Posts tagged certified payroll
Construction Specific Payroll Reporting

office workerFor many types of businesses, outsourcing payroll is considered a “no brainer”. The benefits from eliminating the recurring, time consuming activities related to payroll processing are typically well worth the cost, to say nothing of the burden of tax reporting responsibilities. Payroll for construction companies on the other hand is very different from other typical business payroll. Processing construction payroll typically includes such challenges as:

  • Employees working in different locations and/or tax jurisdictions
  • Shifting pay rates depending on the type of work and/or number of hours worked
  • Special external reporting for unions, workers’ compensation, certified payroll, etc.
  • Internal reporting requirements such as job costing

Even collecting time cards is more difficult for a contractor than other typical businesses.

Construction-Specific Reporting

If you are a contractor, it may still make sense for you to outsource your payroll processing, as long as you can find the right service partner. Many traditional payroll service companies do not provide many of the reports that construction companies need to run their business and comply with various reporting requirements. When evaluating a service or solution, make sure they can provide the following reports:

Job cost reporting –If your payroll solution cannot break payroll data down by job, you will spend a lot of time manually entering labor hours into spreadsheets in order to calculate each job’s labor component. Look for a solution that will track labor hours, dollars and burden (FICA, FUTA, SUTA, workers' compensation, etc.) by job. A comprehensive service or software package will offer more sophisticated reports, such as tracking by cost code, estimate vs. actual, percent complete, production, unit pricing, projected costs to complete and more.

Compliance Reporting – Including new hire, EEO minority compliance, and workers' compensation reporting.   Trying to manually track employees who routinely change jobs and workers' compensation classifications, for example, can be a time-consuming job. Make sure to select a payroll solution track changes automatically and create accurate reports.

Union reporting -Unions require detailed reporting for their members. If you work with multiple unions, your reporting requirements can quickly become overwhelming. A good construction-specific payroll service or software solution should be able to handle all of these complex requirements.

Certified payroll reports – If you work on federally-funded prevailing wage jobs (and similar state jobs), you will need to be able to create certified payroll reports. Certified payroll reports can be complex and time consuming to prepare without the help of an automated system. A construction-specific payroll service should be able to produce these reports in accordance with the rules of the U.S. Department of Labor's form WH-347, as well as specialized forms for individual states and municipalities.

You may not need all of these reports and there may be other types of reports that are essential to your business. Use this list as a starting point and modify it to meet your needs before you begin searching for a solution.

Avoiding Common Certified Payroll Mistakes

Filling out your weekly certified construction payroll reports can become a difficult task, particularly if you fill them out by hand. Various mistakes, including transposition errors, are inevitable, regardless of any precautions you take. In addition, these repeated slipups will damage your company’s reputation with the project administrator or general contractor. Compiling a Prevailing Wage Report, which varies by state, can also be complicated. With this in mind, learn how to avoid these mistakes and submit reports that are done correctly to benefit both you and your business:

  • Your reports could be rejected as being incomplete or inadequate. You will be told to make the necessary corrections and resubmit the forms by a certain date, or payment will be delayed, which will negatively affect your cash flow. Generally speaking, the final contract for every project will provide you with a copy of the correct payroll reporting form and indicate whether you should file your reports electronically.
  • If you fail to pay your workers the prevailing wage and don’t submit your payroll reports, you will have to make wage restitution and submit every certified report within 30 days, once the general contractor is notified. As a rule, this requirement is discussed in the final project contract.
  • If you fail to pay your workers the rate of pay indicated in the “wage decision,” which is also found in the final contract, you will have to make wage restitution and submit amended reports within 30 days as well. When clarification is needed, the contract administrator usually provides a Wage Bulletin or a Project Wage Rate sheet in order to prevent such errors.
  • If your employees’ Work Classifications fail to match those found in the Wage Decision portion of the contract, that problem must be corrected. You may also have to make wage restitution in this case and submit an amended payroll report within 30 days as well.
  • If your reports contain inaccurate figures, fail to show how your employees’ fringe benefits are paid, or have “Other Withholdings" you will also have to submit amended reports within 30 days.

Remember to check the calculations on your final reports prior to submitting them. This should never be brushed aside, even if you are using a construction software or accounting software program to produce your reports for submission.

If you manually create these reports, or need to manipulate large quantities of data to complete them, consider automating the process to save valuable time that could be used for other purposes and eliminate any transposition errors as well.

Note that today, a number of QuickBooks users have the capability of generating a built-in certified payroll report. Every week, however, they either manually correct errors, or enter the data into the certified payroll report after printing it out. If you are doing manual work to correct your "automated" solution, give us a call and we can show you how to eliminate this extra work.