Construction companies who have ever built, renovated or repaired public property are probably already friends—or frenemies—with the Davis Bacon Act and certified payroll reporting.
With the help of the Federal WH-347 form, certified payroll reports must include accurate information regarding your company, employees, contracts and projects.
Congress passed the Davis Bacon Act (a.k.a. Davis Bacon or DBA) during the Great Depression to protect workers from the deflationary effects of intense competition for public works projects.
Every state has current county Davis Bacon wage rates listed online and can be found with the help of a wage determination number.
The DBA requires contractors and subcontracts to properly fill out weekly payrolls in order to satisfy Davis Bacon certified payroll requirements. Unfortunately, it can get complicated—and companies with federal jobs should beware, as there are stringent penalties for violations.
Certified Payroll Requirements
Employees on Davis Bacon jobs must receive the prevailing wage and fringe benefits being paid to similarly employed laborers in the region, as determined by the Department of Labor (DOL).
For contractors, selecting the correct job classification and making the right Wage Determination for each employee is critical to complying with DBA. Some categories are easy (plumber, painter, bricklayer) but others are more general (laborer), which can create confusion.
Employees on certified payroll jobs must also be paid on a weekly basis, and everything must be clearly documented in these payrolls—i.e. each employees’ name and address, correct job classification, rate of pay, daily and weekly hours worked, and amount actually paid (see Form WH-347).
A payroll submission becomes “certified” when the contractor or business owner signs the statement of compliance, which is included in the WH-347 form. Signing the statement of compliance designates that all payroll reports are completely accurate and all employee wages conform to the current Davis Bacon wage scale.
The Department of Labor offers the WH-347 form and instructions for completing the certified payroll form. As you can see, the process is lengthy and the DOL recommends designating 55 minutes to completing the form.
Have a federal contract for over $2,000? Beware—Davis Bacon applies, and not complying will get you in trouble.
Unusual Situations When Davis Bacon Applies
Be careful, because DBA applies in more situations than you might realize.
Over 60 other federal statutes actually invoke Davis Bacon provisions. This greatly increases the prevalence and geographical reach of situations in which Davis Bacon wages and benefits are owed.
Penalties for Violating Davis Bacon
The DOL has beefed up its audit team in recent years and increased compliance scrutiny. The Wage & Hours Division has collected more than $1.6 billion in back wages since 2009, and it hired 350 new investigators in 2014, according to the American Bar Association.
Penalties for non-compliance with DBA can go beyond enforcing the payment of back wages and fringe benefits all the way to withholding funds on federal contracts, contract termination, and even debarment from all government contracts for three years.
Workers on Certified Payroll jobs must be paid the prevailing wage for their job in the region on a weekly basis.
ExakTime’s Certified Payroll Software
A system like ExakTime can help you stay compliant by recording 100% accurate hours, lunches and overtime for all employees in real time.
With ExakTime, you can designate a job site as a “certified payroll” location with a simple drop-down menu. When you need to fill out Form WH-347, we’ve got certified payroll reporting that allows you to review all the hours worked at these sites by each employee, making compliance easy.
ExakTime also allows you to create customized “certified payroll” activity codes for every job at a Davis Bacon job site, so that employees on that job can clock in under the correct code for the hours they’re working at that site. Come payroll time, you’ll know exactly what you need to pay whom.
Finally, ExakTime automatically saves records of all employee timesheets indefinitely—which means reviewing when they worked and what you paid two months or two years ago is always just a few clicks away.