QuickBooks Question – Tracking Prevailing Wage Fringe Benefits
A reader wrote to ask the following question:
We were just awarded a contract with the Department of Defense and have to pay our employees “prevailing wage” and submit certified payroll reports. I called Intuit Support to ask them about prevailing wage, certified payroll, and how to track the fringe benefits; they weren’t very helpful – they just told me that QuickBooks can produce the certified payroll report…….can you help me understand all this?
Answer:
Ok, let’s start with some basics:
- The Davis-Bacon Act of 1931 (a Federal Law) set wage rate requirements on government funded construction projects.
- All contractors & subcontractors who perform work on these public works projects, that have a value of $2,000.00 or more, are required to submit a certified payroll report on a weekly basis.
Prevailing Wage(s) rates are comparable to hourly wages PLUS hourly fringe benefit rates for the area in which the construction project is located in, type of construction it is, and the type of work employees are doing – carpenter, laborer, equipment operator, etc. Prevailing Wage Rates are found in the Contract Package and each employee must be classified and paid accordingly – these rates are often times higher than the hourly rate that you normally pay your employees.
A certified payroll report is a specially formatted payroll report, consisting of two pages:
- Certified Payroll Report – this contains information about who worked on the job, how much you paid them, etc.
- Statement of Compliance – this contains certain legal language and requires the original signature of a company official who is signing the document under penalty of perjury.
In your case, you will be required to file the U. S. Department of Labor Form WH-347 Certified Payroll Report, however, because this is a Department of Defense job – you will need to submit their Statement of Compliance (even though it has an expiration date of June 30, 2000).
Paying and tracking prevailing wage fringe benefits gets quite complicated, as they can be:
- paid to a Union on behalf of the employee
- paid to a bona-fide fringe benefit plan on behalf of the employee
- paid in cash to the employee
- or, a portion of the total hourly fringe benefit amount can be split between payments to a bona-fide plan with the balance in cash to the employee
Request our FREE 27 page eBook – 4 Ways Contractors Pay Prevailing Wage Fringe Benefits
Intuit was partially correct, QuickBooks does have an alternate/substitute Certified Payroll Report built into it – however, it is only available if you have an Enhanced Payroll Subscription AND you are using QuickBooks Premier (any flavor – Contractor, Accountant, etc) 2009 or 2010 OR Enterprise 9.0 and 10.0; but it is very different than the Federal WH-347 form.
What Intuit didn’t tell you – is that these prevailing wage projects require more than just the submission of a certified payroll reports, you may also be required to:
- submit EEOC/Work Utilization reports on a weekly, monthly or annually
- submit ARRA (American Recovery & Reinvestment Act) reports on a monthly basis
- generate Fringe Benefit Statements on a monthly basis (if you are paying the fringe benefits to the Union or a bona-fide plan)
- electronically file your certified payroll reports using Labor Compliance programs such as LCPtracker, TRS Consultants, Elation Systems, and others.
Watch a brief 10-minute video demonstrating how Certified Payroll Solution interfaces with QuickBooks to generate these reports.
3 Responses to QuickBooks Question – Tracking Prevailing Wage Fringe Benefits
Nancy Smyth, Sunburst Software Solutions, Inc.QuickBooks Construction & Payroll Expert
I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.
QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.
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I totally agree. A payroll processing company (such as ADP, Paychex, etc.) should understand not only the basic payroll needs (processing employee payroll, filing Federal, State an/or Local payroll tax reports) of a business but also special payroll reporting requirements (such as Certified Payroll for contractors working on government construction projects).
Outsourcing payroll is not always the best answer from government construction contractors, this is largely due to the fact that many payroll processing companies cannot provide the required “printed” certified payroll reports or an acceptable “electronic” file to submit to various LCP (Labor Compliance Programs). In this situation a contractor must STILL manually create these reports from the data provided by the payroll company.
I really enjoyed this post. You describe this topic very well. A payroll company should understand the needs of today’s small to medium sized business owner. Your time is precious! You can’t afford to waste time on non productive/non revenue producing activities such as Payroll, HR, or Employee benefits. Your payroll company should specialize in filling this need for you and their staff of experts should consult with you to develop a payroll and business services plan that is custom-made to your exact situation. Your payroll provider should offer speedy and convenient online access for any payroll service, benefit or reporting need. It should help employers in meeting business compliance issues today and in the future as your business succeeds in this cutthroat environment. The advantage of out-sourcing your payroll is that it relieves you of the annoyance and technicalities of running a business so you can concentrate on building your business.