Certified Payroll

What is Certified Payroll?

Certified payroll is a weekly wage report that contractors and subcontractors must submit on federally funded construction projects. It documents each worker's hours, job classification, and pay rate to prove compliance with prevailing wage law.

The requirement comes from the Davis-Bacon Act of 1931, which applies to most federal construction contracts over $2,000. Contractors submit the report on Form WH-347, along with a signed statement of compliance confirming the payroll data is accurate.

Why Does Certified Payroll Matter?

Certified payroll gives federal agencies a paper trail showing that public money is not funding wage theft or unfair labor practices. For contractors, it is also the gatekeeper for future federal work: agencies check certification history before awarding new contracts.

Getting it wrong carries real cost. Errors can trigger withheld payments, contract debarment, or in cases of falsified records, criminal exposure. According to Forbes Advisor, debarment from federal contracts can last up to three years, which makes accuracy a business continuity issue, not just a paperwork task.

How Does Certified Payroll Work?

Each week, the contractor reports every laborer's name, job classification, hours worked, and gross wages, alongside the prevailing wage rate for that classification and region.

Accurate reporting starts with accurate source data. Crews working multiple job sites need reliable worker time tracking to capture start times and classification changes as they happen, not reconstructed after the fact.

Fringe benefits count too. Health insurance and retirement contributions can be credited toward the wage obligation, but only when documented alongside cash wages in the same report.

How is Certified Payroll Different From Regular Payroll?

Regular payroll pays employees correctly and on schedule. Certified payroll adds a compliance layer on top of that: it proves, in writing, that the pay meets a government-set wage floor.

Regular Payroll	Certified Payroll
Pays any negotiated wage rate	Must meet the DOL prevailing wage rate
No wage classification reporting required	Requires job classification per worker, per week
Internal recordkeeping only	Weekly submission to the contracting agency
Overtime governed by the FLSA	Overtime also governed by the Contract Work Hours and Safety Standards Act

What Are the Key Requirements for Certified Payroll Compliance?

A compliant certified payroll program generally includes:

Weekly WH-347 submissions for every week worked, including weeks with no activity
Correct job classification for each worker, matched to the applicable wage determination
Overtime pay for hours beyond 40 per week, tracked using accurate hourly wage calculations
A signed statement of compliance attached to each weekly report
Payroll and time records retained for at least three years after project completion
Staff trained to the standard of a Certified Payroll Professional where certified payroll volume justifies dedicated expertise

Who Uses Certified Payroll and Why?

Certified payroll applies to prime contractors and subcontractors on covered federal construction work: general contractors, electricians, painters, and other trades billing hours on the jobsite.

HR and payroll teams own the compliance side. Distinguishing hourly laborers from exempt personnel and other salaried roles keeps reports limited to workers actually covered by prevailing wage rules.

The Society for Human Resource Management maintains resources for HR teams supporting government contractors, covering obligations beyond payroll alone.

How Can HR Teams Reduce Certified Payroll Errors?

Most violations trace back to misclassification or incomplete time records, not deliberate wage theft. Applying straight-time and overtime rules correctly for every classification, every week, closes the gap auditors look for first.

HR Cloud's time tracking software captures job-site hours as they're worked and feeds them into payroll, cutting the manual reconstruction behind most reporting errors. Explore the full HR glossary for related terms.

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Frequently Asked Questions

Q: Who has to file certified payroll?

A: Contractors and subcontractors performing construction, alteration, or repair work on federal contracts over $2,000 must file certified payroll under the Davis-Bacon Act.

Q: What form is used for certified payroll?

A: Contractors submit Form WH-347 to the contracting agency each week, along with a signed statement of compliance.

Q: How is the prevailing wage determined?

A: The Department of Labor surveys wages paid to similar workers in a trade and area, then publishes a wage determination for that classification and region.

Q: How long must certified payroll records be kept?

A: Records must generally be retained for at least three years after project completion, covering hours, classifications, and pay rates.

Q: What happens if certified payroll is filed incorrectly?

A: Errors can lead to withheld contract payments, back pay obligations, debarment from future federal contracts, and in cases of falsified records, criminal penalties.

Q: Does certified payroll apply to salaried office staff?

A: No. Certified payroll covers on-site laborers and mechanics performing manual work; administrative, executive, and professional employees are generally not covered.