Government contracts can feel both like a gift and a curse. Government-funded projects often equal steady work that pays well. But there are rules that need to be followed. For example, the government requires that its contractors follow rules and guidelines, including paying – and proving – workers are paid a prevailing wage. And without payroll time tracking software, processing worker paystubs could be a bigger job than it has to be.
Contractors that don’t do government-funded work may miss out on a big chunk of the construction market. Industry outlooks show that in 2022, US nonresidential construction value in place rose 7.4% year over year, driven by manufacturing and commercial sectors with 35% and 21% increases, respectively.
Understanding certified payroll and learning how to process it efficiently and accurately is key to staying compliant as a government contractor.
What is Certified Payroll?
Certified payroll is a payroll report submitted on federally funded projects of more than $2,000 under the Davis Beacon Act (DBA). The DBA was created in 1931 to protect workers from receiving low pay while competing for federally funded construction projects during the Great Depression. The act, as currently amended, requires that any federal contractor who takes on a job over $2,000 on public buildings or public works must pay their workers no less than the prevailing wage and fringe benefits as on similar projects. Prevailing wage is the amount workers must be paid when working on government-funded projects. According to the Department of Labor, a contractor’s prevailing wage obligation may be met by either paying each laborer and mechanic the applicable prevailing wage entirely as cash wages or by a combination of cash wages and employer-provided bona fide fringe benefits.
Submitting certified payroll reports is proof that you’re paying workers a prevailing wage. Using payroll time tracking software can help with that part of the process.
How to Submit Certified Payroll Reports Using Time Tracking Software
Accurately Track Time
Submitting a certified payroll report first requires accurate tracking of the times each employee works. Accurate tracking includes knowing the exact time when each of your employees starts and ends a job that’s funded by government money. Unlike paper time cards, or even an Excel spreadsheet, time tracking software allows employees to clock in and clock out at the touch of button from a mobile device, an essential feature for a mobile and field-based workforce.
Payroll time tracking software literally follows your workers from job to job. So even if your employees work on both government and privately funded jobsite the same week or same day, the information the logged securely and accurately. The data can then be uploaded for use with your payroll software.
Submit the Paperwork
Federal contractors must submit Federal Form WH-347 for certified weekly payrolls on contracts subject to the DBA and make sure each of the form’s fields are filled out correctly, including:
- Name of Contractor
- Name and ID Number of Worker
- Work Classification
- Total Hours
- Rate of Pay
- Deductions
Current Davis Bacon wage rates for each state can be found online by filling in a few fields or providing the wage determination (WD) number.
The certified payroll reports also require that contractors clearly document employee names, addresses, correct job classification, rate of pay, daily and weekly hours worked and amount actually paid in payroll. Once the WH-347 form is completely filled out, submission is certified by signing the statement of compliance included in the form.
Without payroll time tracking software, submitting certified payroll reports could be a huge and even inaccurate job. With it, the process just requires another step, easily accomplished because you already have the correct data.
Don’t shy away from taking on government-funded jobs. Contact ExakTime to see how you can get started automating your time tracking process for better accuracy and faster processing.
