Government Funded Construction Projects – Quick Facts

$49.3 billlion in government construction spendingMany contractors across the United States are subject to the Davis-Bacon Act – including a growing number of small, medium, and large construction firms as a result of the American Recovery and Reinvestment Act of 2009 (ARRA).

ARRA provides billions of dollars in funding for the improvement of the nations’ infrastructure that in turn created a slew of new government-funded construction projects requiring certified payroll reporting.

According to USASpending.gov, as of November 23, 2009, there was $43.9 billion in spending targeted for the “construction of structures and facilities.”

A U.S. Federal Law, the Davis-Bacon Act of 1931, set “prevailing wage” rate requirements on public works projects.  All contractors and subcontractors who engage in government construction contracts and federally assisted construction projects over $2,000.00 are required to submit weekly – certified payroll reports to ensure government compliance.

What is a “prevailing wage”?

  • Determined by the U.S. Department of Labor
  • Based on wages for the area (including Union wages) in which the project will occur and the type of construction
  • Prevailing wage rates differ based on the type of work the employee performs and their level of skill
    • Can change by city, county, or job
  • Prevailing wage rates include BOTH an hourly wage rate PLUS an hourly fringe benefit amount
    • Can be more than what you currently pay your employees

What is the “hourly fringe benefit amount” and HOW is it paid?

  • Specified dollar amount in ADDITION to a base hourly rate of pay
  • Can be paid:
    • To the Union on behalf of the employee
    • To a “bona-fide” fringe benefit plan
    • In cash to the employee as part of his/her gross hourly rate of pay
    • The total hourly fringe benefit amount can be “split” between a bona-fide plan(s) with the balance paid in cash to the employee

What is a certified payroll report and what makes it “certified”?

  • Specially formatted payroll report consisting of the actual payroll report and a certification page
  • Must be submitted on a weekly basis
  • “Certification” is obtained via an ORIGINAL SIGNATURE of a company official

Is there a single, standard certified payroll-reporting format or form?

Not really – it will depend upon the state in which the construction project exists and if the project is funded with Federal or State money.

  • 24 states follow the reporting rules of the U.S. Department of Labor – Wage and Hour Division and require the filing of the Federal (USDOL) Form WH-347.
  • 13 States have their own State Prevailing Wage Laws and forms OR can require the WH-347 form when a job is funded fully by federal dollars.
  • 13 states have multiple State Agencies issuing Prevailing Wage Laws and forms, multiple compliance companies, electronic certified payroll reporting requirements OR can require the WH-347 form when a job is funded fully by federal dollars.

In addition to a weekly-certified payroll report, are their other reports that are required?

Absolutely!  It is a common misconception that all you have to do is submit a certified payroll report for each week that you work.  Additional reports include:

  • “No Work” Performed Report for weeks in which you have no employees on the job site.
  • Union/Bona-fide Plan Fringe Benefit Reports – on a monthly basis.
  • Union Dues Reports – on a monthly basis.
  • Federal, State, or Local EEOC/Workforce/Manning Reports – on a weekly, monthly, or annual basis (depending upon the State that the project resides in).
  • American Recovery & Reinvestment Act (ARRA) Reports – on a monthly basis.

How are contractors who use QuickBooks complying with prevailing wage reporting requirements?

  • Complex Excel spreadsheets which are manually updated each week
  • Use of the “alternate, substitute” certified payroll report (found in QuickBooks Enhanced Payroll and used with Premier or Enterprise Editions)
  • Stand-alone software programs which have no QuickBooks interface and require double-data entry each week
  • Through the use of QuickBooks integrated applications, specifically designed for compliance with prevailing wage requirements.

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