US employment law could be very complicated. Although the Fair Labor Standards Act (FLSA) contains guidance, it is still easy to make mistakes and violate the law. If you work on federally funded projects, you must know how to create and submit certified payroll reports to the US Department of Labor.
What Is Certified Payroll?
Certified payroll is a federal reporting form. It is also called WH-347 and contains a detailed description of the wages paid to each employee, their payments, working hours, and benefits withheld.
It also covers a list of the types of work the employees did. Certified payroll proves that an employer pays its employees the predetermined prevailing wage according to law. These wages represent fixed average payments to employees who work in alteration, repair, or construction.
How To Fill Out A Certified Payroll Form?
Here is a three-step guide on how to fill out a certified payroll report:
1. Step One
First, you need to fill out the top of the form. It contains details about a contractor's company such as:
- Firm's Name: Enter your company's name and tick a box to indicate whether you are a contractor or a subcontractor.
- Firm's Address: Enter your company's address.
- Payroll Number: The number of weeks you worked on the government contract.
- Week Ending: Enter your working week's end date.
- Project and Location: Describe the current project and its current location.
- Project or Contract Number: The number in your contract for the public works project.
2. Step Two
Second, there are columns with numbers. You must fill out the following columns numbered accordingly with detailed information about each employee:
- Enter each employee's name and the last four digits of their social security number.
- Enter the number of withholding exemptions of each employee.
- Work classification. For example, an electrician, a builder, or other.
- The number of worked hours and overtime - The "O" row stands for overtime, and the "S" row stands for standard hours.
- Fill out total working hours for every employee.
- The payment rate is based on prevailing wage, including fringe benefits.
- Gross amount earned. If you fill out the form online or use apps, it will automatically calculate the gross amount for you.
- Deductions and amounts withheld. Subtract any necessary employee's deductions like FICA, withholding tax, and others.
- Net wages paid. To get net wages, you should subtract the total deductions from the gross amount you earned in column 7.
3. Step Three
When you have added all the data, move on to the second page to complete your certified payroll reporting. The contractor will confirm the data in the report on this page. It includes a statement of compliance that shows that:
- All the columns and rows in the payroll report are correct and fully disclosed.
- Each employee is paid more than or equal to Davis-Bacon's prevailing wage.
Certified Payroll Requirements Updates: 2020-2021
There have been no significant updates to payroll in 2020. The latest changes were made in 2018 and 2019. The US Congress considered improving the state of the country's transportation infrastructure in 2018. They introduced S.2302, America's Transportation Infrastructure Act, in 2019. The act aims at:
- Funding highways
- Enhancing bridge and road safety
The US House of Representatives passed this act, but it faced difficulties with Senate Republicans and the White House. If this bill passes, it will bring $287 billion of investments into repairing and maintaining US highways, bridges, and roads. It will have a positive effect on construction companies that apply for government-funded construction projects.
It is essential for people working in repair and construction to know how to submit a certified payroll report. The US Department of Labor requires this type of documents to ensure that contractors pay fairly to the employees involved in government-funded public works projects.