Should I Use a Construction Payroll Provider for My Business?

Q:
I am an office manager for a growing construction contractor, and we are struggling to handle payroll in-house. The complexities of union setups and all of the governmental reporting are extremely time consuming.  The worst part is that I don’t feel confident we are in complete compliance with all of the tax jurisdictions in which we operate.  The owner and I have recently been discussing outsourcing the payroll function. Is this something you would recommend, and, if so, what should we look for in a payroll provider?

Kristen

A:
First, let me assure you that you are not alone in being pressed for time and resources and feeling overwhelmed by all of the payroll compliance required in today’s construction companies. Especially for contractors operating across state lines, the compliance and reporting can be frustrating and overwhelming. Many companies in your situation have found relief by outsourcing the payroll function to a qualified provider that is familiar with the nuances of the construction business. Their time and resources can now be devoted to more important areas of the business.  I recommend doing a cost vs. benefit analysis to decide whether to keep your payroll in-house or to outsource it.  Many companies find that compliance with things like multi-state taxes, workers’ compensation and certified payroll reporting, union and prevailing wage scenarios, Equal Employment Opportunity (EEO) and minority compliance can be better handled by outsourcing.

Assuming you do decide to outsource, be sure to carefully research any payroll company you are considering working with to determine if it can handle construction payroll. I would ask for references, and be sure to follow up with them to ask about their experience with the company. Check to see if the company handles all of the various types of reporting specific to the construction industry, and ensure it is experienced in handling any union and/or prevailing wage setups that might apply to your business. Finally, be sure the payroll provider handles payroll for all fifty states and their associated localities.

Finding a company you can trust to handle your payroll can give you peace of mind and free up your time and resources for the many other responsibilities on your plate.

Fred
 

Construction Business Owner, May 2010