In recent posts, we have covered the importance of complying with federal laws like the Davis-Bacon Act through a process called Certified Payroll.
Need a quick refresher? Certified Payroll means that you submit a weekly version of from WH-347 to the Department of Labor. All construction-related employers who hire workers to complete federal contracts must go through this process, and the penalties for non-compliance are significant, coming in the form of fines, being barred from federal contracts, and serving even prison time. The main goal of this is to comply with the Davis-Bacon Act, which protects employees from unethical employers by requiring workers on federal construction contracts worth over $2000 to be paid the prevailing wage in the area.
Many of the companies we work with want to know just how labor-intensive it is to accomplish the requirements for Certified Payroll, especially as it is a form that must be submitted weekly. Of course, there is no one answer to this that applies to every company. Let’s take a look at the factors that can make Certified Payroll take more or less time!
How time-intensive will Certified Payroll be for your company?
The short answer is this: companies that employ large numbers of workers or who do a lot of work on federally funded contracts will spend a lot of time doing Certified Payroll. This is just a reality of the work that has to be done. Each weekly form must include individualized information for every employee, including:
- The name of each contracted employee
- The wages and benefits of each employee
- The type of work being done
- The number of hours worked during that week
- Withholdings and gross wages
- A statement of compliance
Clearly, a company with large numbers of employees working on federal contracts is going to be time consuming. The one benefit of a large company in this respect is that these large employers can hire a Certified Payroll specialist who can make adherence to federal policies a significant part of their daily work.
This means that companies with fewer workers and fewer construction contracts may be at a disadvantage when it comes to time. Even with less Certified Payroll work to do, there may be an additional burden because the task often has to be completed by someone with lots of other tasks to do. Companies that only occasionally take on a federal contract may also be slowed down by the learning curve associated with completing their WH-347 forms.
Is it possible to estimate how much time it will take to complete WH-347?
Right on the form, in very tiny print, the Department of Labor writes, “We estimate that is will take an average of 55 minutes to complete this collection, including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. If you have any comments regarding these estimates or any other aspect of this collection, including suggestions for reducing this burden, send them to the Administrator, Wage and Hour Division, U.S. Department of Labor, Room S3502, 200 Constitution Avenue, N.W. Washington, D.C. 2021.”
This language shows that the DOL recognizes that the completing of WH-347 is time consuming. Their calculation is about an hour for 8 employees, per week. A larger company with 200 employees, then, can expect to spend nearly 24 hours doing Certified Payroll per week.
What are some strategies for reducing the time it takes to complete Certified Payroll?
We have good news! There are some ways to reduce the amount of time you have to spend doing Certified Payroll! Here are three strategies that we recommend:
- Get trained! The person in your company who is in charge of Certified Payroll can go to seminars or training courses to become more and more comfortable with the process. This kind of training is offered by a number of professional associations and organizations. These do cost money, and it is important to keep in mind that this training is not required in order for a person to complete Certified Payroll. It is simply one strategy to reduce the Certified Payroll workload.
- Invest in great payroll software. Not all payroll software is created equally, and the stuff that you see out there for cheap or free is probably going to create a “you get what you pay for” situation. That said, good payroll software for construction companies will include Certified Payroll processes as well as Statements of Compliance.
- Outsource this part of your payroll work! Outsourcing payroll can be a great strategy, especially for small businesses. Although there are costs associated with outsourcing, the fact is that there are costs associated with NOT outsourcing as well. Those costs include hours spent on tasks that could be completed more efficiently by a professional and penalties and fines from errors.
Need help? Let us know!
If you are ready to discuss outsourcing your Certified Payroll responsibilities, let us know! Complete Payroll helps small businesses around the country with all of their payroll and human resources needs. When it comes to Certified Payroll, we can answer your questions, review your current strategies and processes, and help you develop a comprehensive plan to ensure that you are meeting all of the requirements for this complicated federal law!