Certified Payroll: Everything You Need to Know

If you’ve worked on publicly funded construction projects, chances are you’ve heard the term “certified payroll.” But what exactly is it, and what do businesses need to know to stay compliant? Whether you’re a contractor, subcontractor, or a payroll professional supporting these businesses, understanding certified payroll is key to avoiding penalties and maintaining good standing with government agencies.

Here’s a complete breakdown of what certified payroll is, how it works, and what’s required.

What is Certified Payroll?

Certified payroll refers to a weekly payroll report required by the Davis-Bacon Act and other related laws for contractors and subcontractors working on federally funded or assisted construction projects. The purpose of this report is to verify that workers are being paid prevailing wages and fringe benefits as determined by the Department of Labor for specific job classifications and geographic areas.

In simpler terms, certified payroll ensures fair pay standards on government projects.

Who Needs to Submit Certified Payroll?

Any contractor or subcontractor performing work on a covered federal, state, or local public works project that meets certain funding thresholds must submit certified payroll reports. This includes:

• General contractors

• Subcontractors

• Lower-tier subcontractors

If you’re working under a prime contract or as a sub on a qualifying project, you’re responsible for submitting reports even if the general contractor is already submitting theirs.

What Form Do You Need?

The primary form used for certified payroll reporting is the WH-347 Form from the U.S. Department of Labor. This form requires:

• Employee names and identifying numbers

• Work classification (e.g., carpenter, electrician, laborer)Hours worked each day and total for the week

• Rate of pay (including base wage and fringe benefits)Gross and net wages paid

• Withholdings and deductions

• Statement of compliance signed by an authorized company representative

Some state and local projects may require different forms or electronic submissions, so always check your contract or the funding agency’s requirements.

Why Is It Called “Certified” Payroll?

It’s called certified because the report must include a “Statement of Compliance” which is a sworn statement, signed by an authorized person from the company, attesting that the payroll is accurate and complete, and that workers have been paid at least the required prevailing wages.

Falsifying a certified payroll report is considered fraud and can carry serious penalties including fines, disbarment from future projects, or even criminal prosecution.

Key Certified Payroll Requirements

To stay compliant with certified payroll regulations, here’s what you’ll need to do:

Classify employees correctly according to prevailing wage determinations

• Pay at least the required prevailing wage (including any fringe benefit amounts)

• Submit payroll reports weekly

• Keep certified payroll records for at least 3 years

• Ensure deductions (such as union dues or insurance premiums) are properly documented

Failure to meet any of these requirements can trigger audits, withholding of payments, or legal action.

Common Challenges with Certified Payroll

Many contractors struggle with certified payroll because it’s complex and time-consuming. Some common hurdles include:

• Misclassifying workers, leading to underpayment or overpayment

• Not paying required fringe benefits correctly

• Missing deadlines for report submission

• Tracking multiple wage determinations across different counties or states

• Manually preparing reports, leading to errors

Because of these challenges, many businesses turn to payroll providers or software solutions that specialize in certified payroll compliance to automate the process.

How Missouri Valley Payroll Can Help

At Missouri Valley Payroll, we understand the unique challenges that come with certified payroll reporting. Our team specializes in helping contractors and subcontractors stay compliant, save time, and avoid costly errors.

With Missouri Valley Payroll, you’ll benefit from:

• Automated WH-347 form preparation

• Accurate tracking of prevailing wages and fringe benefits

• Ongoing support to help navigate complex wage determinations

• Easy access to payroll reports and compliance records

We work directly with contractors and their accountants to make certified payroll stress free so you can stay focused on the job site.

If you’re tired of the paperwork headaches or worried about compliance risks, we’re here to help.

Final Thoughts

Certified payroll is a critical compliance obligation for contractors and subcontractors on public works projects. It ensures fair labor practices and wage standards are upheld on government funded construction. But with strict reporting requirements and severe penalties for mistakes, it’s not something to take lightly.

Whether you handle certified payroll in house or outsource to a professional payroll provider like Missouri Valley Payroll, understanding the rules is the first step to staying compliant and stress free.

Need help with certified payroll? Reach out to Missouri Valley Payroll today to learn how we can simplify the process for your business.

Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or professional advice. Please consult with a qualified professional or the applicable government agency to ensure compliance with all certified payroll requirements for your specific situation.