What certified payroll is
Certified payroll is a weekly report, signed by the contractor, that lists every laborer and mechanic who worked on a covered public project that week: their trade, hours, rate of pay, fringe benefits, deductions and net pay. The signature certifies that the information is correct and that everyone was paid at least the rate in the wage determination for the work they actually did.
It exists because of prevailing wage laws. The federal Davis-Bacon Act covers contracts over $2,000 to which the federal government is a party, for construction, alteration or repair, including painting and decorating, of public buildings or public works. The “Related Acts” extend the same labor standards to many projects that are federally funded or assisted, such as highway, housing and water projects. Many states have their own prevailing wage laws for state and local public works too.
Certified payroll is a statement you sign. Falsifying it can lead to civil or criminal prosecution under 18 U.S.C. 1001 and 31 U.S.C. 3729, and to debarment from future federal contracts.
Who has to file
- Every contractor and subcontractor with laborers or mechanics on the site of a covered project. That includes small subs who are on the job for a single week.
- The prime contractor is responsible for the submission of all certified payrolls by its subcontractors on federal jobs, so primes collect them and often set an earlier deadline.
- On state jobs, the state's law decides. In California, every contractor and subcontractor files electronically with the Department of Industrial Relations (DIR). See certified payroll in California.
How often and where it goes
On Davis-Bacon and Related Acts jobs, contractors must submit certified payrolls weekly, for each week in which covered work is performed (29 CFR 5.5(a)(3)(ii)(A)). They go to the federal agency if it is a party to the contract. Otherwise they go to the applicant, sponsor or owner that keeps the records, which in practice usually means through the prime contractor. On direct federal contracts, the Federal Acquisition Regulation expects payrolls within 7 calendar days after the regular payment date of the week covered.
Number each payroll from 1 for each project, and mark the last one as final. Electronic submission is allowed when the agency's system takes a legally valid electronic signature. Some agencies use portals such as LCPtracker; others take a PDF by email.
What goes in it
You can use the Department of Labor's optional form WH-347 or any other format with the same information. For each worker, every week:
- Name and an individual identifying number, such as the last four digits of their Social Security number
- Journeyworker or registered apprentice (with the apprentice's level)
- Labor classification, one line per trade they worked that week
- Straight-time and overtime hours for each day, and the week's total
- Hourly rate paid, fringe benefits paid to plans, and any cash paid in lieu of fringe
- Gross pay on this project and for all work, deductions and net pay
Never put a worker's full Social Security number, home address, phone number or email on the weekly payroll. Keep those in your own payroll records and provide them if the agency asks (29 CFR 5.5(a)(3)(ii)(B)). California is different: its electronic payroll goes to DIR and requires the full SSN or ITIN.
Page 2 of the WH-347 is the Statement of Compliance, signed by an owner or officer. It certifies the pay rates, the classifications, any apprentices' registration and how fringe benefits were paid. See the WH-347 instructions for every field.
If it's late or wrong
- Payments stop. If a contractor fails to submit the required records, the federal agency may, after written notice, suspend any further payment, advance or guarantee of funds (29 CFR 5.5(a)(3)(iv)(B)). It can also be grounds for debarment.
- Underpayments are owed back. If a payroll shows a worker was paid less than the wage determination, the agency can withhold enough from the contract to cover back wages.
- California adds penalties. $100 per worker per day after 10 days of a written request for payroll records (Labor Code 1776(h)), and up to $100 a day, capped at $5,000 per project, for late electronic payroll uploads (Labor Code 1771.4).
Most problems come from a handful of mistakes: the wrong wage determination or modification, a worker in the wrong classification, overtime figured on base plus fringe, or fringe credit that wasn't annualized. The step-by-step guide to a certified payroll report walks through the checks.
Keeping records
Keep basic payroll records, and copies of the certified payrolls, for at least 3 years after all the work on the prime contract is completed (29 CFR 5.5(a)(3)(i) and (ii)(G)). The records must include each worker's full name, SSN, last known address, phone and email, classification, rates, fringe, daily and weekly hours, deductions and pay.
Getting started
- Find the right wage determination in your contract, and look up the rate for each trade on your crew.
- Each week, record hours per worker, per day, per trade. Your payroll system alone usually won't split them by trade.
- Fill the report and check it. The free WH-347 builder does the math and flags pay below the required rate.
- Sign it and send it to the prime or the agency by their deadline.
If you're filing every week on the same job, PrevailCrew's paid plans keep your crew and rates so next week starts from this one.