With the bulk of the construction projects being funded with ARRA (American Recovery & Reinvestment Act OR Recovery Act) money; more and more contractors are making the leap from residential or commercial construction projects to government funded construction projects.
While there is a lot of really good information out there on HOW to do business with the government and getting yourself into the government construction arena – the one thing that seems to be missing in preparing contractors for this type of work – is the simple fact that these jobs require the submission of a Weekly Certified Payroll Report.
Almost anyone will tell you that completing a certified payroll report on a weekly basis is a time-consuming, error-prone, and frustrating task!
The U.S. Department of Labor’s Form WH-347 and WH-348 is one of the simplest forms to complete, however, they estimate that it will take 1 hour to complete a form containing information about eight employees for a single job.
You need to realize that a weekly certified payroll report is only one of the many possible reports that, you as a contractor working on Federal, State, or ARRA funded construction projects, will have to submit — other required forms, such as Fringe Benefit Reports, EEOC/Work Utilization Reports, and ARRA Reports; are an important piece of your overall cash flow management.
When you screw up your certified payroll reports, bad things happen; none of which put you in good standing with the Project Owner/General Contractor, Department of Labor, etc. and can damage the overall cash position of your company.
Download this article, which will help you to complete a certified payroll report
OR
Sign up for our monthly 2-hour live webinar ($69.00 per person) to learn more.
Effective January 18, 2009 Prime/General contractors and subcontractors who perform work on federally funded construction projects are no longer required to display the home address and social security numbers of employees on the certified payroll report form WH-347 that they submit; instead you are now required to display the employees full name and the last 4-digits of his/her social security number as follows XXX-XX-1234. This revision was established to better protect worker privacy and identity theft.
Given the new reporting requirements it would not be in violation of 29 CFR 5.5 (a)(3)(i) for a prime/general contractor to require a subcontractor to proved employee addresses and social security numbers for the prime/general contractors own records, without including this information in weekly submissions.
The U.S. Department of Labor – Wage and Hour Division in conjunction with the Office of Management and Budget (OMB) released a new Federal WH-347 to be used effective January 18, 2009 through December 31, 2011.
All projects funded by President Obama’s Economic Stimulus Package (the American Recovery & Reinvestment Act) will require the payment of prevailing wages and the submission of certified payroll reports; even weatherization projects which are federally funded which have historically been exempt from prevailing wage laws and certified payroll reports.
The Davis-Bacon Act of 1931 established into law the requirement for paying “prevailing wages”; a specific rate of pay plus fringe benefits for each trade/work classification that has been set by the Department of Labor – Wage and Hour Division, on federal or federally-assisted construction projects exceeding a value of $2,000.00. Construction includes the alteration and/or repair, including painting, decorating, plumbing, electrical, etc., of public buildings or public works – including roads and bridges.
The Copeland Act (Anti-Kickback Act) makes it a crime for any employer to require any employee working on a Federal or Federally-Assisted project to “kickback” any part of his or her wages. It also requires every prime/general and subcontractor to submit weekly certified payroll reports beginning with the first week that a contractor performs work on a project and for every week thereafter, until the work is completed. When there is a temporary break in work, a “No Work Performed” payroll must be submitted.
The weekly WH-347 certified payroll form is a 2 part form, is not a complex form and does not ask for any information that you as a business owner do not already need to keep for wage payment, tax purposes, and information about the project. You’ll need to know:
- Information about your business (your company name and address and are you the prime/general contractor or a subcontractor)
- The project name, its location, and any identifying project numbers (the project location).
- Each employee’s name and the last 4-digits of their social security number (who is working for you).
- Each employee’s Trade or Work Classification (what they do).
- The number of hours worked each day during the week on individual projects by each employee (where they worked during the week and how many hours they worked).
- The employees prevailing rate of pay for the trade/work classification (how much you pay them for the work they perform).
- Gross amount earned for each employee (how much did you pay each employee that week for each job and for all jobs they worked on).
- How much and what was deducted for taxes, etc. from their paycheck.
- The net amount paid to each employee (how much was their paycheck that they actually took home).
Then a company official must sign the second page, or Statement of Compliance. This signature is the “certification” because the person signing the report is guaranteeing that the information being reported is accurate and correct.
The most common certified payroll report form used is the U.S. Department of Labor Form WH-347 and Form WH-348 Statement of Compliance, which is used and followed by 25 of the 50 states. Of the other 25 States, 14 will have a single state agency that will monitor State Prevailing Wage Laws and 11 states have multiple State Agencies that will monitor Agency Specific Prevailing Wage Laws and require electronic filing of certified payroll reports.
The problem that most contractors’ experience, especially contractors using popular accounting software such as QuickBooks, is that while QuickBooks has the ability to track most of the information required; it does not have the ability to track all of the required information and generate the forms in their specific format. This is often the barrier that keeps some contractors from bidding on these types of projects.
Some QuickBooks users and accounting professionals feel that Intuit should include the ability to produce certified payroll reports and statements of compliance in the Premier Contractor Edition, and are very upset that this ability is not already built in. This would be a good idea and a legitimate request IF there was only a single certified payroll format that was used in all states and administered by a single prevailing wage agency, regardless of if the project was funded with federal or state dollars, and if every contractor who purchased the Premier Contractor Edition was required to submit these forms. However, this is not the case and is probably the reason that Intuit does not include this type of functionality.
QuickBooks users, and the accounting professionals who support clients using QuickBooks, should, however, be aware that there are QuickBooks integrated applications available that will utilize existing QuickBooks data to generate not only the certified payroll report and statement of compliance; but other reports as well, all of which are ready for “signature” and submission.
There are four QuickBooks integrated applications that produce certified payroll reports, statement of compliance, “No Work” performed payrolls, EEOC/Workforce/Manning Reports and Union/bona-fide plan fringe benefit reports, two of these add-on programs can be found by visiting the Intuit Marketplace at http://marketplace.intuit.com/v2/i-construction-contractors/f-payroll/software-solutions.aspx
Each of these programs utilizes QuickBooks data differently; some require you enter the same data in both programs, and that’s no good; while others will have you enter just the information that QuickBooks on its own cannot track while reading the rest of the information directly from you QuickBooks company file so that copying or entering the same data multiple times is not required. Each program will have a different pricing structure (remember cheaper isn’t always better) and will offer different capabilities, such as meeting electronic filing requirements, the ability to generate custom Union/bona-fide plan fringe benefit reports, and the ability to generate Federal, State, and Local EEOC/workforce/Manning Reports.
Make sure that you investigate each program thoroughly, take advantage of free trials (if available), and make sure that you understand how you obtain updates when form revisions or reporting mandates change, is there a fee involved, do you need to purchase additional licenses for each user, are their annual fees involved to keep your software up-to-date, can the system handle multiple trade/work classification for each employee, can the system handle multiple pay rates (straight time, overtime, double time, triple time) for each work classification, can the program generate state forms and automate electronic filing in addition to the federal form? Make sure before you buy.
Accounting for payroll is often complex and is always critical to the success of your business. The additional requirement of producing certified payroll reports makes accurate record-keeping essential. If you use QuickBooks, purchasing a QuickBooks integrated application will save you time, improve accuracy, eliminate duplicate data entry, eliminates transposition errors, and quite possibly save you from having to hire someone whose only job is to produce these reports manually. All of these things affect your cash flow and the overall success of your company.
Download a .PDF version of this article for future reference, by clicking here.
Feel free to request our Free Self-Paced Certified Payroll Training Guide, which has been recently updated, at http://www.sunburstsoftwaresolutions.com/component/option,com_performs/formid,5/
With all of the enhancements (new features, forms, functionality) that we’ve made to Certified Payroll Solution in the last 1/2 years – not to mention the release of the new Federal WH-347 Certified payroll report and reporting requirements…..I decided it was time to get off my duff and update some of our training videos.
After nearly 4 days of screen capture, audio recording, and editing I’m happy to announce that two of the video’s (totally a little over 1 hour of viewing time) are now available in the Certified Payroll Solution Training, Support & Resource Center – in the Free Training Category.
The video’s that have been updated are the “Certified Payroll Solution Initial Setup Video” and the “Running Certified Payroll Solution Video“.
Updated videos are available in their original Windows Media Player format – because everybody has Windows Media Player installed on their computer.
New Video Format Available:
Table of Contents
We’ve also added a new format for these videos – Flash based with a Table of Contents on the left, so you can easily replay certain sections of the video. The Table of Contents from the Initial Setup Video is shown to the left.
So what do these video’s cover? I’m glad you asked!
The Certified Payroll Solution Initial Setup Video covers entering your Certified Payroll Solution License, granting permission in QuickBooks for CPS to access and read information from your QuickBooks Company file, setting up certified payroll reporting preferences, that are specific to your company, that QuickBooks has no means of handling as well as setting up “default” employee and job information.
The Running Certified Payroll Solution Video covers running your first set of certified payroll reports (start to finish), offers a review of granting permission in QuickBooks for CPS to access and read information from your QuickBooks company file, walks you through the one-time setup of linked records (back to QuickBooks) for employees, jobs, payroll wage items and deductions – explaining and demonstrating the various pieces of information that QuickBooks has no mechanism of holding. Lastly it covers previewing, printing and troubleshooting your first set of certified payroll reports.
We will be adding Flash videos for the remaining two videos here shortly – those videos are the Certified Payroll Solution Download and Installation Video and the Certified Payroll Solution – QuickBooks Setup Video.
I’d welcome any feedback about the videos that you might have.
Nancy
