Generating weekly certified payroll reports when you issue bi-weekly paychecks to your employees can be difficult unless your accounting software will accurately accrue the wages for each week – QuickBooks doesn’t have this ability and quite often this causes problems.
Payroll is one of the largest expenses that a company will have. Most companies, when they start up, will find out what the minimum requirements for paycheck frequencies are for the state that their business resides in – earlier this week we discussed paycheck/payroll frequencies by state – and they will follow those rules. This will work fine unless you are a contractor who makes the move to Public Works/Government Construction projects and become subject to prevailing wage laws. This is when problems can occur.
Under the Federal Davis-Bacon and related Acts; contractors and subcontractors performing work on Federal or Federally-aided construction-type contracts are required to submit weekly payrolls. The Copeland Act provides further/clearer requirements; indicating that contractors and subcontractors performing work on Federally financed or assisted construction contracts “furnish weekly a statement with respect to the wages paid to each employee during the preceding week”.
Obviously, contractors and subcontractors who issue their payroll on a weekly basis find the necessary information easier to obtain; therefore, making compliance of certified payroll reporting easier on the people who actually have to complete the reports.
What happens when your company is subject to the rules found in the Davis-Bacon and the Copeland Act and you issue your payroll on a bi-weekly basis?
I’m not here to tell you that you HAVE to start issuing your paychecks on a weekly basis – I’m only here to tell you what the requirements are and about what COULD happen – based on my experience; so that you can make an informed decision.
If you are lucky enough to have an accounting program that accurately accrues and distributes payroll taxes and wages based on when it is earned rather than when it is paid – you shouldn’t run into any issues when you create the certified payroll reports. BUT, if you use QuickBooks you need to be aware that it does not have this ability and your payroll is recognized only when you actually issue the paycheck and this is where the problem with your certified payroll reports COULD begin.
Each certified payroll report has a weekly calendar section {shown below} where by day and date you enter the number of hours that each employee worked on the prevailing wage job site and the total hours that he/she spend there during the entire week.
Right click on the image to enlarge it
When you issue payroll in QuickBooks on a bi-weekly basis – you will enter the time worked for each of the two separate workweeks in two individual timesheets, for example, let’s say that your pay period ends on a Saturday:
- Your first work week covers Sunday, December 21, 2003 through Saturday, December 27, 2003
- Your second work week covers Sunday December 28, 2003 through Saturday, January 3, 2004
- Your paychecks will be dated on January 7, 2004
Below are the two timesheet entries from QuickBooks:
- Workweek 1 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job
Timesheet Work Week 1 - Right click to enlarge
- Workweek 2 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job.
Timesheet Work Week 2 - Right click to enlarge
Next, we’ll look at the QuickBooks paycheck detail, you’ll see that the total number of hours are accurate for the full two weeks.
- A total of 48 hour at $28.50 per hour for $1,368.00 in wages for the prevailing wage job
- A total of 32 hours at $28.50 per hour for $916.00 in wages for the non-prevailing wage job
- Total gross for the 2 week period of $2,280.00
- Net wages for the week $1,528.33
Bi-weekly paycheck - right click to enlarge
When you create or run your certified payroll reports {whether is is with our Certified Payroll Solution software or using the built-in QuickBooks certified payroll report} you’ll need to generate two individual reports; one for each week. This is what the reports will look like:
- Week 1 – the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Certified Payroll Report Week 1 - Right click to enlarge
- Week 2 – again, the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Certified Payroll Report Week 2 - Right click to enlarge
Is this wrong? Well, sort of; the laws do indicate that payroll should be reported {therefore, issued} for the preceding week.
What can you do if you issue payroll on a bi-weekly basis?
Many of our own customers issue payroll on a bi-weekly basis, and on the Statement of Compliance {in the Remarks section} they add a note that indicates that they issue paychecks on a bi-weekly basis and while the certified payroll report accurately reflects the correct number of hours worked on the job for the specified week; gross amounts earned This Job/All Jobs, deductions {including taxes and other withholdings} and Net Pay reflect the full amounts from the single bi-weekly paycheck.
Will this statement keep you out of trouble?
Not necessarily, it all depends on the Contract Administrator and Awarding Agency.
The best thing to do, in my opinion, is to just bite the bullet and issue your payroll on a weekly basis; at least for the employees who work on the prevailing wage projects. This may mean some additional planing and scheduling on your part, but it’s easier than having your certified payroll reports rejected and having to manually calculate the gross, taxes, deductions and net pay and resubmit the reports!
Look for similar articles next week on how a semi-monthly or monthly payroll run will affect your certified payroll reports.
I hope that you’ve found this article to be informative and helpful in making informed decisions for your business; if so please take a moment to leave a comment or to share this with others on your favorite social networking platform using the buttons below.
Many business owners feel that they can pay their employes “whenever” they want and that is true to a point. Business owners can pay their employees whenever they want as long as the “whenever” meets the laws of the state their business resides in.
As a business owner you probably feel “in control” when it comes to setting a payroll schedule for the people you hire. Certainly you have options, you can issue payroll on a:
- weekly
- bi-weekly {every other week}
- semi-monthly {twice a month, perhaps on the 1st and the 15th}
- or a monthly basis
While there is no federal laws that require how often you pay your employees, the payroll schedule you choose MUST conform to the requirements of the state that your business is located in.
Most states require that every employer has to pay all of the wages due to an employee on a regular payroll schedule, which is determined by you the business owner – BUT you must notify the employees of how frequently you intend to pay them. A “regular schedule” means that you must consistently pay your employees using whatever frequency you choose, in other words you can’t just randomly issue a payroll check.
Many states also tell a business owner how much of a “holdback” they can take. Meaning that if you decide your workweek starts on a Sunday and ends on a Saturday and that you will pay your employees on the Friday AFTER the end of the work week; you are holding back a week’s worth of pay.
A word of caution – a business can get into trouble if it doesn’t pay it’s employees as often as the law requires – and I’m sure you don’t want or need that additional headache! Believe it or not, but each state has their own set of rules and regulations {imagine that!}, in some states the rules are different depending upon the employees occupation. In other words, setting a payroll schedule that is realistic for your company AND that conforms to state requirements can be a mess!
The U.S. Department of Labor provides a fairly detailed overview of employee payroll schedules by state, you can find State Payday Requirements here, the information provided is ONLY an overview of general information – you should most definitely contact your state department of labor for all of the details!
We hope you’ve found this article to be helpful, if so please take a moment to leave a comment or share it with others on your favorite social network.
A reader asked the following question regarding paying employees using different frequencies:
We are new to QuickBooks payroll and would like to set up different pay frequencies for our employees, as follows:
- Company officers – monthly salary
- Clerical staff – hourly basis, bi-weekly
- Field Workers – hourly basis, weekly
How do we accomplish this when using QuickBooks?
_______________________________________________________
Answer:
Yes, you can accomplish this when using QuickBooks Basic, Enhanced, or Assisted Payroll.
QuickBooks allows you to create a “Pay Frequency” and a “Payroll Schedule” to meet your various payroll needs.
Begin by going to the QuickBooks Employee Center and clicking on the Employees tab.
Pick an employee and choose the Edit Employee button, switch to the Payroll & Compensation Info tab. In the upper right corn you will see a Payroll Schedule option, this is where you will create a new Payroll Schedule and corresponding Pay Frequency.
From the Payroll Schedule dropdown menu choose Add New, below is the setup for a bi-weekly payroll schedule:
There are two very critical dates that you must enter when you create a new Payroll Schedule, they are:
- What is the pay period end date? This date should be the date the the first bi-weekly payroll will end on.
- What date should appear on paychecks for this pay period? This date should be the date that the first bi-weekly paycheck will be run.
The screenshot above indicates the following information:
The bi-weekly pay period will end on Saturday July 10, 2010 and we will process payroll checks (date of checks) on Wednesday July 17, 2010.
Once you have created your Payroll Frequency/Schedule you will then edit each employee’s record, going to the Payroll & Compensation Info tab as select the appropriate frequency (Weekly, Bi-Weekly, or Monthly).
When you are ready to actually pay your employees, go to the Employee Center and click on the Payroll tab, each of your Payroll Frequencies will be displayed, click on the appropriate frequency (Weekly, Bi-Weekly, or Monthly) and click the Start Scheduled Payroll button.
We hope you have found this QuickBooks Payroll Tip to be helpful, if so, please feel free to leave us a comment below.
