To be classified as exempt, the employee’s job generally must satisfy both a salary basis test and a duties basis test. Exempt employees generally must be paid on a salary basis, meaning they must be paid a fixed salary each week. The U.S. Department of Labor (DOL) enforces regulations that define the salary basis requirement to satisfy the exempt status tests. Exempt, Administrative, Executive, and Professional employees must be paid a predetermined amount each pay period that is at least the minimum weekly salary required by the regulations. The current federal minimum is $455 per week (expected to be ~$679 starting in January 2020). However, some states require a significantly higher minimum weekly salary to satisfy this test (New York is among them). The amount paid may not be reduced because of a variation in the quality or quantity of the work performed. 

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.

“Certified Payroll” almost sounds like a special option that any company can choose in order to make their payroll super official and by-the-book. We wouldn’t blame someone for misunderstanding the concept the first time they heard of it. After all, we all know about certified letters, certified checks, and certified organic foods. In each of these categories of certification, an outside organization or entity verifies your work, and you reap the benefits.

Not every Human Resources department deals with contracts that fall under the purview of the Davis-Bacon and Related Acts, but how do you know if your HR department is one that does? Do you know if you are required to file a statement of compliance and if so, how to do that? Are you confident that you are correctly filling out your WH-347 forms on a weekly basis?

If you are bidding on a contract or you already do work for a government entity, there are certain requirements in order to stay compliant with the Davis-Bacon Act. One of these requirements is the concept of “prevailing wage.” State laws may differ from Federal laws so it is important to understand these differences.

The U.S. Department of Labor Enforcement Data shows that since 1985, the Wage and Hour Division has reported over 119,000 violations of the Davis-Bacon Act. By failing to pay laborers the prevailing wage, these violators paid over $197 million in back wages for their government-funded projects. 

If you ever do work for a federally funded project, you need to be familiar with certified payroll and the Davis Bacon Act, as failure to meet reporting requirements can lead to hefty penalties. We’ve put together four things to remember when working on construction, repairs, and renovation of public buildings and other public holdings.

If you are bidding on a government contract, you need to be aware of the ways that payroll differs from civilian projects. Government contracts are subject to different regulations and require “certified” payroll reports in order to stay compliant with the Davis-Bacon Act.

Construction projects, in general, have timelines, project management, HR support, and so many other components to ensure that contractors are paid on a timely basis and projects are completed efficiently.

If you hire contractors for federally-funded projects, you’ll want to become very familiar with Certified Payroll.