal laws require contractors to report all new hires. The information is logged in a database to prevent unemployment fraud or used for child support verification.

New hire reports require worker name, address, date of hire, social security number, trade(s) and job title.

To stay compliant, contractors must submit new hire reports in an appropriate time frame. They benefit a contractor by providing verified employee information for tax and management purposes.

4. Job Costing Reports

A job costing report is a comprehensive listing of all cost, direct and indirect, related to a project. This includes a breakdown of costs for things like labor, materials, overhead and utilities.

These reports are critical for creating and optimizing a project budget. The more accurate job cost reports are, the better a contractor will be able to:

• Analyze profits
• Assess risks
• Allocate resources
• Evaluate performance
• Bid competitively
• Make informed decisions

Although not performed through payroll, job cost reports have valuable labor data that can be utilized for payroll-related purposes.

5. Labor Reports

Labor reports include all labor-related costs for any given project. These reports show the hours worked and overtime, as well as year-to-date and project-specific labor costs.

These can be further subdivided into more specific reports, such as:

• Labor burden reports: Evaluates the total cost of an employee (wages, taxes and benefits).
• Labor distribution reports: Determine how labor costs/hours should be allocated across varying projects and tasks.

This type of reporting is valuable for contractors to budget and calculate profitability.

For example, if labor reporting indicates that workers’ hours are inflated and do not align with productivity, the contractor can make informed adjustments to prevent cost overruns or delays.

6. Job Hour Variance Reports

These reports compare estimated to real labor costs and hours. The following report information includes:

• Scheduled hours and estimated costs
• Actual hours and costs
• Variances between scheduled and actual hours and estimated costs and actual costs
• Project and task details

Contractors use job variance reports to visualize how effectively costs are being allocated.

7. Fringe Benefit Reports

As part of the Davis-Bacon Act, contractors must report fringe benefits for any federally funded projects. Outlined costs for fringe benefits include:

• Sick, holiday or vacation pay
• Pensions and retirement
• Medical care
• Life insurance
• Workers’ compensation

Contractors must complete these reports to stay compliant with the federal and state governments.

8. EEO/Minority Compliance Reports

To ensure anti-discrimination laws are met, annual EEO minority compliance reports, also known as EEO-1 reports, must be filed.

These only apply to private employers with 100 or more workers and federal employers with at least 50 employees.

The report includes employee demographics, such as:

• Category/role of employee
• Sex/gender
• Race/ethnicity

Aside from being made mandatory by the federal government, Contractors can use EEO reports to understand and analyze workforce demographics, helping to bring diversity to the construction industry.

How to Improve Payroll Reporting

Although not all payroll reports are mandated, it can be helpful to maintain frequent reporting to stay ahead of the game.

Contractors must file union and certified payroll reports either weekly or annually, depending on the requirement to stay compliant. When paired with non-compulsory reports, scheduling can quickly become a headache.

There are, however, some practical solutions to help get the most out of your reporting.

• Trend analysis – Over time, reports stack up and tell a story. Raw data on its own is important, but historical data can help contractors plan and manage more accurately on future payroll reports.
• Schedule management – Create a calendar with regular reminders to ensure reports are being completed and submitted on time.
• Auditing – If mistakes are made, don’t let them slip through the cracks. Conduct regular audits to prevent the same mistakes from being made in the future.
• Stay up to date – Reporting regulations are subject to change, especially when involving the federal government. If even small changes are missed, serious penalties might result, so it is important to stay informed.

These methods improve accuracy and streamline payroll reporting, but contractors have an even better option: construction payroll services.

What Construction Payroll Services Have to Offer

Construction payroll reporting doesn’t have to be a headache. A construction payroll service can make the process easy, helping to ensure that reports are accurate and filed on time.

Let’s take a look at a few ways a payroll service provider can help benefit your payroll reporting.

• Improve accuracy through automation. Human error is reduced in reporting as automation can handle complex calculations, eliminating the need for cumbersome manual entry.
• Save time with enhanced productivity. Using specialized tools for complex reporting for unions, multi-state and certified payroll can really cut down on processing time and help you stay compliant.
• Increase employee satisfaction from transparency. Some payroll services offer online and mobile applications for employee self-service, where workers can access their pay stubs and personal information.
• Integration with related systems. To fully maximize and streamline all administrative processes, payroll can be connected with other systems, like time-tracking, HR and accounting.
• Produce reports with speed. Immediately after payroll is processed, reports can be quickly generated and filed, saving a large chunk of time.

If you decide that a payroll service could help your business, the next step is picking which service provider to go with.

Choosing a Payroll Service

When choosing a payroll service, ask a few questions about what your needs look like.

• What kind of reporting do I perform?
  • If your answer includes certified payroll, union, or job costing reports, look for a payroll service that provides templates for those reports.

• What features are most important to me?
  • Features like automated rates and wage calculations, electronic reporting, project tracking and integration with related systems can all be extremely useful but not always offered by all payroll services.

• What level of customer support do I need?
  • Look for a payroll service that offers training courses for using the system and has a direct line for any customer service needs.

• Is my company expected to grow in the future?
  • If yes, look for a service that can scale to whatever size business you have, meeting requirements for any number of employees.

Not every payroll service offers equal advantages, so it is important to identify your needs and find a provider that is focused on and has experience in the construction industry.

Reporting Made Simple With Payroll4Construction!

Construction payroll reporting can be a daunting task. Contractors must keep track of various report types, knowing that mistakes can lead to costly consequences.

Payroll reports help construction contractors remain transparent with their employees, government agencies, and unions. They may seem like another painful task to complete, but payroll reports hold valuable benefits that contractors should be aware of.

Effective payroll reporting builds a reliable paper trail that supports audits, estimations, and compliance. The more you understand construction reporting, the more you can leverage them to your advantage.

Completing and filing these reports can be tedious and time consuming, especially if done manually, however, construction payroll services offer convenient, accurate and time saving solutions.

With advanced features in automated tracking and report population, there is no comparison; payroll services save you time and money.

If construction payroll reports have been a burden to your workflow, consider Payroll4Construction to help lighten the load.

Reach out to a specialist today!