Certified Payrolls have become an essential part of compensation when it comes to people working under government-funded projects. Today, if there are any discrepancies in your certified payroll reporting, you could potentially face prosecution. Let’s take a look at what certified payroll reports are and how to file them.
What Is Certified Payroll
In the 1930s, President Hoover adopted the Davis-Bacon Act, which protected labourers’ rights working in federally-funded projects. Labourers involved with constructing various infrastructure pieces like roads, hospitals, highways, and public-use buildings were often exploited by their contractors and paid meagre wages.
With the introduction of certified payroll, a prevailing wage was agreed upon, which varied by state. Today, certified payroll reports are mandatory for any government-funded project as it ensures that the people involved in this project are paid fairly according to the prevailing wage requirement.
What Is A Certified Payroll Report?
A certified payroll report is a federal reporting form. This form is also known as WH-347. It contains payroll data such as fringe benefits, working hours, and payments. Form WH-347 needs to be submitted every week by any company which has taken on a government-funded project, and you must submit it to the government agency without fail.
The prevailing average wages paid to most labourers in a specific geographical area are calculated, and the resultant amount is known as the prevailing wage. The certified payroll reports should reflect that you have paid your labourers equal to or more than the prevailing wage.
How to Fill Out a Certified Payroll Report
The following is a detailed step-by-step instruction on how to submit a Certified Payroll Report. Once you have form WH-347, you should fill out the details of the contractor’s company. You can do this by:
- Filling out your company name and choose from the given options to specify whether you are a contractor or a sub-contractor
- Filling out your company address
- Filling out the payroll number
You can determine it by the number of weeks you have worked on the government contract. For example, #1 would be the payroll number for the first week of work, with the numbers increasing for each subsequent payroll submission done weekly.
- Filling out the end date of the working week
- Filling out a description of the government project and its current location
- Your public works project will have a contract number. Fill out that number.
Now that you have successfully filled out your details as an employer let’s take a look at the details that need to be provided. You will have to fill out columns numbered accordingly below. These details will have to be filled out for each employee.
- Fill out the employee’s name and ID number. Their ID number will be the last four digits of their social security number.
- If the employees have claimed any tax allowances, you have to fill out the number of withholding exemptions of that employee.
- Fill out the worker classification of the employee. Specify if the worker is a builder, electrician, etc.
- There will be two rows labelled “O” and “S.” The row labelled “O” stands for overtime, so fill out the overtime hours of the employee. The row “S” stands for standard wages, so fill out the wages of the employee.
- Total hours an employee has worked for you are known as the employee’s working hours.
- Each work type has a different fringe benefit rate and wages that you can check on the US Department of Labour’s website. You must fill out the payment rate drawing on the prevailing wage. It includes fringe benefits.
- The gross amount earned by the employee
- Withheld and deduction amounts. If the employee has a deduction such as withholding tax or FICA, then list those amounts.
- Subtract the total deductions you got in column 8 from the gross amount you got in column 7. This will provide you with a net amount. This net amount is the net wage of the employee. Fill out the net wages in column 9.
Once you fill out all the data, you can proceed to the second page to complete your certified payroll reporting. The second page will contain a statement of compliance that will indicate that all the information and details filled out by you are correct and that you are paying your employees per the Davis-Bacon Act. The statement of compliance must be attested by either your company owner or the head of the payroll. If you want to prevent the inconvenience of filing multiple reports by hand, then you can use one of many available payroll software.