Ask Me Anything – 10 Common Questions about Certified Payroll
Below are the 10 most common questions I’m asked just about every week about certified payroll and their answers. While these question commonly come from QuickBooks users the answers provided will apply to anyone who has to deal with the complexities of prevailing wage reporting.
1. I have to submit the Federal WH-347 form, how do I report the fringes that my company pays to the union hall?
The Federal form only requires that you report payments of cash in lieu of fringe benefits (or fringe dollars that you pay to the employee as part of gross wages for the week) – NOT fringes you pay to the Union Hall on behalf of the employee. For fringes paid to the Union Hall, check box 4(a) Where Fringe Benefits are paid to approved plans, funds, or programs on the Statement of Compliance (sign-off sheet). This doesn’t mean that you will not be asked to provide this information, but as a general rule it is not required. See the instructions on the U.S. DOL website for supporting information – https://www.dol.gov/whd/forms/wh347instr.htm
2. Do I include my subcontractors on my certified payroll reports?
No. The certified payroll reports that you submit should ONLY include information about your employees. Your subcontractors should submit a certified payroll report to you with information about their employees. You’ll then make a copy of the Subcontractors report and include it with your own.
3. Can I pay my employees on a bi-weekly basis?
Technically, everything to do with Certified Payroll is based on a weekly basis. If your accounting software can accrue or split the wages, taxes, etc. correctly between two individual weeks then you should be ok. You can add a “Remark” to the Statement of Compliance about payroll being issued on a bi-weekly basis – but I make absolutely no guarantees that you won’t get called on the carpet for it.
4. How do I report fringes paid in cash on the WH-347?
When you pay fringes in cash you report the base rate of pay/cash fringe amount in Column 6 on the report. So, for example, if the wage decision states that the rate of pay is $10.00 and the fringe rate is $5.00 and you pay the full fringe rate in cash – in Column 6 you will report $10.00/$5.00.
5. Where do I find the base and fringe rates that need to be paid to an employee on a job?
Federal Wage Determinations can be found on-line at https://www.wdol.gov/dba.aspx, however, most contracts have a Contracts Provisions section with a Labor Standards Clause – this is where you should find the Wage Decision for your specific project.
6. I’m a non-union contractor, can I take a credit for company paid health insurance?
Yes, but the credit must be annualized (see question #7). Under the Davis-Bacon Act and 29 C.F.R. § 5.23 other company paid items such as Life insurance, Pension, Vacation, Holidays, Sick Leave and Supplemental Unemployment Benefits may also be used as a credit. Check State specific prevailing wage laws to make sure these items are also allowed – just because at the Federal level something is allowable does not mean it is also allowable at the State level. For more information, see Calculating & Displaying Fringe Benefits on a Certified Payroll Report.
7. How do I calculate credits for company paid health insurance?
To calculate a credit you must annualize the total contribution between both prevailing and non-prevailing wage hours worked. A good rule of thumb (and a common practice) is to divide the annual contribution by 2080 hours. So, in the case of taking a credit for the company paid portion of an employee’s health insurance you would first take the monthly contribution amount and multiply it by 12 months (this determines the annual contribution) and then divide the annual contribution by 2080 hours to determine the hourly credit. For additional information consult this section of the U.S. Department of Labor Prevailing Wage Resource book – https://www.dol.gov/whd/recovery/pwrb/Tab10.pdf
8. How do I report salaried employees?
My advice on this one, especially if you accounting software cannot break down salary to an hourly value – is to switch the employee to an hourly basis.
9. Is QuickBooks compatible with LCPtracker, MyLCM and other compliance software?
No, while QuickBooks is capable of producing an alternate/substitute WH-347 there is no ability to upload that information. The compliance program that you mentioned (and others) require additional information to be submitted that is not tracked in QuickBooks, so you will either need to manually enter the data on-line or check out Certified Payroll Solution, which will create machine readable certified payroll data for most of the labor compliance software – https://www.sunburstsoftwaresolutions.com/certified-payroll-solution.htm
10. I can’t find a work classification for my employees on the Wage Decision …. Help What Do I Do?
At the Federal level, you can complete a Request for Authorization of Additional Classification and Rate form – https://www.dol.gov/whd/govcontracts/SF1444.pdf
If this is a State funded construction project contact the Prevailing Wage Division of your State Department of Labor to determine if they have a similar form.