What is Certified Payroll Reporting? Everything Contractors Need to Know to Avoid Penalties

You just won your first federal construction contract. Congratulations! Then the general contractor emails: “Submit your certified payroll reports weekly.” You have no idea where to start, the deadline is Friday, and Google isn’t helping. Sound familiar?

Here’s the thing about certified payroll reporting—it’s one of those requirements that seems designed to confuse people. The forms look intimidating. The wage determinations read like legal documents. And the penalties? Let’s just say they’re motivation enough to figure this out quickly.

Certified payroll reporting is a detailed weekly payroll documentation requirement for contractors and subcontractors working on government-funded construction projects. These reports verify that workers receive legally mandated prevailing wages and benefits as required by the Davis-Bacon Act and state/local prevailing wage laws.

Think of it this way: when you work on a private project, you pay your workers whatever rate you’ve agreed upon. But on public works projects funded by taxpayer dollars, the government wants proof that everyone’s getting paid fairly. That’s where certified payroll comes in.

In this guide, we’re going to walk through everything you need to know—from figuring out if you even need to file certified payroll reports to completing your first Form WH-347 without losing your mind. By the end, you’ll have a clear roadmap for staying compliant without the headaches.

Do You Actually Need Certified Payroll Reporting?

Let’s start with the most important question: does your project even require certified payroll?

Not every construction project falls under these requirements. The rules primarily apply to publicly funded projects—meaning construction work paid for with federal, state, or local government money.

Projects That Require Certified Payroll

Here’s where certified payroll reporting comes into play:

Federal Projects: Any construction, alteration, or repair of public buildings or public works funded by the federal government with a contract value exceeding $2,000. Yes, you read that right—just $2,000. That threshold hasn’t changed since 1931.

State and Local Projects: Many states have their own prevailing wage laws (often called “Little Davis-Bacon Acts”). These vary by state, but commonly include:

• Highway and bridge construction
• Public schools and universities
• Government buildings and facilities
• Water and sewer infrastructure
• Public transportation projects
• Affordable housing developments (in some jurisdictions)

Who Has to File: Both prime contractors AND all tiers of subcontractors. If you’re three levels down the subcontractor chain, you’re still responsible for certified payroll reporting for your workers.

Quick Decision Guide

Ask yourself these three questions:

1. Is the project funded (fully or partially) with public money? If yes, probably required.
2. Does the contract value exceed the threshold? Federal is $2,000; states vary ($25,000 in California for new construction, for example).
3. Are there any exemptions that apply? Some projects with qualifying labor agreements or covered by legacy compliance programs may be exempt.

When in doubt, assume you need it. The cost of filing certified payroll reports is minimal compared to the penalties for not filing when you should have.

Certified Payroll vs. Regular Payroll: What’s the Difference?

You’re already doing payroll for your business, so why can’t you just use those same records? Good question. The answer reveals why certified payroll exists in the first place.

The Key Differences

Here’s what really sets certified payroll apart: you’re certifying under penalty of perjury that the information is accurate and compliant. This isn’t just data entry—it’s a legal statement.

When you sign that Form WH-347, you’re telling the government: “I swear these workers were classified correctly, paid the right wages, and received required benefits.” If that’s not true, you’re not just facing financial penalties. You could face criminal charges for perjury.

That signature is why accuracy matters so much.

The Davis-Bacon Act: The Law Behind Certified Payroll

Let’s talk about why certified payroll reporting exists in the first place. The answer goes back to 1931 and a piece of legislation called the Davis-Bacon Act.

What is the Davis-Bacon Act?

During the Great Depression, some contractors were importing workers from other regions and paying them pennies on the dollar to undercut local contractors. Representative Robert Bacon and Senator James Davis introduced legislation to stop this practice.

The Davis-Bacon Act requires contractors and subcontractors on federally funded construction projects valued over $2,000 to pay workers no less than the local prevailing wages and fringe benefits for similar work in that geographic area.

Here’s the simple version: if you’re building a federal courthouse in Chicago, you need to pay your electricians at least what electricians typically earn in Chicago—not what you might pay them in a lower-cost market.

How Prevailing Wages Are Determined

The U.S. Department of Labor’s Wage and Hour Division determines prevailing wage rates based on surveys of wages paid to workers in specific job classifications in specific geographic areas.

These rates are published as wage determinations and include:

• Hourly base wage rate
• Fringe benefit rate
• Overtime multiplier (typically 1.5x)
• Geographic scope (usually by county)

You can find these wage determinations at Sam.gov for federal projects. For state projects, check your state’s Department of Labor website.

Davis-Bacon Related Acts (DBRA)

The original Davis-Bacon Act has spawned dozens of related laws that extend similar requirements to other federally funded projects:

• Federal-Aid Highway Acts
• Housing and Community Development Act
• Clean Water Act projects
• Federal transit grants
• And many more

If federal money is involved in construction, there’s a good chance Davis-Bacon requirements tag along.

State “Little Davis-Bacon” Laws

More than 30 states have enacted their own prevailing wage laws for state-funded projects. Some mirror federal requirements closely; others have their own thresholds, rates, and processes.

Examples:

• California: Projects over $1,000 for public works; detailed electronic reporting requirements
• New York: Public work contracts exceeding $5,000; 6-year record retention
• Illinois: All public works projects; specific form requirements

The tricky part? If your project receives both federal and state funding, you typically have to comply with whichever law is stricter.

Required Forms and Where to Get Them

Now we’re getting into the practical stuff. What forms do you actually need, and where do you find them?

Form WH-347: Your Primary Federal Form

Form WH-347 (officially titled “Payroll for Contractors”) is the standard federal certified payroll form. It’s a weekly report that documents:

• Project and contractor information
• Each worker’s name, classification, and hours worked
• Hourly rates (base wage + fringe benefits)
• Gross wages and deductions
• Net wages paid
• A signed statement of compliance

You can download Form WH-347 directly from the U.S. Department of Labor website.

The form comes with instructions, but fair warning: those instructions are written in government-speak. We’ll break down exactly how to fill it out in the next section.

State-Specific Forms

Many states require their own certified payroll forms or electronic submission portals:

California: Uses the Department of Industrial Relations’ electronic certified payroll reporting system. You can’t just submit a WH-347; you must use their online portal.

New York: Accepts WH-347 but also provides its own form (Payroll Report Form A-345).

Massachusetts: Has specific requirements through the Office of the Attorney General.

Illinois: Department of Labor provides certified payroll templates for state projects.

Check with your state’s Department of Labor or the contracting agency to confirm which forms they accept.

Where to Submit

Submission location depends on the project:

• Federal projects: Usually to the contracting officer or their designee
• State projects: State labor department or project owner
• Local projects: City or county contracting office

Your contract documents should specify exactly where to send certified payroll reports. If they don’t, ask before the first deadline.

Step-by-Step: How to Complete Your First Certified Payroll Report

Alright, you’ve got Form WH-347 in front of you. Now what? Let’s walk through this section by section.

Section 1: Project and Contractor Information

Top of the form:

• Project name and location (exactly as stated in your contract)
• Your company’s legal business name
• Your business address
• Project or contract number
• Week ending date

Pro tip: The “week ending” date is critical. Most certified payroll reports cover a standard workweek (often Saturday to Friday). Whatever week you choose, stay consistent throughout the project.

Section 2: Employee Information

This is the heart of the form. For each employee who worked on the project that week, you’ll record:

Column 1 – Name and Identifying Number: Full legal name and last four digits of Social Security Number.

Column 2 – Number of Withholding Exemptions: From their W-4 form.

Column 3 – Work Classification: Here’s where it gets important. You must use the exact classification from the applicable wage determination. “Electrician” is too vague. You need “Electrician, Journey Level” or “Electrician, Apprentice (2nd year).”

This is where many contractors trip up. If the wage determination lists specific classifications, use those exact terms. Misclassifying workers is one of the fastest ways to fail an audit.

Finding the Right Wage Rate

Before you can fill out the wage columns, you need to know the prevailing wage rate for each classification.

For federal projects:

1. Go to Sam.gov/wage-determinations
2. Search by state/county and construction type
3. Find the wage determination number referenced in your contract
4. Look up your worker’s classification
5. Note both the base wage rate and fringe benefit rate

For state projects: Visit your state labor department’s prevailing wage section. Most states maintain searchable databases.

Section 3: Daily Hours Worked

Columns 4-10: Record hours worked each day of the workweek.

Separate regular hours (typically first 8 per day or 40 per week) from overtime hours. Some projects have different overtime rules, so check your wage determination.

If someone worked on multiple classifications in one week, you’ll need separate lines for each classification.

Section 4: Wage Information

Column 11 – Total Hours: Add up the week’s hours.

Column 12 – Rate of Pay: This has two parts:

• Base wage rate: The hourly rate from the wage determination
• Fringe benefit rate: Listed separately

Example: If the prevailing wage determination shows:

• Base wage: $45.00/hour
• Fringe benefits: $18.50/hour
• Total prevailing wage: $63.50/hour

You can pay the fringe benefits in cash (adding to the worker’s check) or provide equivalent benefits like health insurance, retirement contributions, etc.

Column 13 – Gross Amount Earned: Hours × Rate

Column 14 – Deductions: List each deduction and amount (federal tax, state tax, Social Security, etc.)

Column 15 – Net Wages Paid: Gross minus deductions

Understanding Fringe Benefits

This confuses a lot of first-timers. You have two options:

Option 1 – Pay in Cash: Add the fringe benefit rate to the hourly wage and pay it all in cash. Simple, but expensive.

Option 2 – Provide Actual Benefits: If you provide health insurance, retirement plans, paid leave, or training programs, you can count these toward the fringe benefit requirement.

Here’s the catch: Your benefits must equal or exceed the fringe benefit rate. If the rate is $18.50/hour and your health insurance only costs $15/hour per employee, you need to pay the $3.50 difference in cash.

Most contractors use a combination—some benefits, some cash—to meet the requirement.

Section 5: The Statement of Compliance

This is the serious part. At the bottom of the form, you (or someone authorized to sign for your company) must sign a statement certifying that:

• The payroll information is correct
• Workers were paid the required wages
• No kickbacks or deductions were made except those shown
• This report complies with all applicable labor laws

You’re signing under penalty of perjury. Don’t sign if you’re not certain the information is accurate.

Common Form WH-347 Mistakes to Avoid

1. Using vague job classifications: “Laborer” instead of “Laborer, Common”
2. Forgetting to separate base wage and fringe benefits: They must be listed separately
3. Not reporting workers who worked zero hours that week: If they’re on the project roster, include them with zero hours
4. Incorrect overtime calculations: Missing the 1.5x multiplier
5. Signing blank or incomplete forms: Never, ever do this
6. Using the wrong wage determination: Make sure it matches your contract
7. Failing to update when workers change classifications: If someone moves from apprentice to journey level, update their classification immediately

Your Weekly Certified Payroll Workflow

Once you’ve filed your first report, you’ll need a system to keep up with weekly submissions. Here’s a practical workflow that works for most contractors.

Monday: Collect Time Records

• Gather timesheets from the previous week
• Verify which workers were on the covered project
• Confirm job classifications
• Note any workers who changed tasks/classifications

Tuesday-Wednesday: Prepare the Report

• Complete Form WH-347 or your state’s equivalent
• Double-check wage calculations
• Verify all fringe benefits are accounted for
• Review for completeness and accuracy

Thursday: Internal Review

• Have someone other than the preparer review the report
• Check for common errors
• Verify the wage determination numbers
• Confirm all signatures are collected

Friday: Submit

• Submit the certified payroll report to the required agency
• Keep confirmation of submission (email receipt, certified mail tracking, etc.)
• File your copy with project records

Pro tip: Don’t wait until Friday afternoon. Submit early in the week if possible. If there’s a problem with your submission, you’ll have time to fix it before the deadline.

What If There Was No Work That Week?

You still need to file. Submit a “no work” payroll report indicating the project number, dates, and a note that no work was performed that week. Don’t just skip the submission—that’s non-compliance.

Record Retention Requirements: How Long to Keep Everything

You’ve submitted your certified payroll reports. Now what do you do with all those records?

Federal Requirements

Under the Davis-Bacon Act and Fair Labor Standards Act, you must retain certified payroll records for at least three years after project completion.

This means:

• Original certified payroll reports
• Supporting documentation (timesheets, wage determinations, etc.)
• Correspondence with contracting agencies
• Proof of submission

State Requirements: Longer Than Federal

Many states require longer retention periods:

• California: 5 years from project completion
• New York: 6 years from final payment
• Illinois: 5 years
• Massachusetts: 3 years (matches federal)

The rule: Follow whichever retention period is longer—federal or state. If you’re working on a project with both federal and state funding in California, keep records for 5 years, not 3.

What Exactly Should You Keep?

Beyond the certified payroll forms themselves:

• Timesheets or time records: Original source documents showing hours worked
• Wage determinations: The specific determination that applied to your project
• Fringe benefit records: Proof of insurance premiums paid, retirement contributions, etc.
• Worker classification documentation: Anything showing why workers were classified as you reported
• Proof of submission: Email confirmations, certified mail receipts, portal screenshots
• Correspondence: Any communication with contracting agencies about payroll

How to Store Records

Digital is best: Scan paper records and store them in a secure, backed-up system. Cloud storage services work well, just ensure they’re secure and organized by project.

Organization tips:

• Create a folder for each project
• Within each project folder, create subfolders by week
• Use consistent naming: “CPR_[Project Name]_[Week Ending Date]”
• Keep wage determinations in the main project folder
• Store all project-related correspondence together

Don’t delete or destroy anything until the retention period expires. Audits can happen years after project completion. I’ve talked to contractors who faced audits four years after finishing a project. Fortunately, they still had their records.

Common Mistakes and How to Avoid Them

After talking with contractors who’ve been through audits, certain mistakes come up again and again. Let’s tackle the big ones.

Mistake #1: Worker Misclassification

The problem: Using incorrect job classifications or classifying experienced workers as apprentices to pay lower wages.

The solution: Always reference the specific wage determination for your project. When in doubt, classify workers at the higher level. The few extra dollars per hour is nothing compared to the penalty for misclassification.

Mistake #2: Inadequate Fringe Benefit Documentation

The problem: Claiming credit for fringe benefits without proper documentation to prove you actually provided them.

The solution: Keep detailed records of:

• Health insurance premium payments
• Retirement plan contributions
• Apprenticeship or training program costs
• Paid leave accruals

If you’re counting it toward fringe benefits, document it.

Mistake #3: Incomplete or Missing Reports

The problem: Skipping a week’s report because “nothing happened” or submitting reports with blank fields.

The solution: Submit every week, even if it’s a “no work” report. Never submit an incomplete form. If a field doesn’t apply, enter “N/A” rather than leaving it blank.

Mistake #4: Incorrect Overtime Calculations

The problem: Paying straight time for all hours instead of time-and-a-half after 40 hours (or 8 hours daily in some jurisdictions).

The solution: Understand the overtime rules for your specific wage determination. Most require 1.5x for hours over 40 per week, but some have daily overtime requirements too.

Mistake #5: Not Tracking Multi-Classification Workers

The problem: A worker performs both carpentry and general labor in the same week, but you only report one classification.

The solution: Create separate line entries for each classification. If someone worked 20 hours as a carpenter and 20 hours as a laborer, list them twice with the appropriate hours and rates for each.

Mistake #6: Ignoring Wage Determination Updates

The problem: Continuing to use outdated wage rates after a new determination is issued.

The solution: Monitor for wage determination updates throughout your project. When a new determination is issued, implement the new rates immediately going forward.

Mistake #7: Commingling Project Time

The problem: Workers split time between a covered project and non-covered work, but you don’t track them separately.

The solution: Maintain separate time records for each project. Only hours worked on the covered project go on certified payroll—but those hours must be paid at prevailing wage rates.

Mistake #8: Improper Deductions

The problem: Deducting costs for tools, uniforms, or equipment that bring the worker’s effective wage below the prevailing rate.

The solution: Any deductions must be voluntary and not reduce wages below the prevailing wage rate. When in doubt, don’t deduct.

Penalties for Non-Compliance: What’s Actually at Stake

Let’s be direct about this: certified payroll violations are expensive. Really expensive.

Federal Penalties

Under the Davis-Bacon Act and related statutes, penalties can include:

Back Wage Payments: You must pay affected workers the difference between what you paid and what you should have paid—plus interest. For a misclassified worker over several months, this can easily reach tens of thousands of dollars.

Civil Monetary Penalties: Up to $50,000+ for willful violations (adjusted for inflation).

Contract Termination: The government can terminate your contract for non-compliance.

Debarment: You can be blacklisted from federal contracting for up to three years (or longer for repeated violations). This means no federal contracts, no subcontracts on federal projects—nothing.

Criminal Prosecution: In cases of willful falsification, false statements, or perjury, you could face criminal charges, fines, and even imprisonment.

State Penalties

States often impose their own penalties that can exceed federal penalties:

California: Up to $200 per day for each worker paid less than the prevailing wage, plus back wages. One contractor faced over $127,000 in penalties for misclassifying workers for just a few weeks.

New York: Civil penalties up to 25% of the underpayment amount, plus back wages, plus debarment.

Illinois: $5,000 per violation per day, plus back wages and debarment.

Real-World Example

A mid-sized contractor in California won a $2.8 million school renovation contract. To cut costs, they classified several journey-level electricians as “general laborers” and paid them $28/hour instead of the $52/hour prevailing wage for electricians.

The scheme lasted 12 weeks before an anonymous worker complaint triggered an audit. The result:

• $167,000 in back wages
• $89,000 in civil penalties
• $22,000 in audit costs
• 2-year state debarment
• Complete loss of reputation with public agencies

Total cost of trying to save money on wages: Over $278,000, plus future business lost to debarment.

The lesson? It’s always cheaper to just pay the right wages from the start.

Software and Tools: Do You Need Them?

Here’s the question contractors always ask: “Can I just use Excel, or do I need specialized software?”

The honest answer: It depends on your situation.

When Manual/Excel Works

You can absolutely manage certified payroll manually if:

• You have one or two covered projects per year
• Small crew (5-10 workers maximum)
• All workers stay in the same classification
• You’re comfortable with spreadsheets and tracking
• Projects are straightforward (single-state, federal-only)

Download Form WH-347, save it as a PDF you can fill out, or create an Excel template. Many contractors successfully manage this way for years.

When You Need Specialized Software

Consider certified payroll software when:

• You regularly work on multiple covered projects simultaneously
• Larger crews (15+ workers)
• Workers frequently change classifications
• Multi-state operations with different wage laws
• High risk of audit (government contracts are your primary business)
• Your current process creates frequent errors

Types of Solutions

Construction Payroll Software: Full payroll systems like Deltek ComputerEase, Foundation Software, or Sage 300 CRE include certified payroll modules. These handle regular payroll AND certified payroll in one system.

Standalone Certified Payroll Tools: Programs specifically for certified payroll compliance (like LCPtracker or Elmer Davis). These don’t replace your payroll system but make compliance easier.

Payroll Services: ADP, Paychex, and other payroll providers offer certified payroll services. They handle the whole process for you—for a fee.

What to Consider

Cost: Specialized software ranges from $50-$200/month for basic tools to $500-$2,000/month for comprehensive systems. Compare this to the cost of your time and the risk of penalties.

Integration: Does it integrate with your current payroll or accounting software? Manual data entry between systems defeats the purpose.

State Coverage: If you work in multiple states, ensure the software handles all the state-specific requirements you need.

Learning Curve: Factor in training time. The fanciest software is useless if no one on your team knows how to use it.

Support: When you have a question at 4 PM on Friday before a deadline, can you get help?

My recommendation? Start simple. If manual/Excel works for your first project or two, stick with it while you learn the ropes. You can always upgrade later if your volume increases or complexity grows.

State-Specific Considerations: It’s Not One-Size-Fits-All

We’ve talked a lot about federal Davis-Bacon requirements, but state prevailing wage laws can be just as important—and they’re all different.

Top States by Public Works Activity

California: The Most Stringent

California deserves special mention because its requirements are among the strictest in the nation.

Electronic Reporting: You MUST use the Department of Industrial Relations’ electronic certified payroll reporting system. Paper submissions are not accepted (with very limited exceptions).

DIR Registration: Contractors must register with DIR and pay a fee before bidding or working on public works projects.

Monthly Processing: While weekly submission is recommended, records must be processed at least monthly.

Public Access: Certified payroll records become public information. Anyone can request to see them (with some personal information redacted).

Multi-State Projects

What happens when your project crosses state lines or you’re working in multiple states simultaneously?

Follow the stricter requirement. If you’re unsure which law applies:

• Pay the higher prevailing wage
• Follow the longer record retention period
• Submit more frequently if one state requires it
• Use the more detailed form

Better to over-comply than under-comply when dealing with multiple jurisdictions.

How to Research Your State’s Requirements

1. Visit your state’s Department of Labor website
2. Look for “prevailing wage” or “public works” sections
3. Download any state-specific forms or guidance
4. Note submission requirements and deadlines
5. Check if online registration or certification is required
6. Look for wage determination databases

When in doubt, call your state labor department. They’d rather answer questions upfront than audit you later.

Frequently Asked Questions About Certified Payroll

Q: What if I discover an error after I’ve already submitted a certified payroll report?

A: Submit a corrected report immediately. Label it clearly as “CORRECTION” with the original week ending date. Include a cover letter explaining what was wrong and what you’re correcting. Don’t wait—the longer you delay, the worse it looks.

Q: Can I use my regular payroll software like QuickBooks for certified payroll?

A: QuickBooks and similar programs can track the data, but they don’t generate compliant certified payroll reports automatically. You’d need to export data and manually complete Form WH-347. Some add-on modules bridge this gap.

Q: What if a worker refuses to provide their Social Security Number?

A: You can’t employ workers on a covered project without proper identification. The form requires the last four digits of SSN. If they won’t provide it, they can’t work on the project.

Q: Do I need certified payroll for materials suppliers or equipment rental?

A: No. Certified payroll only applies to workers performing actual construction labor on the site. Suppliers, vendors, and purely equipment rental companies aren’t covered.

Q: What about owner-operators of equipment?

A: If they’re operating equipment on the project site, they’re covered. The prevailing wage determination will have classifications for operators (excavator operator, crane operator, etc.).

Q: Can I pay a “loaded rate” instead of separating base wage and fringe benefits?

A: Only if you’re paying the entire amount in cash. The WH-347 still requires you to show it separately in the base wage and fringe benefit columns, even if it’s all paid as wages.

Q: What if the wage determination changes mid-project?

A: Implement the new rates going forward from the effective date. You don’t have to go back and pay the difference for work already performed at the old rate (unless the new determination is marked as “retroactive”).

Q: How long does the government have to audit my certified payroll?

A: Typically within three years of project completion for federal projects, but some state laws allow longer audit periods. This is why record retention is so important.

Q: What if I’m working as a subcontractor and the prime contractor doesn’t require certified payroll?

A: The prime contractor’s mistake doesn’t exempt you. If the project is covered, you must comply regardless of what the prime contractor says. Protect yourself.

Q: Can I get help from the Department of Labor if I’m confused?

A: Yes! The Wage and Hour Division has compliance assistance specialists who will answer questions. They’d rather help you comply than audit you later. Call 1-866-4-USWAGE (1-866-487-9243).

Q: Do Davis-Bacon requirements apply to emergency repair work?

A: Generally yes, unless there’s a specific emergency exemption issued by the contracting agency. Don’t assume—verify before starting work.

Q: What if my workers are union members already covered by a collective bargaining agreement?

A: You still must file certified payroll reports. Union rates often meet or exceed prevailing wages, which makes compliance easier, but reporting is still required.

Preparing for an Audit: What Happens If They Come Knocking

Let’s talk about something nobody wants to think about: certified payroll audits.

What Triggers an Audit?

Audits can be random, but certain red flags increase your chances:

• Worker complaints: The #1 trigger. One call from an underpaid worker starts an investigation.
• Pattern of errors: Frequent late submissions, corrections, or incomplete reports
• Anonymous tips: Sometimes from competing contractors
• Random selection: Government agencies conduct routine audits of a percentage of projects
• “Spot checks”: Quick reviews that can escalate to full audits if issues are found

What Auditors Look For

When an auditor shows up, they’re checking:

1. Worker interviews: They’ll talk to workers on-site about their classifications and pay
2. Wage calculations: Verifying that reported wages match actual payments
3. Time records: Comparing certified payroll to source documents (timesheets)
4. Fringe benefits: Proof that claimed benefits were actually provided
5. Classifications: Whether workers were properly classified
6. Apprentice ratios: If you’re using apprentices, are the ratios correct?
7. Overtime compliance: Proper calculation and payment of overtime

How to Prepare

Before the project even starts:

• Set up organized record-keeping systems
• Train everyone involved in payroll on requirements
• Establish internal review processes
• Keep all supporting documentation together

During the project:

• Submit reports on time, every time
• Fix errors immediately when discovered
• Maintain detailed, contemporaneous records
• Keep correspondence with contracting agencies

If you receive an audit notice:

• Don’t panic
• Gather all project records immediately
• Review everything for accuracy
• Consider consulting with a labor compliance attorney if issues are complex
• Cooperate fully and professionally

What NOT to Do

• Don’t hide or destroy records
• Don’t coach workers on what to say
• Don’t try to quickly “fix” old records
• Don’t be combative or uncooperative with auditors
• Don’t ignore the audit notice hoping it goes away

Auditors have seen every trick. Honesty and cooperation will serve you better than attempted cover-ups.

Your Certified Payroll Action Plan

You’ve made it through the complete guide. Now let’s turn knowledge into action.

For First-Time Filers

This week:

• [ ] Determine if your project requires certified payroll
• [ ] Obtain the applicable wage determination
• [ ] Download Form WH-347 or register for your state’s electronic system
• [ ] Set up a record-keeping system for the project

Before work begins:

• [ ] Review worker classifications against wage determination
• [ ] Verify you’re paying at or above prevailing rates
• [ ] Train whoever will prepare reports on requirements
• [ ] Set calendar reminders for weekly deadlines

First report:

• [ ] Complete Form WH-347 using this guide
• [ ] Have someone else review before signing
• [ ] Submit on time
• [ ] Keep confirmation of submission

For Experienced Contractors

Quarterly:

• [ ] Review your certified payroll process for improvements
• [ ] Check for wage determination updates
• [ ] Audit a sample of your reports for accuracy
• [ ] Update training for payroll staff

Annually:

• [ ] Review state law changes
• [ ] Evaluate whether software could improve your process
• [ ] Ensure record retention systems are working
• [ ] Conduct internal compliance assessment

Resources to Bookmark

• Federal Wage Determinations: Sam.gov/wage-determinations
• Form WH-347: Department of Labor WHD Forms
• Your State Labor Department: Search “[Your State] prevailing wage”

The Bottom Line on Certified Payroll Reporting

Here’s what it all comes down to: certified payroll reporting exists to ensure fair wages on public projects. It’s not meant to be a trap or a bureaucratic nightmare—it’s meant to protect workers and create a level playing field for contractors.

Yes, it adds administrative work to your plate. Yes, the forms can be confusing at first. And yes, the penalties for non-compliance are serious.

But thousands of contractors navigate certified payroll requirements successfully every single week. The key is understanding what’s required, setting up good systems, and staying consistent.

Start with the basics in this guide. Take it one report at a time. Don’t try to cut corners or save a few dollars on wages—it’s never worth the risk. When you’re unsure about something, ask questions before you submit rather than crossing your fingers afterward.

Most importantly, remember that accurate certified payroll reporting isn’t just about avoiding penalties. It’s about building a reputation as a contractor who does things right—the kind of contractor that government agencies want to work with again and again.

That reputation is worth far more than the time you’ll invest in getting certified payroll right.

Ready to get started? Download Form WH-347, pull up the wage determination for your project, and tackle that first report. You’ve got this.