Federal Davis-Bacon laws ensure that workers are paid appropriate wages according to their craft and the location of the project. In order for contractors to demonstrate that they’re meeting these requirements, they must produce a number of reports regularly.
The most well known report is the Certified Payroll Report, or the WH-347, that tracks the relevant wage, time, craft, and fringe data per employee per week.
There are several other forms that are used to track compliance with prevailing wage, in addition to the certified payroll report itself. In this article, we’ll look at (1) what these forms are, (2) what information you need, (3) where and when the forms are submitted, and (4) what makes them challenging.
Certified Payroll Report WH-347
What is it?
The WH-347 is the report used to show compliance with Davis-Bacon wages and benefits. It is filed weekly and sent to the contracting authority on the project for review.
What information is required?
A Certified Payroll Report requires a ton of information that can be time-consuming to fill out if you don’t have the right system in place. The following information is all required to submit the form:
- Firm and project information
- Contractor name and address
- Week ending date
- Payroll number
- Project name and location
- Project or contract number
- Worker and pay information
- Name and individual ID number, such as last four digits of Social Security number
- Withholding exemptions
- Classification (Carpenter, Plumber, Laborer 1, etc.)
- Standard and overtime hours worked by craft, specific to this project
- Total hours
- Pay rate
- Fringe benefit rate
- Gross pay
- Itemized deductions
- Net pay
See an example form for details on how to create a WH-347.
Where and when it’s submitted
The WH-347 Certified Payroll Report is reported and submitted each week after payroll has been completed. The signed report is submitted to the hiring entity, labor compliance firm, awarding body, and/or the prime contractor.
Common contractor challenges
- Davis-Bacon requires weekly payroll payments to workers. Contractors who have semi-monthly or biweekly payroll schedules have to revise their payroll frequency in order to comply.
- By far the most common mistake we see is listing an incorrect classification. This can be mitigated by defining custom job activities at the start of the job so that your workers are only clocking in with pre-vetted activities on their time app.
- All workers on a Davis-Bacon project must be classified as and reported as employees on Certified Payroll Reports. Independent contractors are prohibited on these projects.
- The first week on site is considered payroll number one, and each subsequent report is numbered accordingly. The last reported week on site is marked as FINAL. If no work is completed on site during a particular week, a “no work” report must be submitted.
Fringe Benefit Statement
What is it?
The Fringe Benefit Statement lists the employer contributions made on behalf of each employee. It is submitted with the first certified payroll report on a project.
What information is required?
The statement provides the annualized (per hour) amount of the employer contribution to each company benefit plan. To calculate this, calculate the annual amount for each contribution, then divide by the number of hours worked. This must be broken out by employee if the amount differs.
See an example form for details on how to file a Fringe Benefit Statement.
Where and when it’s submitted
The Fringe Benefit Statement is submitted with the first certified payroll report to the prime contractor, labor compliance company, awarding body, or whomever a subcontractor is contracted with.
Common contractor challenges
- Contribution rates may change midyear, requiring contractors to complete another form.
- Fringe benefit amounts may differ by employee, so you need an effective system to keep track of any discrepancies.
Statement of Compliance WH-348
What is it?
The statement of compliance accompanies each weekly certified payroll report (WH-347). It’s a signed statement indicating that the information on the WH-347 is true and correct. It must be signed by someone with active knowledge of payroll amounts and processing. It also outlines where fringe benefits were paid, either to the worker or to a qualified plan or program.
What information is required?
- Name and title of certifying official (person with knowledge of payroll rates and processing)
- Week start and end dates
- Name of plan to whom benefits are paid, or name of worker if paid direct
See an example form for details on how to create a WH-348.
Where and when it’s submitted
The WH-348 is submitted weekly with the WH-347. The signed report is submitted to the hiring entity, labor compliance firm, awarding body, and/or prime contractor.
Common contractor challenges
- Owner-operators cannot sign their own Statement of Compliance forms. The company that hired them is required to sign the document to certify proper hours and payment.
- The form can be signed only by those who have direct knowledge of proper payment to workers, ideally an officer of the company.
DOL Apprentice Certification
What is it?
An Apprentice Certification is a recognition from the Department of Labor that an apprentice is registered and in good standing with a DOL approved apprenticeship program. The certification is good for 90 days after it is issued.
When is it required?
A DOL Apprentice Certification is required any time an apprentice is used on a federally funded project, such as upcoming projects funded by the Federal Infrastructure Plan.
Where and when it’s submitted
The Apprentice Certification is submitted the first week the apprentice is on site on a Davis-Bacon project. It’s submitted to the hiring entity, labor compliance firm, awarding body, and/or prime contractor.
Common contractor challenges
- Keeping up with certification expiration dates, as new certificates must be submitted every 90 days for each apprentice.
Authorization for Deduction
What is it?
An Authorization for Deduction is a form that details and authorizes any nonstandard tax deductions that are taken from a worker’s paycheck. The form is project specific and must be signed by the worker.
What information is required?
- What the deduction is for
- How often the deduction is to be made (weekly, monthly, one-time)
- Amount of the deduction
Where and when it’s submitted
The Authorization for Deduction form is submitted no later than the first week in which the deduction is reported on certified payroll. It is submitted to the hiring entity, labor compliance firm, awarding body, and/or prime contractor.
Common contractor challenges
- It can be tough to get workers to come into the office to sign the form.
- Sometimes the amounts of the deductions may vary by week or by gross pay.
Who enforces and ensures that these forms are correct?
Usually, the forms are submitted up the contractor chain to the project owner or agency for final review. The prime contractor on a federal project is responsible for ensuring that all subcontractor workers are paid correctly. They can be held financially responsible for paying subcontractor workers in some instances. So, most general contractors will review certified payroll reports and other documentation carefully to ensure the correct rates and classifications were used.
Once the prime contractor has approved the reports, they go up the chain to the hiring entity, which may pass them on to others, such as labor compliance agencies or the US Department of Labor.
What happens if you are not compliant?
The penalties for noncompliance with documentation requirements include potential fines, withheld future payments, contract termination, and possible debarment from future federal contracts.
Conclusion
With so much at stake, it’s critical to ensure that certified payroll reports and other forms are correct and turned in in a timely fashion. Using an automated report generator is one way to minimize errors and file your reports on time.
Always make sure to review each form carefully before submitting it to ensure that the proper information has been included. For more information regarding Davis-Bacon and compliance requirements, see the US Department of Labor Resources for Employers and Final Rulings and Opinion Letters.
