How to Conquer Davis-Bacon Act Compliance

Learn how certified payroll reporting programs can help you manage government requirements.

Government work has always been profitable, especially in recent years. But government projects come with strings attached. The Davis-Bacon Act applies to federally-funded contracts in excess of $2,000, and it enforces strict requirements. The act requires that each employee be paid prevailing wages, but tracking those wages can be complicated. In fact, the Department of Energy has published a 46-page Davis-Bacon guide.

The act requires contractors to submit weekly payroll reports tracking types of jobs worked by hours per day, pay rates, work class and more. While many states use a common federal form, WH-347, nearly half have their own version, and some agencies within states have yet another standard form to follow. Plus, if no work is done in a particular week, “No Work” payroll reports must be submitted. 

General contractors have to make sure all subcontractors are compliant. For larger jobs, certified payroll reporting can take hours every week, which can cost thousands in employee time each year. Any mistakes made can result in fines or debarment.

To deal with the enormous amount of paperwork, many contractors use software programs that make certified payroll reporting easier. These programs have the required forms built into the system. 

Save Time and Money

When you process payroll, keying in employee information can typically be very time consuming. Certified payroll reporting programs streamline Davis-Bacon reporting by automatically filling in municipal, state and federal forms. This simplifies the reporting process and prevents the need to track down the right form. 

Some of these software programs can integrate with major payroll providers, and others work with accounting software programs or larger project management systems. All of these programs take data you have entered and format it for government use, reducing data entry time. 

By automatically completing the reports, certified payroll reporting systems take one step out of the process. One company using this system, Western Enterprises, saved $12,000 a year in labor costs.  Every company will not be able to save this much, but reducing reporting time from hours to minutes can add to the bottom line. 

Prevent Backlogs

A paperless office is unrealistic for most contractors, but moving in that direction will help streamline your company. After you turn your payroll data into Davis-Bacon approved forms, you simply print and mail them. Since the data will be stored in the system, you will not need separate paper records.

In some instances, these programs make it possible in to create reports remotely. Since these reports can be easily created when you process payroll, you will not have to worry about paperwork backlogs.

Avoid Legal Penalties

Contractors who do not keep up with certified payroll reporting can face hefty fines and even debarment from future work. Ignorance cannot be used as a defense. The law does not classify reporting errors as willful and unwillful, which means even contractors with good intentions will have to pay a penalty.

Since certified payroll reporting software automatically completes the required forms and calculations, inadvertent math errors can be avoided. 

Online, subscription-based systems offer a secure, remote and accessible place for your payroll reports. Your reports will be safe if a fire or flood occurs, which gives you peace of mind. 

Construction Business Owner, May 2012