How To Report an Owner/Employee on Certified Payroll
Certified Payroll is complex and so are the reporting requirements for owner/employees. See this question submitted by a reader.
I am unsure of how to report the owner of the company on the certified payroll report. He is a union member but not paid union benefits. He is paid the prevailing union wage in our area. He is paid thru QuickBooks payroll & the appropriate payroll taxes are paid.
The accountant suggests we do not report the fringe benefits on the certified payroll because he does not receive union benefits as he is the owner & does not have union benefits.
I am confused as to how to report his wages. Must I make a ‘separate’ payment to him of what the total prevailing wage for a union worker would receive? Or would I simply ‘add’ the amount of the prevailing wage to his hourly rate? Please advise, thank you! Lynda
You do have quite an interesting situation on your hands!
Federal Prevailing Wage requirements, through the U. S. Department of Labor, indicate that working foreman or supervisors that regularly spend more than 20% of their time performing actual construction work on the project are considered to be covered and, therefore, required to be reported on the certified payroll report. I’m making a HUGE assumption that the owner of your company falls into that “working foreman or supervisor” category when he is out on the job site.
Some states, including Alabama, have a special requirement for the Foreman category. In Alabama, employees who fall under the “Foreman” Work Classification are reported with no hours, pay rates, earnings, or deductions – just their name, last 4-digits of their social security number, number of withholding exemptions and work classification.
Under the Davis-Bacon and related Acts, the contractor is required to pay not less than prevailing wage, including fringe benefits, as predetermined by the Department of Labor. The contractor’s obligation to pay fringe benefits may be met either by payment of the fringe benefits to bona fide benefit plans, funds or programs or by making payments to the covered workers as cash in lieu of fringe benefits.
I totally agree with your accountant that you do not report any fringe benefit amounts on the certified payroll report for the owner, because he isn’t receiving them – during an audit that would cause quite a problem.
My recommendation based on the information that you have provided – would be that the owner of the company be paid the TOTAL of the Union wage PLUS the full fringe benefit amount – for example if the hourly union wage was $20.00 and the total fringe benefit rate equaled $10.00 his QuickBooks rate of pay would be $30.00 for Straight time and $40.00 for Overtime. Overtime would be calculated as $20.00 (base) + $10.00 (1/2 base) + $10.00 (Fringe). On most state specific forms you would report $30.00 in the Rate of Pay box, however, on the Federal WH-347 you would report the rate of pay in Column 6 as $20.00/$10.00 for Straight/Regular time and $30.00/$10.00 for Overtime.
This is indeed a complicated situation and I suggest that you discuss my recommendation with the Union Hall, the General Contractor or Project Administrator, AND your local Department of Labor’s Prevailing Wage Division to ensure that what I have suggested will meet with their reporting requirements.
I hope this helps.
Leave a Reply
- The Great Debate – QuickBooks Desktop vs. QuickBooks Online
- Using Account Numbers in Your QuickBooks Chart of Accounts
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- QuickBooks Tip - Job Costing Starts With A Simple Item
- How To Turn On and Use Manual Payroll in QuickBooks
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- Welcome to the QuickBooks for contractors blog
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- QuickBooks Tip: Important Facts About Items Left as Billable
- QuickBooks Tip - Child Support Garnishments
- QuickBooks Tip - Determing Cost of Goods Sold
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks 2015- The Good, Bad and Ugly, Part 1
- QuickBooks for Contractors Tip – Advanced Progress Invoicing