You Have Construction Union Workers, Now What?

Many contractors rely on construction union workers to help them complete projects due to their extensive background in their trades.

Oftentimes, union workers have a few years of experience in apprenticeship programs and receive continuous training to improve their productivity and safety on jobsites.

However, employing union workers comes with its own set of unique challenges, particularly when it comes to collective bargaining agreements (CBAs) and construction payroll requirements.

We’ll discuss some of the responsibilities that are associated with hiring union workers and steps contractors can take to simplify them.

Key Takeaways About Construction Union Workers

• Contractors who rely on union workers have access to a more skilled workforce, but they face additional compliance items like CBAs and union tracking and reporting.
• Contractors can leverage construction payroll services to precisely calculate wages, benefits and compile certified payroll reports to simplify union reporting and tracking.
• Investing in construction payroll services that integrate with time tracking software gives employers the ability to import working hours directly into their payroll service, saving time and reducing errors.
• By leveraging construction payroll services — like Payroll4Construction — contractors can simplify their payroll processes and reclaim time that was spent on manual calculations and checking for errors.

What Contractors Should Know About Union Workers

It’s crucial to understand the regulations involved when hiring union workers because they offer specialized skills for a variety of lucrative job opportunities.

The first step is understanding the relationship between unions and employers. The union acts as the representative for its members, negotiating on their behalf with employers to form a CBA. The CBA typically includes things like:

• Union wages
• Benefits
• Working hours
• Working conditions

Contractors must follow the CBA or face penalties and legal disputes. While CBAs may seem straightforward, contractors who employ workers from multiple unions may face different CBAs simultaneously, which could complicate union reporting and tracking.

Union Labor Tracking and Compliance Reporting Requirements

The CBA will dictate what exactly needs to be reported. Contractors must ensure that they are accurately tracking:

• Working hours
• Wage rates
• Fringe benefits
• and other union-specific obligations, like due payments

Union Wage Calculations and Net Pay Requirements

Contractors are responsible for calculating hourly wages, gross wages and net pay for each union worker. The hourly wages are based on the trade, location and CBA. Gross wages are the total amount of money, including overtime, that an employee earns before deductions.

If employers make a mistake when calculating pay, or if changes are made to the CBA, contractors may be required to make off-cycle payments to union workers. Contractors should have a plan in place to accurately track wages and deductions and account for off-cycle payments.

Tracking Union Benefit Fringes and Dues Deductions

Deductions are taken out of an employee’s paycheck and include things like an employee pension fund and union dues.

Union dues normally account for about 1-2% of a worker’s paycheck and are outlined in the CBA. Employers must calculate union dues for each employee during the pay period, per the CBA.

Whereas fringes are additional forms of payment or benefits from contractors to union construction workers. A few examples include health insurance, retirement plans and PTO.

Employers are required to track and report fringes and deductions for each pay period, which can prove difficult when managing larger teams across multiple states and unions.

Union Rates Vs. Prevailing Wage

Union wages are outlined in the CBA for each role. As mentioned above, contractors have to track and report that they’re paying their union workers the correct rates for their role.

However, on federal projects, contractors must follow comes Davis-Bacon requirements like certified payroll reporting, which provides proof they’re paying their workers the proper prevailing wages.

Prevailing wages are oftentimes established by taking average wages, including union wages, within an area to establish fair wages for union and non-union workers.

On government projects, even contractors who employ union workers are required to submit certified payroll reports during each pay period for each employee.

How Construction Payroll Services Help Contractors

Managing union worker payroll manually with spreadsheets can be a daunting task due to various reporting requirements and CBA complexity. Construction payroll services are designed to handle union tracking and reporting requirements.

Payroll services can save contractors time and reduce errors by automating complex calculations like fringes, deductions and certified payroll reporting.

As well, payroll services automatically account for specific union rates, dues, fringes and deductions during each pay period.

Contractors can use these calculations to ensure wages and benefits are calculated correctly, and reports are filed on time.

Some payroll service providers take accuracy and efficiency a step further by offering systems that integrate with time-tracking software.

Employers can transfer time tracking data to their payroll service in a few clicks, ensuring that all hours worked, including overtime, are accurately accounted for during each pay period.

Construction payroll services can precisely calculate union payroll for contractors of any size, streamlining the process.

Ultimately, payroll services allow contractors to focus more on the jobsite rather than administrative tasks.

Simplify Union Payroll Regulations With Payroll4Construction

Managing union payroll in the construction industry can be time consuming and complex, but construction payroll services — like Payroll4Construction — are uniquely equipped to handle them.

Contractors and construction companies who invest in construction payroll services can spend more time focusing on delivering results and less time on payroll compliance items.

For example, contractors who rely on Payroll4Construction receive:

• Help setting up union rates to ensure accurate payroll
• Automated calculations for union tracking and reporting
• Streamlined certified payroll reporting
• Multi-state, multi-rate and multi-union payroll calculations on a single timecard

For more information about Payroll4Construction, speak with a specialist today.