Certified Payroll: Your Guide to Form WH-347 for Public Works
Need help onboarding international talent?
If your business is thinking about exploring contracts with the local, state, or federal government, you have to submit weekly forms to the government to show you’re paying your employees fairly. This extra layer of approval is called certified payroll.
Since certified payroll is all about ensuring legal compliance, it involves strict rules that you must follow. Unfortunately, Form WH-347, the form used for certified payroll reports, looks exceptionally confusing at first glance, and it can be hard to know where to start.
Let’s break down the ins and outs of certified payroll to help you make sense of Form WH-347. By the end of this article, you’ll know how to accurately fill out and store your weekly payroll report.
What is certified payroll?
Certified payroll is a weekly federal payroll report that uses Form WH-347. When businesses work on government-funded projects, they must fill out a certified payroll report every week and submit it to the agency overseeing the project.
Form WH-347 lists each worker and the type of work performed, as well as the worker’s hours, wages, withholdings, and compliance statements. This form assures that businesses pay their workers fairly.
When does the US government require certified payroll?
Federal and local contracts require you to complete certified payroll using Form WH-347 for federally financed or assisted construction projects that cost over $2,000.
Projects that require certified payroll vary from public infrastructure projects, like bridge or highway repairs, to new buildings for public use, such as schools.
“Construction contract” is a term used very loosely in the world of certified payroll–it applies to many non-construction public works projects. The artisans protected by certified payroll include:
- Construction teams
- Drywall professionals
- Cleaning crews
Because “construction” is so broad, companies that need to submit Form WH-347 are not just construction companies. Any business owner or payroll manager should prepare to comply with certified payroll for contract work on local and federal contracts.
Why does certified payroll exist?
Certified payroll exists because it was common for public works employees to be underpaid before and during the Great Depression. Certified payroll was a solution to ensure employer compliance.
The Davis-Bacon and Related Acts
The Davis-Bacon Act of 1931 (amended in 2009) guarantees that public workers receive fair pay through certified payroll. Davis-Bacon ensures laborers and mechanics contracted (or subcontracted) under government contracts are paid no less than the local prevailing wages and fringe benefits for comparable work on similar projects in the area as determined by the US Department of Labor (DOL).
Prevailing wage: how to determine required wages
As protected under the Davis-Bacon Act, contracted businesses must pay employees and subcontractors no less than the “prevailing wage,” including fringe benefits. Prevailing wage is the hourly rate of pay, benefits, and overtime typically paid to workers, laborers, and mechanics in a specific area. In many cases, the prevailing wage is the wage requirement set by the union.
A business's obligation to provide fringe benefits can take the form of bona fide benefit plans, funds, or programs. Employers can also make in-lieu cash payments to workers equal to the gross amount of fringe benefits owed.
To show compliance with the Davis-Bacon Act, you need to submit Form WH-347 every week within seven days after the regular pay date of the pay period.
Certified payroll requirements and Form WH-347, explained
Form WH-347 is confusing, like so many other federal forms. The top portion of the certified payroll form will require:
- The firm’s name and whether you’re a contractor or subcontractor
- The firm’s address
- The payroll number representing the week of work under the specific contract–the first form will be “1” and each week this number will increase sequentially
- The end date of the workweek (“For week ending”)
- The name of the project and its location
- The project or contract number, specified on your contract for the project
Then you can move on to the numbered columns:
- Column One: Worker’s name and last four digits of their social security number
- Column Two: The number of withholding exemptions for each employee; this column is included for convenience and is not required for certified payroll
- Column Three: Worker’s job classification (carpenter, electrician, laborer, etc.)
- Column Four: Hour division separated into seven mini-columns at the top for each day and date; each worker’s row will be separated into two mini-rows with “S” for standard hours and “O” for overtime hours
- Column Five: The total hours for each worker
- Column Six: Each employee’s pay rate including fringe benefits as determined by the prevailing wage rate
- Column Seven: Each employee’s gross pay
- Column Eight: Payroll deductions: Separated into six mini-columns to subtract each employee’s deductions, including FICA and withholding tax
- Column Nine: The gross wages earned minus the total deductions to equal the week’s net wages
How to report certified payroll with Form WH-347
On the back of Form WH-347 is a Statement of Compliance that you’ll sign to state that you paid each contracted employee no less than the prevailing wage. The statement must be signed by the contractor, subcontractor, authorized officer, or employee who supervises the payment of wages. This statement guarantees the worker, business, and payroll information on the form is accurate.
Once the form is filled out, you must submit it to the contract’s funding agency (the federal, state, or local government). If contract-related work wasn’t performed in a given week, then you don’t need to submit Form WH-347 that week.
If your project is entirely funded by state dollars (as opposed to federal dollars), you’ll need to check if your state has any specific reporting requirements for certified payroll in addition to Form WH-347.
The amount of time you’ll need to keep your certified payroll forms on hand will vary based on the type of contract for the project. It’s efficient to keep your forms in a digital file instead of a physical filing cabinet, ideally uploaded into your payroll software.
For federal projects, you’ll need to keep the payroll records for at least three years after the project is completed.
The timelines vary for state projects, but you should keep the payroll reports for two to four years.
Penalties for non-compliance
Since the Davis-Bacon Act is protected by the DOL, non-compliance can result in contract termination, contractor liability for costs to the government, and suspension from future projects for up to three years. In addition, you must pay back wages to any underpaid workers and potentially face criminal prosecution for intentional violations.
Violations of certified payroll include:
- Inadequate record keeping
- Failure to submit weekly WH-347 forms
- Worker misclassification
- Failure to pay the full prevailing wage for all hours worked
Use Deel for compliant certified payroll worldwide
Completing certified payroll accurately each week shouldn’t be a challenge.
Sound like something your business could use? Reach out and book a demo to see Deel in action.