Prevailing Wage and Certified Payroll Reporting Requirements 2023

17 Apr Prevailing Wage and Certified Payroll Reporting Requirements 2023

Federal law requires certified payroll reports for government-funded projects that cost $2,000 or more. Certified payroll reports (also known as CPRs or “prevailing wage”) document wages, hours, rates, deductions, and benefits provided to every worker on your project. They ensure workers are receiving the prevailing wage in your area. Prevailing wage extends from the Davis-Bacon Act, passed federally in 1931, and amended most recently in 2002.

In many places, certified payroll reports are submitted weekly. In California, CPRs are submitted digitally and must be processed at least monthly. Though, some projects may require more frequent reporting, depending on the requirements of your contract. The State of California Department of Industrial Relations suggests weekly recording as a best practice. 

According to the California Department of Labor, “all contractors and subcontractors working on public works projects […] must submit electronic certified payroll records to the Labor Commissioner.” 

The Labor Commissioner allowed three exemptions from the requirements:

1. Projects monitored by the following legacy Labor Compliance Programs
   1. California Department of Transportation (Caltrans)
   2. City of Los Angeles
   3. Los Angeles Unified School District
   4. County of Sacramento
2. Projects covered by a qualifying project labor agreement
3. Projects covered by the small project exemption. The small project exemption applies to public works projects that do not exceed:
   1. $25,000 for new construction, alteration, installation, demolition, or repair
   2. $15,000 for maintenance

Tips to Stay Ahead of Certified Payroll Reports

1. Plan Ahead: If your first federal or state project is still in the future, take the time to develop a process for hiring, reporting, and data records before your project begins. 
2. Keep Your Records: According to the Fair Labor Standards Act, you will need to keep payroll records for at least 3 years. Make digital copies of your records and reports, and store them in an online database, such as Google Drive or Dropbox. Bonus points for monthly (or more) folder organization.
3. Consult Human Resource Experts: Automated payroll solutions, like those available with PayrollCentric, can ease the pressure of frequent certified payroll reporting. The ease of our technology lets you drop the spreadsheet management to focus on your actual work.

Prevailing Wage Penalties

Penalties for Davis-Bacon violations can be severe. They include fines, contract termination, and even civil/criminal liability. In California, employers face penalties of up to $200 per day for each underpaid worker.

Certified Payroll Can Be Simple. PayrollCentric Can Help.

If your business is in the business of state or federal construction contracts, certified payroll should be on your mind. But it doesn’t have to take over. If you have questions about certified payroll or other matters in human resource management, PayrollCentric can help. Call us at 310-258-9703 or contact us online.