what is certified payroll? - sunburst software solutions · 2015. 6. 18. · certified payroll is a...

© 2009 Nancy Smyth, Certified QuickBooks ProAvisor3rd Edition

What is Certified Payroll?

Provided by:Sunburst Software Solutions, Inc.2378 Dane Hill RoadW. Charleston, VT 05872Phone: (888) 348-2877Fax: (866) 684-5157Email: [email protected]: http://www.sunburstsoftwaresolutions.com

Understanding Davis-Bacon WageRequirements and Certified PayrollReporting

Understanding Davis-Bacon Wage Requirementsand Certified Payroll Reporting

How to deal with the mountain of paperwork if you use(or support clients using) QuickBooks Financial Software.

by Nancy Smyth, Certified QuickBooks ProAvisor

The purpose of this booklet is to help QuickBooks users, as well as Certified QuickBooks ProAdvisors,bookkeepers, CPA's, and Enterprise Solutions Providers who support users of QuickBooks FinancialSoftware to understand the complexities that Contractors who perform work on Federal and/or Statefunded construction contracts face and the payroll reporting mandates that are involved with these projects.

Let me first start by saying that the “Certified Payroll Box 1 Report” available in the QuickBooks PremierContractors Edition nor the instructions contained within the QuickBooks Help file for preparing a certifiedpayroll; will in no way meet the required reporting mandates of Certified Payroll Report submission, as youwill soon see.

This booklet defines the reporting mandates of the US Department of Labor’s WH-347 Certified PayrollReport and WH-348 Statement of Compliance (which are effective until December, 2011), however, please beaware that there are 26 states that have their own specific requirements and/or electronic filing requiremntswhich have all been derived from the original mandates published by the US Department of Labor andreviewed here.

For state specific information visit the website of the states Department of Labor, once there look for theWage & Hours division, and then look for the Prevailing Wage Laws.

For a complete listing of the certified payroll reporting requirements for each state visit http://www.sunburstsoftwaresolutions.com/status-by-state.htm or to view full-sized sample reportsrequired by specific states you may visithttp://www.sunburstsoftwaresolutions.com/certified-payroll-quick-tour.htm

This publication is not about "selling you our software" but rather "helping you to understand the reportingrequirements your clients face and "how" our software can help."

By Sunburst Software Solutions, Inc.

All rights reserved. No parts of this work may be reproduced in any form or by any means - graphic, electronic, or mechanical,including photocopying, recording, taping, or information storage and retrieval systems - without the written permission ofthe publisher, as governed by United States and international copyright laws.

Products that are referred to in this document may be either trademarks and/or registered trademarks of the respectiveowners. The publisher and the author make no claim to these trademarks.

While every precaution has been taken in the preparation of this document, the publisher and the author assume noresponsibility for errors or omissions, or for damages resulting from the use of information contained in this document orfrom the use of programs and/or source code that may accompany it. In no event shall the publisher and the author be liablefor any loss of profit or any other commercial damage caused or alleged to have been caused directly or indirectly by thisdocument.

Printed: April 2009 in West Charleston, VT

3rd Edition

What is Certified Payroll?

© 2009 Nancy Smyth, Certified QuickBooks ProAvisor

What is Certified Payroll?I


Table of Contents

Foreword 1

Part I What is Certified Payroll? 3

................................................................................................................................... 31 Objectives

................................................................................................................................... 42 Definition

................................................................................................................................... 43 Who Makes the Laws and What Are They?

................................................................................................................................... 54 Davis Bacon Regulations

................................................................................................................................... 55 Construction Contract Provisions

................................................................................................................................... 56 Responsibilities of the Principal Contractor

................................................................................................................................... 77 Responsibilities of the Contract Administrator

................................................................................................................................... 88 Section Notes:

Part II How to Comply with Labor Standards &Payroll Reporting Requirements 10

................................................................................................................................... 101 Objectives

................................................................................................................................... 112 The Basics

................................................................................................................................... 123 What Information is on a Wage Determination?

................................................................................................................................... 134 Additional "Trade" Classifications & Wage Rates

................................................................................................................................... 135 Certified Payroll Reports

.......................................................................................................................................................... 13Requirements

.......................................................................................................................................................... 14Payroll Formats

.......................................................................................................................................................... 15Payroll Certification

.......................................................................................................................................................... 16"No Work" Payrolls

.......................................................................................................................................................... 16Payroll Review & Submission

.......................................................................................................................................................... 16Payroll Retention

.......................................................................................................................................................... 16Payroll Inspection

.......................................................................................................................................................... 17Section Notes

................................................................................................................................... 186 Davis-Bacon Definitions

.......................................................................................................................................................... 18Employee

.......................................................................................................................................................... 18Laborer or Mechanic

.......................................................................................................................................................... 18Apprentices & Trainees

.......................................................................................................................................................... 19Prevailing Wages or Wage Rates

.......................................................................................................................................................... 19Fringe Benefits

.......................................................................................................................................................... 19Site of Work

.......................................................................................................................................................... 20Overtime

.......................................................................................................................................................... 20Deductions

.......................................................................................................................................................... 20Proper Designation of Trade or Work Classification

.......................................................................................................................................................... 20Split-Classification

.......................................................................................................................................................... 21Section Notes

Part III Completing a Certified Payroll Report 23

................................................................................................................................... 231 Objectives

................................................................................................................................... 242 Federal vs. State Reporting Requirements

IIContents

II


................................................................................................................................... 253 What Information Has to be Reported on the Certified

Payroll Report?

................................................................................................................................... 264 Certified Payroll Report

................................................................................................................................... 275 Statement of Compliance

................................................................................................................................... 286 What Information Must Be Reported?

.......................................................................................................................................................... 30Project & Contractor Information

.......................................................................................................................................................... 30Employee Information

.......................................................................................................................................................... 30# of Withholding Exemptions

.......................................................................................................................................................... 30Trade or Work Classification

.......................................................................................................................................................... 30Hours Worked, Day & Date

.......................................................................................................................................................... 30Rate of Pay/Cash Fringes

......................................................................................................................................................... 31Fringe Benefit Rate Paid to Union

......................................................................................................................................................... 31Fringe Benefit Rate Paid to Approved Plans

......................................................................................................................................................... 32Fringe Benefit Rate Paid to Employee

......................................................................................................................................................... 32Fringe Benefit Rate Paid to Approved Plans & Employee

......................................................................................................................................................... 33Recap of Effects on Labor Burden

.......................................................................................................................................................... 33Gross Amount Earned - This Job/All Jobs

.......................................................................................................................................................... 34Deductions

.......................................................................................................................................................... 34Net Wages Paid for Week

.......................................................................................................................................................... 34Statement of Compliance

.......................................................................................................................................................... 35Signature

................................................................................................................................... 367 Section Notes

Part IV How Do QuickBooks User's Comply WithReporting Mandates? 38

................................................................................................................................... 381 Objectives

................................................................................................................................... 392 QuickBooks and Certified Payroll

................................................................................................................................... 403 Methods for Creating Certified Payroll Reports &

Statements of Compliance

.......................................................................................................................................................... 41Hand Written

.......................................................................................................................................................... 42Excel Spreadsheets

.......................................................................................................................................................... 43Stand-Alone Software

................................................................................................................................... 444 Payroll Reviews and Corrections

.......................................................................................................................................................... 44Compliance Reviews

................................................................................................................................... 445 Typical Errors and Required Corrections

................................................................................................................................... 456 Restitution for Underpayment of Wages

................................................................................................................................... 477 Other Reporting Requirements

.......................................................................................................................................................... 47Union or Bona-fide Plan Fringe Benefit Reports

.......................................................................................................................................................... 47Union Dues Reports

.......................................................................................................................................................... 47EEOC/Work Utilization Reports

.......................................................................................................................................................... 47The American Recovery & Reinvestment Act of 2009

................................................................................................................................... 488 What Happens When Things Go Wrong?

.......................................................................................................................................................... 48Administrative Review on Labor Standards Disputes

.......................................................................................................................................................... 49Withholding of Payment to the Contractor

.......................................................................................................................................................... 49Deposits & Escrows

.......................................................................................................................................................... 50Debarment

................................................................................................................................... 519 Section Notes

Part V Let's Look at Automation 53

What is Certified Payroll?III


................................................................................................................................... 541 Objectives

................................................................................................................................... 552 What Would Automation Solve?

.......................................................................................................................................................... 56How Would Automation Work?

................................................................................................................................... 573 What QuickBooks Information Is Accessed & How?

.......................................................................................................................................................... 57What "Modifications" Would Be Required to the QuickBooks Data File?

................................................................................................................................... 584 Section Notes

Part VI Frequently Asked Questions 60

................................................................................................................................... 601 How Does Sunburst Work with Advisors, CPA's, etc.?

................................................................................................................................... 602 What are the Top Benefits of Working with a Developer?

................................................................................................................................... 613 What Kind of Training is Involved to Support/Use Your

Software?

................................................................................................................................... 624 What Kind of Training/Marketing Materials Do You

Provide?

................................................................................................................................... 635 What Kind of Support Do You Offer?

................................................................................................................................... 636 There's So Much to Remember...Do You Offer a "Set-Up

Checklist"?

................................................................................................................................... 637 Can You Provide a "List" of Information that My Client & I

Have to Gather?

................................................................................................................................... 638 Where Does All the Information Come From?

................................................................................................................................... 649 What Information Is Always Retrieved from QuickBooks?

................................................................................................................................... 6510 Section Notes

Part VII About Sunburst Software Solutions, Inc. 67

Foreword

In August 2004 the 1st Editon of this document was published under the name of "An Advisors Guide toUnderstandig Davis-Bacon Requirements and Certified Payroll Reporting".

Over the course of the last nearly 9 years (since the inception of Sunburst Software Solutions, Inc. in August 2000)I have worked closely with thousands of QuickBooks end-users as well as QuickBooks ProAdvisors, bookkeepers,and CPA's who support the users of QuickBooks Financial Software.

During this time, two things have become very apparent ......

One is that while QuickBooks end-users may not know how to correctly set-up and use QuickBooks ..... theycertainly know certified payroll reporting requirements.

Secondly, while QuickBooks ProAdviosrs, bookkeepers, and CPA's may know how to use QuickBooks, few knowhow to use QuickBooks in the commercial/government construction industry and even fewer know anything aboutcertified payroll reporting requirements.

I was reminded of this fact when I attended a QuickBooks Conference sponsored by the Sleeter Group. While therewere several "break out sessions" that focused on other industries (Retail & Manufacturing) there was no sessionthat focused on the Construction Industry.

There was, hoever, a very good session on Payroll; which I attended. At the end of the session the presentermentioned "certified payroll", our company, and asked if I was in attendence, and if so - would I please stand up, sopeople could come and talk to me about our software. I did so, and as I stood the presenter stated something to thefact that "Nancy will tell you that certified payroll is easy, however, I just don't understand her software." Severaltimes after that break out session, the presenter made that same statement to me, and again it was reinforced that itwas not the fact that she didn't understand our software ........ but rather the fact that she didn't understand certifiedpayroll reporting requirements and, therefore, how our software would integrate with QuickBooks and solve a hugeproblem for QuickBooks users.

Hopefully, the 3rd edition of this document will explain both.

1Foreword


Understanding certified payroll reporting is "not something that can be taught" -but rather something that you must first understand and then learn.

Part

I

What is Certified Payroll? 3


1 What is Certified Payroll?

1.1 Objectives

Upon finishing this section on "What Is Certified Payroll", you will have gained a basic understandingof:

· What the definition of "Certified Payroll" is· What government agencies make the laws behind certified payroll reporting mandates· What the Davis Bacon Regulations are· What is included in the Construction Contract Provisions· Responsibilities of the Principal Contractor· Responsibilities of the Contract Administrator

What is Certified Payroll?4


1.2 Definition

Certified Payroll is a 2-page set of "specially formatted" payroll reports which must be submitted on aweekly basis by a contractor or subcontractor who is performing work on any type of Federal and/orState Funded construction project with a value in excess of $2,000.00.

"Construction" includes alteration and/or repair, including painting, decorating, plumbing,electrical, HVAC, drywall, etc. of public buildings or public works projects including roads andbridges.

These "specially formatted certified payroll" reports must be submitted weekly beginning with thefirst week that the company works on the project, and for every week thereafter, until they havecompleted work on the project. These reports must be submitted within 5-10 days from the date thatthe payroll checks were issued for a specific week. "No Work" Payrolls must also be submittedwhenever there is a temporary break in the contractors work on the project.

The mandates behind certified payroll reporting are governed at the Federal Level by the Davis-BaconAct, the Contract Work Hours and Safety Standards Act, the Copeland Act, and the Fair LaborStandards Act with additional reporting requirements governed at the State Level, sometimes bymultiple agencies within the same state.

1.3 Who Makes the Laws and What Are They?

The Davis-Bacon Act (DBA) U. S. DOL Reg 29 C.F.R/. Subtitle A, Parts 3 & 5, requires thepayment of prevailing wage rates, which are determined by the U.S. Department of Labor, to alllaborers and mechanics on Federal construction project with a value of $2,000.00 or more.

Construction includes the alteration and/or repair, including painting, decorating, plumbing,electrical, etc., of public buildings or public works.

In addition to the Davis-Bacon Act itself, Congress has added prevailing wage provisions toapproximately 60 statutes which assist construction projects through grants, loan guarantees, andinsurance. These "related Acts" involve construction in such areas as transportation, housing, air andwater pollution reduction, and health.

All projects funded by President Obama's Economic Stimulus Package will require the payment ofprevailing wages and the submission of certified payrolls; even weatherization projects that arefederally funded which have historically been exempt from prevailing wage laws and certified payrollreports.

The Contract Work Hours and Safety Standards Act (CWHSSA) requires that time and one-half pay for *Overtime* (OT) hours worked on the covered project (this does not apply to contractsvalued at $100,000.00 or less).

The CWHSSA applies to Federal Contracts and to indirect Federally-assisted contracts except wherethe assistance is solely in the nature of a loan guarantee or insurance.

*Overtime* is usually defined as working more than 40 hours in any given workweek.

The Copeland Act (Anti-Kickback Act) 40 U.S.C. § 3145 makes it a crime for any employer torequire any laborer or mechanic employed on any Federal or Federally-assisted project to kickbackany part of his or her wages. It also requires every employer (contractor or subcontractor) to submit weekly certified payroll reports.



The Fair Labor Standards Act (FLSA) contains Federal minimum wage rates and overtimerequirements. These requirements generally apply to any labor performed, and that may be pre-empted by other Federal Standards, such as the DBA prevailing wage requirements and CWHSSAovertime provisions.

Only the U.S. Department of Labor has the authority to administer and enforce the FLSA.

1.4 Davis Bacon Regulations

The US Department of Labor has published rules and instructions concerning Davis-Bacon and otherlabor laws on their website in the Code of Federal Regulations (CFR). These regulations can be foundin detail in Title 29 CFR Parts 1, 3, 5, 6, and 7 at http://www.dol.gov/esa/whd/contracts/dbra.htm

Part 1 explains how the DOL establishes and publishes DBA wage determinations and providesinstruction on how to use the determinations.

Part 3 describes Copeland Act requirements for payroll deductions and the submission ofweekly-certified payroll reports.

Part 5 covers the labor standards provisions that are in the contract relating to the Davis-Bacon Actwage rates and the responsibilities of contractors and contracting agencies to administer and enforcethe provisions.

Part 6 provides the administrative proceedings enforcing Federal labor standards on constructionand service contracts.

Part 7 sets parameters for practice before the Wage Appeals Board (Administrative Review Board).These regulations are used as the basis for administering and enforcing the laws.

1.5 Construction Contract Provisions

Each contract that is subject to Federal (Davis Bacon) labor standards requirements must containcontract provisions containing labor standards clauses and a Davis-Bacon Wage decision. This alsoapplies to State funded construction projects. These documents are normally bound into the contractspecifications or contract.

The labor standards clauses describe the responsibilities of the contractor concerningDavis-Bacon Wages and obligate the contractor to comply with the labor requirements. This clausealso provides for remedies in the event of violations, including withholding from payments due to thecontractor to ensure the payment of wages or liquidated damages, which may be found due. Theseclauses enable the contract administrator to enforce the Federal labor standards applicable to theproject.

Davis-Bacon Wage Decisions provides a listing of various construction work classificationssuch as Carpenter, Plumber, Electrician and the minimum wage rates and fringe benefits (whereprevailing) that employees performing work in those classifications must be paid.

1.6 Responsibilities of the Principal Contractor

The principal contractor, also referred to as the prime or general contractor, is responsible for thefull compliance of all employers (the contractor, subcontractors and any lower-tier subcontractors)with the labor standards provisions applicable to the project.

Because of the contractual relationship between a prime contractor and his/her subcontractors,

12



questions to, from, or about subcontractors should always be channeled through the prime contractor.



1.7 Responsibilities of the Contract Administrator

The contract administrator is responsible for the proper administration and enforcement of theFederal labor standards provisions on the contracts covered by Davis-Bacon requirements.

The administrator will provide labor standards, pre-construction advice, and support to the contractorand other project principals (owner, sponsor, architect). This includes providing the correctDavis-Bacon wage decision and ensuring that the wage decision and contract clauses are incorporatedinto the contract for construction.

The contract administrator also monitors labor standards compliance by conducting interviews withconstruction workers at the job site, and reviewing payroll reports, and oversees any enforcementactions that may be required.

The Department of Labor (DOL) also has a role in monitoring Davis-Bacon administration andenforcement. A DOL investigator or other representative may visit the construction site and interviewworkers or review payroll information.



1.8 Section Notes:

Part

II



2 How to Comply with Labor Standards & PayrollReporting Requirements

2.1 Objectives

Upon finishing this section on "How to Comply with Labor Standards & Payroll ReportingRequirements", you will have gained a basic understanding of:

· The basic function of the Wage Decision· What information the Wage Decision contains and why it is so vital· Requesting Additional "Trade" Classifications & Wage Rates· Basic requirements for Certified Payroll Reports· Different Payroll formats· What a "No Work" Payroll is· Payroll Reviews & Submissions· Payroll Retention requirements· Payroll Inspection· Davis-Bacon Definitions

How to Comply with Labor Standards & Payroll Reporting Requirements 11


2.2 The Basics

There are two main types of wage decisions or determinations - a General Wage Decision and aProject Wage Decision.

· A General Wage Decision reflects the rates determined to be prevailing in a specificgeographic area for the type of construction described - building, heavy, highway, or residential,and are updated annually.

· A Project Wage Decision is issued at the request of a contracting agency; is applicable onlyto a specific project, and usually expires 180 days from the date of issuance, unless an extensionis requested by the agency and approved by the Wage and Hour Division.

The Wage Decision - Davis-Bacon labor standards stipulate the wage payment requirements forCarpenters, Electricians, Plumbers, Roofers, Laborers and other construction work classifications, which the Administrator of the Wage and Hour Division of the U.S. Department of Labor asdetermined to be the prevailing in a given area for a particular type of construction; e.g. building,heavy, highway, or residential, that may be needed for the project.

The Davis-Bacon wage decision that applies to the project contains a schedule of work classificationsand wage rates that must be followed.

· Work Classifications & Pay Rates – a Davis-Bacon Wage Decision is simply a listing ofdifferent work classifications and the minimum wage rates that must be paid to anyoneperforming work in those classifications. Make sure that the work classifications you need arecontained in the Wage Decision and make certain you know exactly what wage rates you willneed to pay. Some Wage Decisions cover several counties and/or types of construction work(residential and commercial) and can be difficult to read. Many times the contractadministrator may prepare a Project Wage Rate Sheet, which will show only the classifications,and wage rates, for a particular project.

· Posting the Wage Decision – The prime contractor is responsible for posting a copy of theWage Decision or Project Wage Rate sheet, and a copy of a DOL poster called “Notice toEmployees” at the job site, in a place that is easily accessible to all construction workersemployed at the project, and where the wage decision and poster won’t be destroyed by wind,rain, etc.

Wage Rates consist of both a base hourly rate of pay plus an additional hourly "fringe" rate.

Notices are published weekly in the Federal Register to advise the public of the publication ofgeneral wage decisions/determinations, modifications, supersedes actions, withdrawal actions, andcorrections affecting wage determinations.



2.3 What Information is on a Wage Determination?

Below is a portion of a Prevailing Wage Determination:

GENERAL DECISION: VT20080037 02/08/2008 VT37

Date: February 8, 2008General Decision Number: VT20080037 02/08/2008

Superseded General Decision Number: VT20070038

State: Vermont

Construction Type: Highway

County: Windsor County in Vermont.

HIGHWAY CONSTRUCTION PROJECTS (excluding tunnels, building structures in rest areas;railroad construction; bascule, suspension & spandrel arch bridges; bridges designed for commercialnavigation; bridges involving marine construction; other major bridges)

Modification Number Publication Date 0 02/08/2008 *SUVT2005-021 09/01/2005

The information shown below regarding Work/Trade Classifications, Pay Rates,and Fringes is the most important piece of information that you will find in thePrevailing Wage Determination! This information will help you to determine what you should be paying your employees who fallinto the various classifications.

Work/Trade Classification Rates Fringes Notes:In the sample Wage Determinationshown to the left, Laborers isconsidered to be the "main or parent"Trade or Work Classification, while Blaster, demolition and ConcreteWorker are considered to be sub-classifications.

For certified payroll reportingpurposes the sub-classificationswould be required to be the onesshown on the final reports.

For EEOC reporting purposes, employee counts would fall under the parent classification.

Carpenter (includes form work) $13.21Ironworker, reinforcing $13.29 $ .52Ironworker, structural $21.15 $15.54Laborers: Blaster, demolition $20.38 $ 2.60 Concrete Worker $12.64 Driller $14.50 $ 2.60 Flagger $ 11.15 $ 4.40 Guard rail installer $ 9.88 Highway line striping $14.38 Landscape laborer $10.19 $ 1.03 Sign installer $11.70 $ 4.26 Unskilled $12.01Power Equipment Operators Auger $15.16 Backhoe $15.54 Broom $14.50 $ 3.72 Bulldozer $16.22 $ 3.35 Cold planer $16.20 Crane $17.58 $ 2.63

How contractors pay the prevailing wage "fringe" portion has a direct impact on their labor costs andcan effect their overall job profitability. For additional information, see Paying Prevailing Wage

http://www.sunburstsoftwaresolutions.com/view-document-details/paying-prevailing-wage-fringe-benefits-4-common-methods.htm



Fringe Benefits - 4 Common Methods

2.4 Additional "Trade" Classifications & Wage Rates

If the work classifications that you need do not appear on the Wage Decision or Project Wage Sheet,you will need to request an additional classification and wage rate. This process is usually very simple,but it has different rules for contractors and subcontractors.

As the contractor, you will start with a written request to the contract administrator and identifythe work classification that is missing and recommend a wage rate (usually the same rate that you arepaying on similar projects) and a description of the actual work that the new classification will beperforming. If the classification was missing, the contract administrator will make the correction andissue a revised Project Wage Sheet. If the classification was not included on the original DOL wagedecision, the administrator will make the request for the addition of the requested work classificationand rate of pay to the DOL. The DOL will either approve the request and issue a reviseddetermination, or if the request is rejected, the contract administrator will be notified of what workclassification and wage rate should be used.

As a subcontractor, you will start with a written request to the prime contractor, identifying thework classification that is missing, recommend a wage rate and provide a description of the actualwork that the work classification will be performing. The prime contractor will notify the contractadministrator. And, if necessary, the contract administrator will make the request to the DOL for theinclusion of the request work classification and rate of pay.

2.5 Certified Payroll Reports

2.5.1 Requirements

A contractor or subcontractor performing work on these types of construction projects are required tosubmit a weekly certified payroll report beginning with the first week that the company works on theproject and for every week thereafter until they have completed work on the project. Payroll reportsshould be numbered beginning with payroll #1 and the last report for the project should be clearlymarked as “Final”.

Additionally, "No Work Performed Payrolls" must be submitted whenever there is a temporarybreak in the contractors work on the project.




2.5.2 Payroll Formats

For fully Federal funded projects, submit the US DOL Form WH-347: Certified Payroll Report andForm WH-348: Statement of Compliance. For fully State funded projects, you will probably berequired to submit a State mandated report. The contract will specify if you are required to submit theFederal or State specific reporting format.

Out of the 50 states, only 25 follow fully the Federal Reporting Requirements. The other half havetheir own State Prevailing Wage Laws, derived from the Federal requirements; they have developedtheir own Certified Payroll Reporting formats. Some states have multiple agencies and multiple formsthat must be submitted and/or electronic filing requirements.

If a contractor files an incorrect reporting format, it could mean that he will not be paid. This applies "mainly" to states that have their own reporting format; however, it is not unheard of that a generalcontractor will "reject" a payroll format and, therefore, delay payment to the subcontractor.

Interested in seeing what the reporting format is for the state that you reside in? Visit our website http://www.sunburstsoftwaresolutions.com/certified-payroll-quick-tour.htm

http://www.sunburstsoftwaresolutions.com/certified-payroll-quick-tour.htm



2.5.3 Payroll Certification

The weekly payrolls are called certified because each payroll is signed and contains languagecertifying that the information is true and correct. The payroll certification language is either on thereverse side of the report, or on a separate sheet, and is commonly known as a Statement ofCompliance.

Like the actual certified payroll report, the information required on the Statement of Compliance canvary, however, whether it's called a Statement of Compliance, a Payroll Affirmation, or a PayrollCertification - they all require the original signature of a company official to fulfill the "certification".



2.5.4 "No Work" Payrolls

"No Work" Payrolls should be submitted whenever there is a temporary break for contractors whowork on the project, and in most instances, the payrolls should be numbered consecutively.

If the contractor knows that he will not be on the project for an extended period of time, he shouldinform the prime contractor in writing to let them know about the break in work, and give anapproximate return date. Sometimes if a written note is given, the contractor will not have to file the“No Work” payrolls.

2.5.5 Payroll Review & Submission

The prime contractor should review each subcontractor’s payroll reports for compliance prior tosubmitting the reports to the contract administrator.

Remember, the prime contractor is responsible for the full compliance of all subcontractors on thecontract and will be held accountable for any wage restitution that may be found, due to any laboreror mechanic that is underpaid, and for any liquidated damages that may be assessed for overtimeviolations.

All of the payroll reports for any project must be submitted to the contract administrator through theprime contractor.

2.5.6 Payroll Retention

Every contractor and subcontractor must keep a complete set of their own payrolls and other basicrecords, such as time cards, for a Davis-Bacon project, for at least 3 years after the project iscompleted.

The prime contractor must keep a complete set of all of the payrolls from every contractor andsubcontractor, for at least 3 years after completion of the project.

2.5.7 Payroll Inspection

In addition to submitting payrolls to the contract administrator, every contractor and subcontractormust make their own copy of the payrolls available for review or copying to any authorizedrepresentative of the DOL.



2.5.8 Section Notes



2.6 Davis-Bacon Definitions

2.6.1 Employee

Every person who performs the work of a laborer or mechanic is “employed”, regardless of anycontractual relationship which may be alleged to exist, between a contractor or subcontractor, andsuch person.

This means that even if there is a contract between a contractor and a worker, the contractor mustmake sure that the worker is paid at least as much as the wage rate on the wage decision for theclassification of work they perform.

2.6.2 Laborer or Mechanic

A Laborer or Mechanic is anyone who is performing work on the project, including trade journeymen(carpenters, plumbers, sheet metal workers, etc.) apprentices, trainees, and for CWHSSA purposes,watchmen and guards. These groups must not be paid less than Davis-Bacon wage rates.

· Working foremen – foremen or supervisors that regularly spend more than 20% of their timeperforming construction work are covered “laborers or mechanics” for labor standardspurposes.

· Exclusions – people whose duties are primarily administrative, managerial or clerical, are notlaborers or mechanics. For example: office staff, timekeepers, messengers, etc.

2.6.3 Apprentices & Trainees

Apprentices and Trainees are the only workers who can be paid less than the wage rate on the wagedecisions for their work classification, they must be registered in an approvedapprenticeship or training program.

An approved program is one that has been registered with the DOL Bureau of Apprenticeship andTraining (BAT), or with a BAT-recognized State Apprenticeship Agency (SAC). Apprentices andtrainees are paid wage rates in accordance with the wage schedule in the approved program.

Most often, the apprentice/trainee wage rate is expressed as a series of percentages tied to theamount of time spent in the program. For example:

0-6 months=65%6-12 months=70%.

The percentage is applied to the journeyman’s wage rate for that particular craft. For example:If an Electrician is to be paid $22.00 an hour, a 65% Apprentice would be paid $14.30 per

hour.

Types of Apprentices & Trainees:· Probationary apprentice can be paid as an apprentice, if the BAT or SAC has certified that

the person is eligible for probationary employment as an apprentice.· Pre-apprentice is someone who is not registered in a program, and that has not been

BAT-or-SAC-certified for probationary apprenticeship, and cannot be considered an“apprentice”, and must be paid the full rate on the wage decision for the classification of workthey perform.

· Ratio of apprentices and trainees to journeymen – the maximum number ofapprentices or trainees that you can use on the job site cannot be more than the ratio ofapprentices or trainees to the journeymen allowed in the approved program.



2.6.4 Prevailing Wages or Wage Rates

Prevailing wages or wage rates are the rates of pay listed on the wage decision for the project.

The wage decision will list a minimum basic hourly rate of pay for each work classification, known asthe base rate.

Some wage decisions include fringe benefits, which are usually listed as an hourly fringe rate.

If the wage decision includes a fringe benefit rate for a classification, you will need to add the fringebenefit rate to the basic hourly rate, unless you provide bona fide fringe benefits for your employees,or you are a member of a Union.

2.6.5 Fringe Benefits

Fringe Benefits can include health insurance, retirement, life insurance, vacation, and somecontributions to training funds – but they must be made to “approved” plans or the Union.

Fringe benefits do not include employer contributions to Social Security, or some disabilityinsurance payments, or any that is required by another Federal, State, or Local agency.

Examples of benefits which might be offered under a bona fide benefit plan are retirement accounts(401(k) or pensions), medical insurance, vision insurance, dental insurance, and life insurance.

Only a few states will allow company contributions to employee health insurance to count toward thehourly Fringe Benefit rate on prevailing wage jobs.

Under law, in order for a plan to be "bona fide", it must meet with the approval of:· the U.S. Department of Labor· the IRS· the State Department of Labor

and the plan is subject to additional stipulations, such as:· Contractors can take prevailing wage credit, without prior Department of Labor approval, for

fringe benefit contributions to third-party trusts and plans.· The amount of contributions for fringe benefits must be paid to a trustee or third party

irrevocably.· Contributions to fringe benefit plans must be made regularly, not less often than quarterly.· While profit-sharing plans are deemed bona fide within the meaning of the Act, profits are not

determined until the end of the year. Therefore, the Department of Labor requires contractorsto escrow money, at least quarterly, on the basis of what the profit is expected to be.

· A pension plan that meets the ERISA requirements may be considered bona fide for thepurposes of the Davis-Bacon Act.

· Credit may not be taken for fringe benefit contributions made on behalf of employees who arenot eligible to participate in the plan.

If in doubt, contact the U.S. Department of Labor and/or the State Department of Labor, explain your"plan", and ask if it meets the requirements of a bona fide fringe benefit plan.

How contractors pay the prevailing wage "fringe" portion has a direct impact on their labor costs andcan effect their overall job profitability. For additional information, see Paying Prevailing WageFringe Benefits - 4 Common Methods

2.6.6 Site of Work

The site of work is where the Davis-Bacon wage rates apply.

Usually, this is the boundary of the project of a fabrication site - in other words - "the physical





location of the project".

2.6.7 Overtime

Overtime is defined as all hours worked on the site of the work in excess of 40 hours in any workweek,this is assuming that any given employee only works on one specific jobsite.

Overtime hours must be paid at no less than one and one half times the regular rate of basic pay, plusthe straight-time rate of any required fringe benefits – unless fringe benefits are paid to a bona fideplan or a Union.

2.6.8 Deductions

Employers may make standard payroll deductions (FWH, FICA, MCARE, State Withholding,insurance, retirements, savings accounts, judgments, child support, etc.) as permitted by DOLRegulations 29 CFR Part 3. These regulations prohibit the employer from requiring employees to“kick-back” any of their earnings.

2.6.9 Proper Designation of Trade or Work Classification

A trade or work classification shown on the wage decision or project wage sheet must be selected foreach worker based on the actual type of work he/she performed, and you must pay each worker noless than the wage rate shown, regardless of what you, as the contractor, feel their level ofskill is.

An example is, someone is performing carpentry work on the project, they must be paid no less thanthe wage rate shown on the wage decision, even if they are not considered by you to be fully trained asa Carpenter.

Remember, the only people who can be paid less than the wage rate for their classification isapprentices and trainees registered in approved programs.

2.6.10 Split-Classification

If you have employees that perform work in more than one classification (a Laborer in the morningand an Equipment Operator in the afternoon), you can pay the wage rates specified for eachclassification only if they maintain accurate time records showing the amount of time spent in eachclassification of work.

If accurate time records are not maintained, you must pay these employees the highest wage rate of allthe classifications of work performed on that day or during that week.

In the event of an employee working "split classifications", that employee must be shown on thecertified payroll report once under each work or trade classification, with the number of hours workedfor each specific classification, and applicable rate of pay.



2.6.11 Section Notes

Part

III

Completing a Certified Payroll Report 23


3 Completing a Certified Payroll Report

3.1 Objectives

Upon finishing this section on "Completing a Certified Payroll Report", you will have gained a basicunderstanding of:

· What information has to be reported on the Certified Payroll Report· Reporting formats range from simple to complex and can vary by state· The specifics that must be reported for:

· Project & Contractor Information· Employee Information· # of Withholding Exemptions· Trade or Work Classifications· Hours Worked, Day & Date· How to Report Rate of Pay and Fringe Benefits· Gross Amount Earned - This Job/All Jobs· Deductions· Net Wages Paid for Week· Statement of Compliance· Signature

The U.S. Department of Labor (DOL) estimates that it will take 1 hour to gather the data required tocomplete a single Certified Payroll report and Statement of Compliance listing 8 employees.

While this may not seem like a "big deal" if you are only working on a single job and have less than 8employees, think of what will happen when you work on more than one job and have more than 8employees.



3.2 Federal vs. State Reporting Requirements

Your contract document package, even at the bid stage, will include the reporting form that you arerequired to submit for that specific job.

Jobs that are typically fully funded by Federal dollars will require the submission of the U.S.Department of Labor WH-347 Form.

Jobs that are fully funded with State dollars will usually require the submission of a State specificcertified payroll report.

The following states follow ONLY the reporting requirements of the U.S. Department of Labor and filethe WH-347 and WH-348 forms: Arizona, Arkansas, Florida, Georgia, Hawaii, Idaho, Indiana,Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Montana, Nebraska, New Hampshire,Oklahoma, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, and Wyoming.

Alabama, Connecticut, Delaware, Iowa, Kentucky, Missouri, Mississippi, North Carolina, NorthDakota, Ohio, Oregon, Rhode Island, South Dakota, and Washington all have a specific state agencywhich will administer State Prevailing Wage Laws; in addition to the Federal requirements.

Alaska, California, Colorado, Illinois, Massachusetts, Nevada, New Jersey, New York, New Mexico,Pennsylvania, and Wisconsin have multiple state agencies that provide and monitor various prevailingwage laws that apply specifically to the governing agency, and these states also have "electronic"certified payroll reporting requirements; where a contractor must submit an "electronic" certifiedpayroll report to a Labor Compliance Agency, in addition to paper filing requirements and Federalrequirements.

To find out more about the prevailing wage laws for your state, visit your Department of Labor and/orDepartment of Transportation website, and search for "Prevailing wage" or "certified payroll". Insome instances, there will not be much information, other than a form, and perhaps someinstructions for completing that form.



3.3 What Information Has to be Reported on the CertifiedPayroll Report?

The weekly certified payroll form does not ask for any information that you do not already need tokeep for wage payment and tax purposes and information that is provided in the project contract.For most contractors, the weekly certified payroll report is all the paperwork that is required for aDavis-Bacon Project.

You will need to know:· Each employee’s name, and the last 4 digits of their social security number (who is

working for you)· His or her Trade or Work Classification (what they do)· The number of hours worked each day during the week on individual projects or jobs (where

they worked during the week and how many total hours they worked)· His or her prevailing rate of pay for the trade/work classification (how much you pay

them for the work they perform)· The gross amount earned (how much did you pay each employee that week for each job and

for all jobs they worked on)· The amounts of any deductions for taxes, etc.· The net amount paid (how much was the paycheck made out for?)

Sounds simple, right? Let's look at what a Certified Payroll Report and a Statement of Compliancelook like and see what else has to be reported on the them.



3.4 Certified Payroll Report

The information and layout of a certified payroll report can range from simple, such as the WH-347.....

View a full-sized .pdfby clickinghere.....

to complex, such as the "Audit Friendly" version of the California Department of Industrial RelationsA-1-131 form developed by CaLlcp, a Labor Compliance company.

View a full-sizedsample .pdf by clickinghere......

http://www.sunburstsoftwaresolutions.com/download-document/u.s.-department-of-labor-wh-347-certified-payroll-report.htm

http://www.sunburstsoftwaresolutions.com/download-document/u.s.-department-of-labor-wh-347-certified-payroll-report.htm

http://www.sunburstsoftwaresolutions.com/download-document/callcp-audit-friendly-report.htm

http://www.sunburstsoftwaresolutions.com/download-document/callcp-audit-friendly-report.htm



3.5 Statement of Compliance

Like the actual certified payroll report, the information and layout of a Statement of Compliance canrange from simple........

View a full-sizedsample .pdf by clicking here....

to complex, such as the Washington Payroll Affirmation.

View a full-sizedsample .pdf by clickinghere....

http://www.sunburstsoftwaresolutions.com/download-document/u.s.-department-of-labor-wh-348-statement-of-compliance.htm

http://www.sunburstsoftwaresolutions.com/download-document/washington-statement-of-compliance.htm

http://www.sunburstsoftwaresolutions.com/download-document/washington-statement-of-compliance.htm



3.6 What Information Must Be Reported?

For purposes of this training document, we will be discussing the requirements of the U.S. DOL(Federal) WH-347 and WH-348. The reporting requirements that we will be discussing are effectiveuntil December, 2011.

Print the next page to help you identify the areas that we will be discussing and what informationneeds to go in each section.



3.6.1 Project & Contractor Information

Each certified payroll has to show:· If your company is the contractor or a subcontractor on the project· Provide your company name and address· The Project Name, identifying Federal and/or State Project number, and Location· The payroll week ending date· The payroll number

This information is shown in the reports "header."

3.6.2 Employee Information

Each payroll must contain the name, and last 4-digits of the employee's Social Security Number, ofevery employee who worked on that project. This information is displayed in column 1 of the report.

3.6.3 # of Withholding Exemptions

The total number of Federal Withholding Exemptions that the employee claims must be entered incolumn 2 of the report.

3.6.4 Trade or Work Classification

Each employee must be classified in accordance with the Wage Decision based on the type of workthey actually performed.

· Apprentices or Trainees – the first payroll on which any apprentice or trainee appears mustbe accompanied by a copy of that apprentice or trainee’s registration in an approved program.A copy of the portions of the approved program pertaining to the wage rages and rations shall,also, accompany the first certified payroll report on which the first apprentice or traineeappears.

· Split-Classifications - for employees in split classifications (work as a Laborer in the morningand an Equipment Operator in the afternoon), listing the employee once for each classification,distributing the hours worked according to the classification, reflecting the rate of pay and grossearnings, for each classification.

The Trade/Work Classification is entered in column 3 of the report.

3.6.5 Hours Worked, Day & Date

The certified payroll report for the project should only show the regular/straight time and overtimehours, worked on this project, broken down:

· first by number of hours worked each day· what the day's date was· then showing total hours for the week on this project

This information is displayed in column 4 of the report, which looks like a "weekly calendar".

3.6.6 Rate of Pay/Cash Fringes

This section has entirely separate reporting requirements which depend upon whether you are a:· "Union Contractor" paying the Fringe Benefit portion to the Union on the employee's behalf· "Non-Union" Contractor paying the Fringe Benefit portion to the employee in cash, as part of

gross wages· "Non-Union" Contractor paying all of the Fringe Benefit portion to an "approved plan"· "Non-Union" Contractor paying part of the Fringe Benefit portion to an "approved plan" and

the balance to the employee in cash, as part of gross wages.

Throughout the next four examples, we will work under the assumption that the Wage Decision states



that employees classified as Flaggers will be paid a base rate of $11.15 per hour with a fringebenefit rate of $4.40 per hour.

This information is displayed in column 6 of the report, and the column header is very misleading asit's title is Rate of Pay, so one would assume that you only enter the base rate from the WageDetermination. This however, is not always the case.

How contractors pay the prevailing wage "fringe" portion has a direct impact on their labor costs andcan effect their overall job profitability. We'll cover this briefly in the examples, however, foradditional information, see Paying Prevailing Wage Fringe Benefits - 4 Common Methods.

3.6.6.1 Fringe Benefit Rate Paid to Union

Contractors paying all required fringe benefits to the Union on the employees behalf. Ifyou pay all required fringe benefits to approved plans, funds , or programs in amounts not less thanstated in the wage decision associated with the contract ($5.00 per hour for each hour worked, youare required to only report the base rate of pay for Straight Time and Over Time and should beshown as $11.15 and $16.90 ($11.15 + 5.75) on the Certified Payroll Report.

On the Statement of Compliance, it is required that you check box 4 (a):

WHERE FRINGE BENEFITS ARE PAID TO APPROVED PLANS, FUNDS, OR PROGRAMSIn addition to the basic hourly wage rates paid to each laborer or mechanic listed in the abovereferenced payroll, payments of fringe benefits, as listed in the contract, have been or will bemade to appropriate programs for the benefit of such employees, except as noted in Section 4 (c).

The $4.40 in fringes are treated as company contributions.

· If applicable, each specific fringe benefit should be set up as an individual companycontribution.

· As a general rule, fringes are not subject to payroll taxes, workers compensation premiumcalculations, or General Liability insurance premium calculations.

· Fringes should be job costed. · Fringes should be included in labor burden calculations when bidding jobs.

Some unions, however, will treat some fringes as "taxable", such as a vacation fringe. Always contactthe Union Hall to determine the taxability of each fringe benefit specified.

3.6.6.2 Fringe Benefit Rate Paid to Approved Plans

Contractors paying all required fringe benefits to an "approved plan" on the employeesbehalf. If you pay all required fringe benefits to approved plans, funds, or programs in amounts notless than stated in the wage decision associated with the contract ($5.00 per hour for each hourworked), you are required to only report the base rate of pay for Straight Time and Over Timeand should be shown as $11.15 and $16.90.

Refer to Section 2.5.5 for the definition of an "approved plan".



19




The $4.40 in fringes are treated as company contributions.

· If applicable, each specific fringe benefit should be set up as an individual companycontribution.

· As a general rule, fringes are not subject to payroll taxes, workers compensation premiumcalculations, or General Liability insurance premium calculations.

· Fringes should be job costed. · Fringes should be included in labor burden calculations when bidding jobs.

This gives the non-union contractor a more even bidding field when bidding against UnionContractors.

3.6.6.3 Fringe Benefit Rate Paid to Employee

Contractors paying Fringe Benefits in cash to employees. You would report the actual baserate of pay PLUS the Fringe Benefit rate per hour as stated in the wage decision associated with thecontract that are paid directly to the employee. For example, you would report Straight Time earningsas $11.15/$4.40. For Over Time earnings, you are required to pay not less than the sum of the baserate, plus the half time premium on the base rate, plus the benefit rate for straight time, and shouldbe reported as $16.90/$4.40.

When the Fringe Benefit Rate is paid directly to the employee, it is subject to all applicable payrolltaxes, worker's compensation insurance, and general liability insurance (if your General Liabilityinsurance is based on gross payroll instead of gross sales).

On the Statement of Compliance, it is required that you check box 4 (b):

WHERE FRINGE BENEFITS ARE PAID IN CASHEach laborer or mechanic listed in the above referenced payroll has been paid, as indicated on thepayroll, an amount not less than the sum of the applicable basic hourly wage rate plus the amountof the required fringe benefits, as listed in the contract, except as noted in Section 4 (c) below.

The $4.40 in fringes are paid directly to the employee as part of gross hourly wages.

· Fringes paid in cash ARE subject to payroll taxes, workers compensation premium calculations,or General Liability insurance premium calculations.

· Fringes should be included in job costing.· Higher labor burden than their Union counterparts. · Fringes should be included in labor burden calculations when bidding jobs.

This causes higher bids to compensate for higher labor costs and less profit for the contractor whenbidding against Union Contractors.

3.6.6.4 Fringe Benefit Rate Paid to Approved Plans & Employee

Contractors paying part of the Fringe Benefit portion to an "approved plan" and thebalance to the employee in cash, as part of gross wages. If you pay a portion of the requiredfringe benefits to approved plans, funds, or programs in amounts less than stated in the wagedecision associated with the contract ($1.00 per hour for each hour worked), you are required to report the base rate of pay plus the amount paid in cash to the employee for StraightTime and Over Time and should be shown as $11.15/$3.40 and $16.90/$3.40

Whenever any portion of the Fringe Benefit Rate is paid directly to the employee, it is subject to allapplicable payroll taxes, worker's compensation insurance, and general liability insurance (if yourGeneral Liability insurance is based on gross payroll instead of gross sales).



Refer to Section 2.5.5 for the definition of an "approved plan".



and box 4 (b):

WHERE FRINGE BENEFITS ARE PAID IN CASHEach laborer or mechanic listed in the above referenced payroll has been paid, as indicated on thepayroll, an amount not less than the sum of the applicable basic hourly wage rate, plus theamount of the required fringe benefits, as listed in the contract, except as noted in Section 4 (c)below.

Your company might be able to take a credit for contributions it makes to healthinsurance and pension plans for each employee.

· Approved/bona-fide plan contributions should be tracked as individual company contributions.· CASH fringes ARE subject to payroll taxes, Workers Compensation Insurance premium

calculations, and General Liability Insurance premium calculations.· Contributions should be job costed.· Both the contribution and the cash portion of the fringe should be included in labor burden

calculations when bidding jobs.· Higher labor burden than their Union counterparts BUT lower labor burden than contractors

paying the entire fringe in CASH to the employee.

This results in higher bids than their union counterparts to compensate for higher labor costs BUTlower bids than contractors paying the entire fringe in CASH to the employee.

3.6.6.5 Recap of Effects on Labor Burden

Here, we will take a quick look at how contractors pay the fringe benefit portion of prevailing wageeffects their labor costs and labor burden.

Fringes Paid To: Straight TimeRate of Pay

Overtime Rate of Pay

Union, Approved Plans, or bona-fide plans $11.15 $16.90In Cash to the Employee $15.55 $21.30Combination of Cash and Approved or bona-fide plans

$14.55 $20.30

As you can see, how a contractor ultimately pays the Fringe Benefit portion of the Prevailing Wagehas a big impact on his labor costs.

3.6.7 Gross Amount Earned - This Job/All Jobs

You would report the gross amount earned on this job. If part of the employees total weekly wage wasearned on projects other than the project described on this payroll, you are required to report grosswages on this project, and then gross wages on all projects, thus $60.00/$120.00; meaning $60.00this project/$120.00 all projects.

This information is displayed in column 7, which is once again very misleading as the column title is"Gross Amount Earned."

19



3.6.8 Deductions

There are a total of 5 columns for reporting deductions. Deductions that are classified as "OtherWithholding" require a coded explanation of the type of Other Withholding, for example, ChildSupport, Union Dues, Health Insurance deduction, etc. Deductions are based on the gross wages forall projects. Total Deductions from gross pay must be reported in the Total Deductions column.

Deductions are listed in column 8 of the report, and the Deduction Key Code must be displayed at thebottom of the report.

All deductions must be in accordance with the provisions of the Copeland Act Regulations, 29 CFR,Part 3.

3.6.9 Net Wages Paid for Week

You are required to report the employees Net Wages for the week, and this amount must agree withwhat he actually takes home as shown on his or her paycheck, this is the total of Gross Wages AllProjects minus Total Deductions.

Net wages are displayed in column 9 of the report.

3.6.10 Statement of Compliance

The Statement of Compliance is the certification.

Print the next page in order to identify the location of the information required.



Identifying information located at the top of the Statement of Compliance include the name and titleof the person who will be signing (certifying the information), the company name submitting thepayroll, the project name, the pay period, and an "explanation" of deductions, is required in the blankspace above part 2.

Parts 4 (a), (b), and (c), also must be completed.

Part 4 (a) WHERE FRINGE BENEFITS ARE PAID TO APPROVED PLANS, FUNDS, OR PROGRAMSIn addition to the basic hourly wage rates paid to each laborer or mechanic listed in the abovereferenced payroll, payments of fringe benefits, as listed in the contract, have been or will bemade to appropriate programs for the benefit of such employees, except as noted in Section 4 (c).

Part 4 (b) WHERE FRINGE BENEFITS ARE PAID IN CASHEach laborer or mechanic listed in the above referenced payroll has been paid, as indicated on thepayroll, an amount not less than the sum of the applicable basic hourly wage rate, plus theamount of the required fringe benefits, as listed in the contract, except as noted in Section 4 (c)below.

Part 4 (c) EXCEPTIONSThis section is used to note any exceptions by Work Classification (Trade) and to provide anexplanation for the exception.

3.6.11 Signature

The Statement of Compliance must be signed with an original signature of a principal of the company(owner, President, Treasurer or Payroll Administrator, or by an authorized agent.

This original signature "certifies" that the person signing the Statement of Compliance understandsthat this signature is subject to "Penalty of Perjury" and that THE WILLFUL FALSIFICATION OFANY OF THE ABOVE STATEMENTS MAY SUBJECT THE CONTRACTOR OR SUBCONTRACTORTO CIVIL OR CRIMINAL PROSECUTION. SEE SECTION 1001 OF TITLE 31 OF THE UNITEDSTATES CODE.



3.7 Section Notes

Part

IV



4 How Do QuickBooks User's Comply With ReportingMandates?

4.1 Objectives

Upon finishing this section on "Completing a Certified Payroll Report", you will have gained a basicunderstanding of:

· How QuickBooks user's are currently creating certified payroll reports using manual methods· How QuickBooks user's are currently creating certified payroll reports using semi-automated

methods· How QuickBooks user's are currently creating certified payroll reports using stand-alone

programs· What a Compliance Review involves· Typical Errors Involved with current methods· Required corrections· Underpayment of Wages and How Wage Restitution is handled· Other Reporting Requirements that Contractors can be faced with· What can happen when things go wrong


While this may not seem like a "big deal" if you are only working on a single job and have less than 8employees, think of what will happen when you work on more than one job and have more than 8employees.

How Do QuickBooks User's Comply With Reporting Mandates? 39


4.2 QuickBooks and Certified Payroll

Many QuickBooks users feel that Intuit should include a certified payroll report within the program,this would be a good idea if there was only a single certified payroll report format that was required onall state/federal funded construction projects in all 50 states. However, this is not the case, asreporting requirement vary from state to state and certified payroll is not something that is needed byevery contractor who purchases QuickBooks.

QuickBooks users will find the following instructions for creating a Certified Payroll Report in their online Payroll Support section. Many people will attempt to follow these instructions only to find thatthe final report fails miserably, because it lacks the required information.

We've included these instructions here for your review and so that you can try this report on your own, if you wish.

OverviewFollowing are the steps for creating a type of certified payroll report. Because QuickBooks is notspecifically set up to handle this type of report, there are two drawbacks:

1. The report shows amounts paid to each employee; it does not show hours. If you absolutelyrequire this information, you can create a time report that shows hours worked by an individualon a certain service item in a given time period.

2. The report represents all crafts. It is not possible to filter the report to represent a single craft.

Details:To create a certified payroll report, follow these steps for each worker:Setup an Hourly Wage payroll item for your prevailing wage jobs, called "Prevailing Wage Rate"

NOTE: When you do payroll for an employee who is working on a prevailing wage job, enter thehours worked under "Prevailing Wage Rate," rather than under "Hourly Wage."

1. From the Reports menu, choose Employees & Payroll, and click Payroll Summary to createa Payroll Summary Report (one of the Payroll reports).

2. Modify the Payroll Summary report. Click Modify Report at the top of the report. The ModifyReport window opens to the Display tab.

3. Click the Display Columns by drop-down list and choose Day.4. Click the Filters tab.5. In the Filter scroll box, select Name. Click the Name drop-down list and choose the Employee

for which you're creating the report.6. In the Filter scroll box, select Payroll Item. Click the Payroll Item drop-down list and choose

Prevailing Wage Rate.7. Click Ok.8. Select the Header/Footer tab. Change the Report Title to Certified Payroll Report.9. Click Memorize to memorize the report for future use.

Another drawback to this report, that Intuit doesn't mention, is the fact that you cannot filter thisreport by job.

http://payroll.intuit.com/support/kb/kbitem/1010138.html



4.3 Methods for Creating Certified Payroll Reports & Statementsof Compliance

QuickBooks users have typically complied with Certified Payroll Reporting requirements by using:· manual methods (hand written)· semi-automated methods (complicated Excel Spreadsheets)· through the use of stand-alone software

Now that we know what information must be shown on Certified Payroll Reports and Statements ofCompliance, and "how" it has to be reported, let's look at each of these methods, and how much timeit will take.

First, we will look at each of the methods listed above, as well as, the process that QuickBooks usersmust follow to generate these reports.


While this may not seem like a "big deal" if you are only working on a single job and have less than 8employees, think of what will happen when you work on more than one job, and have more than 8employees.

Next, we'll look at what happens during a Compliance Review.

Last, we will look at some of the most typical Errors and Required Corrections that occur using thesemethods, as well as, what can happen when things go wrong.



4.3.1 Hand Written

Procedures:· Generate multiple reports from QuickBooks to gather basic information

· Certified Payroll Box 1 Report modified to include Employee Federal WithholdingAllowances

· Payroll Summary Report showing Gross/Net Payroll Calculations· Weekly Timesheets for each employee (either from QuickBooks or use the ones from the

field), or a Customized Time By Job Detail Report· Profit & Loss by Job Report, drilling down to show gross wages by job

· Devise a way to track Employee Trade/Work Classifications· Compile "lists" of Trade/Work Classifications base rate/hourly fringe rate· Compile "lists" containing Project and Contractor information· Create a "master" handwritten OR typed form containing basic information for each job, which

must be completed with the details for each specific week· "Basic Information" would only include the following:

1. If your company was the Contractor or the Subcontractor on this project2. Company Name and Address3. The Project Name, identifying Federal and/or State project number and physical location

Problems:· Time consuming task· Error prone process· Tedious process· Illegible reports· Inaccurate reports· Duplicate and sometimes triplicate data entry· Gather data from multiple places· Have to go through this process from scratch each week· No QuickBooks integration· QuickBooks "class" feature is not an accurate way to track employee Trade/Work Classifications

if the employee falls under Split Classifications during the week· Check and re-check information for accuracy· Missing information· Reports do not meet compliance monitoring· Payments to the contract is delayed· Overall frustration & dissatisfaction with QuickBooks due to lack of functionality

Time Requirements:The U.S. Department of Labor estimates that it takes 1 hour to gather the data required to complete asingle one page Certified Payroll Report for one job with 8 employees manually.

While this might not "seem like a big deal for a single job", what happens when you work on 5, 10, 15or more of these jobs? Now think of the time requirements, and then, the fact that you or your clientmight actually need to hire someone part-time just to complete these required reports.



4.3.2 Excel Spreadsheets




field) or a Customized Time By Job Detail Report· Profit & Loss by Job Report, drilling down to show gross wages by job

· Devise a way to track Employee Trade/Work Classifications· Compile "lists" of Trade/Work Classifications base rate/hourly fringe rate· Compile "lists" containing Project and Contractor information· Create a "master" Excel Spreadsheet for each job containing basic information for each job and

listing every employee· "Basic Information" for each job would only include the following:

1. If your company was the Contractor or the Subcontractor on this project2. Company Name and Address3. The Project Name, identifying Federal and/or State project number and physical location

· "Basic Information" for each employee would only include the following:1. Employee Name2. Employee Address3. Employee Social Security Number4. # of Federal Withholding Allowances5. Employee Work Classification

Problems:· Time consuming process· Error prone process· Inaccurate reports· Duplicate and sometimes triplicate data entry· Gather data from multiple places· Update information each week - deleting employees from the "master" list as required· No QuickBooks integration· QuickBooks "class" feature is not an accurate way to track employee Trade/Work Classifications

if the employee falls under Split Classifications during the week· No way to export all required information from QuickBooks· Check and re-check information for accuracy· Missing information· Reports do not meet compliance monitoring· Payments to the contract is delayed· Overall frustration & dissatisfaction with QuickBooks due to lack of functionality

Time Requirements:The U.S. Department of Labor estimates that it takes 1 hour to gather the data required to complete asingle one page Certified Payroll Report for one job with 8 employees manually, using an ExcelSpreadsheet only reduces this time by less than 5 minutes.




4.3.3 Stand-Alone Software




field) or a Customized Time By Job Detail Report· Profit & Loss by Job Report, drilling down to show gross wages by job

· Devise a way to track Employee Trade/Work Classifications· Compile "lists" of Trade/Work Classifications base rate/hourly fringe rate· Compile "lists" containing Project and Contractor information· Create a "master" record for each job containing information for each job · Create a "master" record for each employee containing all required information

Problems:· Time consuming process· Error prone process· Tedious process· Duplicate and sometimes triplicate data entry· Same data in multiple software programs· Update information each week· No QuickBooks integration· QuickBooks "class" feature is not an accurate way to track employee Trade/Work Classifications

if the employee falls under Split Classifications during the week· No way to export information from QuickBooks· May not provide State specific reporting formats· Check and re-check information for accuracy· Missing information· Reports do not meet compliance monitoring· Payments to the contract is delayed· Overall frustration & dissatisfaction with QuickBooks due to lack of functionality

Time Requirements:The U.S. Department of Labor estimates that it takes 1 hour to gather the data required to complete asingle one page Certified Payroll Report for one job with 8 employees manually, using a Stand-AloneSoftware program, like with an Excel Spreadsheet, only reduces this time by less than 5 minutes.




4.4 Payroll Reviews and Corrections

4.4.1 Compliance Reviews

The contract administrator or other inspector may visit the project site and interview some of theworkers concerning their employment on the project.

In addition, the contract administrator will periodically review payrolls and related submissions,comparing the interview information to the payrolls, to ensure that the labor standards requirementshave been met.

You will be notified by the contract administrator if these reviews find any discrepancies or errors, and you will be given instructions about what steps must be taken to correct any problems.

4.5 Typical Errors and Required Corrections

Inadequate payroll information – if some other alternate form of payroll report does not containALL of that information that would be included on the USDOL Form WH-347, the employer will beasked to resubmit the payrolls on an acceptable form.

Missing addresses and Social Security Numbers – if the addresses and Social SecurityNumbers are not submitted on the payrolls, the employer will be asked to supply the missinginformation.

Incomplete payrolls – if the information on the certified payroll reports is not complete, forexample, if work classifications or rates of pay are missing, the employer will be asked to send acorrected payroll.

Classifications – if the payrolls show work classifications that do not appear on the wage decision orthe project wage sheet, the employer will be asked to reclassify the employees in accordance with thewage decision or the employer may request an additional classification and wage rate . Ifreclassification results in an underpayment (the wage rate on the payroll is less than the wage raterequired for the new classification, the employer will be asked to pay wage restitution to allaffected reclassified employees. (See page 14 for more information about wage restitutions.)

Wage Rates – if the wage rates on the payroll are less than the wage rates on the wage decisionfor the work classification reported, the employer will be asked to pay wage restitution to all affectedemployees.

Apprentices and trainees – if a copy of the employee(s) registration or approved programration and wage schedule is not submitted with the first payroll on which an apprentice or traineeappears, the employer will be asked to submit a copy of each apprentice(s) or trainee(s) registration, and/or, the approved program ratio and wage schedule. If the ratio of apprentices or trainees tojourneymen on the payroll is greater than the ratio in the approved program, the employer will beasked to pay wage restitution to any excess apprentices or trainees. Also, any apprentice or traineethat is not registered in an approved program must receive the journeyman’s wage rate for theclassification of work they performed.

Overtime – if the employees did not receive at least time and one-half for any overtime hoursworked on the project, the following will occur:

1. If the project is subject to CWHSSA overtime requirements, the employer will be asked to paywage restitution for all overtime hours worked on the project (overtime hours worked at otherprojects are not subject to CWHSSA). The employer may also be liable to the United Statesfor liquidated damages computed at $10 per day per violation. OR,

2. If the project is not subject to CWHSSA, the employer will be notified of the possible FLSAovertime violations. Also, the Labor Relations staff may refer the violations to the DOL forfurther review.

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Computations – if the payroll computations (hours worked times rate of pay) or extensions(deductions, net pay) show frequent errors, the employer will be asked to take greater care. Wagerestitution may be required if underpayments resulted from the errors.

Deductions – if there are any “Other” deductions that are not identified, or if employeeauthorization is not provided, or if there is any unusual (very high or large numbers) deductionactivity, the employer will be asked to further identify the deductions, provide employee authorizationor explain unusual deductions, as determined.

Fringe Benefits – if the wage decision contains fringe benefits, but the payroll does not indicatehow fringe benefits were paid (neither 4(a) nor 4(b) is marked on the Statement of Compliance), theemployer may be asked to submit corrected payrolls and will be required to pay wage restitution, ifunderpayments occurred. However, if the basic hourly rates for the employees are at least as much asthe total wage rate on the wage decision (basic hourly rate plus the fringe benefit rate), no correctionis necessary.

Signature – if the Statement of Compliance is not signed or is missing, the employer will beasked to submit a signed Statement of Compliance for each payroll affected.

On-site interview comparisons – if the comparison of on-site interviews to the payrollindicates any discrepancies (for example, the employee does not appear on the certified payroll reportfor the date of the interview), the employer will be asked to submit a corrected payroll report.

4.6 Restitution for Underpayment of Wages

When underpayments of wages have occurred, the employer will be required to pay wage restitution tothe affected employees. Wage restitution must be paid promptly in the full amount due, lesspermissible and authorized deductions.

Notification to the prime contractor – the contract administrator will notify the primecontractor in writing of any underpayments that are found during payroll or other reviews. The noticewill describe the underpayments and provide instructions for computing and documenting therestitution to be paid. The prime contractor is allowed 30 days to correct the underpayments. Notethat the prime contractor is responsible to the contract administrator for ensuring that restitution ispaid. If the employer is a subcontractor, the subcontractor will usually make the computations andrestitution payments and furnish the required documentation through the prime contractor.

Computing wage restitution - wage restitution is simply the difference between the wage rate paidto each affected employee and the wage rate required on the wage decision for all hours worked whereunderpayments occurred. The difference in the wage rates is called the adjustment rate. Theadjustment rate, times the number of hours worked, equals gross amount of restitution due.

Correction payrolls – the employer will be required to report the restitution paid on a correctioncertified payroll. The correction payroll will reflect the period of time for which restitution is due (forexample, Payrolls #1-#6, or a beginning date and ending date). The correction payroll will list eachemployee to whom restitution is due and their work classification, the total number of hours involved(daily hours are usually not applicable for restitution), the adjustment wage rate (the differencebetween the required wage rate and the wage rate paid), the gross amount of restitution due,deductions, and the net amount to be paid. A signed Statement of Compliance must be attached to thecorrection certified payroll.

While the above is the "stated" correct method, we have found that it often is not the accepted orapproved method. More often than not, a "correction payroll" will only be approved if thepayroll contains the original information including the wage underpayment amount and theneach employee listed again with their work classification, the total number of daily hoursinvolved, the adjustment wage rate, the gross amount of restitution due, deductions and the net

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amount paid. A signed Statement of Compliance must also be attached.

Employee signature – each employee who has received restitution signs the certified payroll asevidence of his or her receipt of the payment.

Review of correction CPR – the contract administrator will review the correction payroll to ensurethat full restitution was paid. The prime contractor shall be notified in writing, of any discrepancies, and will be required to make additional payments, if needed, documented on a supplementalcorrection payroll within 30 days.

Unfound workers – sometimes wage restitution cannot be paid to an affected employee because,for example, the employee has moved and can’t be located.In these cases, at the end of the project the prime contractor will be required to place in a deposit orescrow account an amount equal to the total amount of restitution that could not be paid because theemployee(s) could not be located. The contract administrator will continue to attempt to locate theunfound workers for 3 years after the completion of the project.



4.7 Other Reporting Requirements

4.7.1 Union or Bona-fide Plan Fringe Benefit Reports

If a contractor pays all required fringe benefits to approved plans, funds or programs in amounts notless than stated in the wage decision associated with the contract, liability reports will need to be filedwith either the Union or the Administrator of the bona-fide plan, along with a check for the properamounts.

Fringe benefits are usually calculated on an hourly rate times the number of hours worked by eachemployee at each classification over a specific time frame (usually a full calendar month).

These reports can range from simple to complex, and often times, must be submitted on aspecial form that is required by the agency administering the funds.

4.7.2 Union Dues Reports

If the contractor is a member of a Union, and hires only Union Employees, the contractor will berequired to submit liability reports showing the Union Dues withheld from the employees paycheck,along with the check for the proper amounts.

Union Dues are usually reported and submitted by week, and are based on the number of hoursworked, times the appropriate union dues hourly rate.

These reports can range from simple to complex, and often times, must be submitted on aspecial form that is required by the agency administering the funds.

4.7.3 EEOC/Work Utilization Reports

EEOC/Work Utilization Reports are sometimes also required to be submitted on a weekly, monthly,or annual basis, depending upon the specifications written into the contract.

These reports are governed by the Equal Employment Opportunity Commission and report thenumber of employees working on a specified project based on Work Classification, Sex, Race, andnumber of hours worked during the reporting period.

There are several commonly used reporting forms on the Federal level, as well as, some state specificones.

4.7.4 The American Recovery & Reinvestment Act of 2009

The American Recovery and Reinvestment Act of 2009 (ARRA), provides the State Departments ofTransportation and Federal Lands Agencies with $27.5 billion for highway infrastructure investment. With these funds also comes an increased level of data reporting with the stated goal of improvingtransparency and accountability at all levels of government.

The Federal Highway Administration (FHWA), in conjunction with the Office of the Secretary ofTransportation (OST) and the U.S. Department of Transportation, have devised a set of reportingforms that are required to be submitted on projects funded through ARRA.

Each State has the option to either use the forms developed by the Federal Highway AdministrationOR to require the use of their own forms and reporting systems, which must adhere to the requiredinformation at the Federal level.

This transparency and accountability flows up from the contractor working on the project and finallyto the State and Federal government.

As of April 2009, to our knowledge, at this time, all states will require the Federal forms.



The ARRA adds a total of 5 possible reports that must be completed periodically by contractors untilSeptember 2012.

4.8 What Happens When Things Go Wrong?

Even in the best of circumstances, things can go wrong.

In this case, it means that there is a difference of opinion – a dispute – about whether and to whatextent underpayments have occurred. These disputes are usually between the contract administratorand one or more employers (the prime contractor and/or subcontractors). The dispute may involvesomething simple, such as an additional classification request that is pending; or something assignificant as investigative findings following a complaint of underpayment.

4.8.1 Administrative Review on Labor Standards Disputes

Administrative Review on Labor Standards Disputes – a dispute about labor standards andcompliance can arise for a number of reasons. The labor standards clause in the contract and DOLregulations provide for administrative review of issues where there is a difference of views between thecontract administrator and any employer. The most common circumstances include:

Additional classifications and wage rates – additional classification and wage rate requests aresometimes denied. An employer that is dissatisfied with the denial can request reconsideration. Theemployer may continue to pay the wage rate, as requested, until a final decision is made. When thefinal decision is known, the employer will be required to pay any additional wages that may benecessary to satisfy the wage rate that is established.

Reconsideration – normally identification for the reasons for denial are indicated in theresponse for the request. Any interested person (the contract administrator, employer,representatives of the employees) may request reconsideration of the decision on theadditional classification request. The request for reconsideration should be made in writingand should thoroughly address the denial reasons. Requests for reconsideration should bemade through the contract administrator.Administrative Review Board – any interested party may request a review of theAdministrator’s decision on reconsideration.

Findings of underpayment – compliance reviews and other investigations may result in findingsof underpayment. The primary goal in every case and at every step in this process is to reachagreements about who may have been underpaid and how much wage restitution may be due and, ofcourse, to deliver restitution to any underpaid workers. The contract administrator will usually workinformally with contractors to reach such agreements. Contractors will have an opportunity toprovide additional information to the contract administrator that may explain apparentinconsistencies and/or resolve the discrepancies.

If informal exchanges do not result in an agreement, the final determinations and schedule of wagesdue will be presented to the contractor in writing, and the contractor will be permitted 30 days inwhich to correct the underpayment(s) or to request a hearing on the matter before the DOL. Therequest for hearing should be made in writing and should explain what findings are in dispute and thereasons. The request should be made through the contract administrator. The contract administratorwill submit a report of the findings and the hearing request to the DOL for review and furtherconsideration.

DOL Review – the DOL will review the contract administrator’s report and the argumentsagainst the findings presented in the hearing request. The DOL may affirm or modify thefindings based upon the materials presented. You will be notified in writing by the DOL of theresults of its reviews; you will be given an opportunity to correct any underpayments or tocontinue with the hearing request.



Administrative Review Board – contractors and/or subcontractors may request a reviewby the Administrative review board or its equivalent of the decision(s) rendered in theadministrative hearing process.

4.8.2 Withholding of Payment to the Contractor

The contract administrator may cause withholding from payments due to the prime contractor toensure the payment of wages which are believed to be due and unpaid, for example, if wageunderpayments or other violations are not corrected within 30 days after notification to the primecontractor.

Withholding is considered to be serious and is not taken unless warranted.

Very often, the amount kept in retentions is sufficient to cover any back wage liability, so withholdingfrom payments is not considered necessary. However, if withholding is deemed necessary, you will benotified in writing. Only the amounts necessary to meet the contractor’s (and/or subcontractor’s)liability shall be withheld.

Remember, the prime contractor is responsible and will be held liable for any wagerestitution that is due to any worker employed in the construction of the project,including workers employed by subcontractors and any lower-tier subcontractors.

4.8.3 Deposits & Escrows

In every case, it is attempted to complete compliance actions and resolve any disputes, before theproject is completed, and final payments are made.

However, sometimes, corrective actions or disputes continue after project completion and provisionsmust be made to ensure that funds are available to pay any wage restitution that is ultimately founddue.

In these cases, the project is allowed to proceed to final closing and payments provided the primecontractor deposits an amount equal to the potential liability for wage restitution and liquidateddamages, if deemed, in a special account.

The deposit or escrow account is controlled by the contract administrator. When a final decision isrendered, the contract administrator makes disbursements from the account in accordance with thedecision. Deposit/escrow accounts are established for one or more of the following reasons:

a. Where the parties have agreed to amounts of wage restitution that are due, but the employerhas not furnished evidence to date, that all of the underpaid workers have received their backwages. The deposit is equal to the amount of restitution due to workers lacking paymentevidence. As proper documentation is received, amounts corresponding to the documentationis returned to the depositor. Amounts for any workers who cannot be located are held inescrow for 3 years.

b. Where underpayments are suspected and an investigation has not yet been completed. Thedeposit is equal to the amount of wage restitution and any liquidated damages, if applicable,that is estimated to be due. If the final determination of wages due is less than the amountestimated and placed in the escrow account, the account will be reduced to the final amount, and the difference will be returned to the depositor. If the parties agree to the investigativefindings, the amounts due to the workers will be disbursed from the escrow account inaccordance with the schedule of wages due.

c. Where the parties are waiting for the outcome of an administrative hearing that has been orwill be filed contesting a final determination of wages due. The deposit shall be equal to theamount of wage restitution and liquidated damages, if applicable, that have been determineddue. Once a final decision is made, disbursements from the account are made in accordancewith the decision.



4.8.4 Debarment

Contractors and/or subcontractors that are found to be in aggravated or willful violation of the laborstandards provisions of the Davis-Bacon and Related Acts (DBRA) will be ineligible (debarred) toparticipate in any DBRA or Davis-Bacon Act contracts for up to 3 years.

Debarment includes the contractor or subcontractor and any firm, corporation, partnership, orassociation, in which the contractor or subcontractor has a substantial interest. Debarmentproceedings can be recommended by the contract administrator or can be initiated by the DOL.



4.9 Section Notes

Part

V

Let's Look at Automation 53


5 Let's Look at Automation

As an active Certified QuickBooks ProAdvisor and bookkeeper, specializing in the constructionindustry, I completed certified payroll reports for a number of my clients between 1996 and 2000 on aweekly basis using Excel spreadsheets. It would take roughly 30-45 minutes to complete job-costedpayroll in QuickBooks for 8 employees working on 2 prevailing wage jobs and one "private job" (whichdid not require a certified payroll report), and then, another 2 hours to complete the requiredCertified Payroll Report and Statement of Compliance.

Having had this kind of first-hand experience, I can assure you that any of the methods previouslymentioned - just don't cut it! And this knowledge is what "sparked" the idea for creating aQuickBooks integrated application that would solve this time-consuming and error-prone task.



5.1 Objectives

Upon finishing this section on "Let's Look at Automation", you will have gained a basic understandingof:

· What problems automation would solve· How automation would work· What QuickBooks information would be accessed and how· What modifications would be required to the QuickBooks File



5.2 What Would Automation Solve?

The philosophy behind the design of our software (Certified Payroll Solution) was simple:"If QuickBooks was properly setup and used, it would provide the backbone of the informationthat is required on the final reports, and we could utilize information that had already beenentered."

Automation would eliminate the following procedures:· Generating multiple reports from QuickBooks to gather basic information· Provide a way to track Employee Trade/Work Classifications· Provide a means of tracking various Trade/Work Classifications base rate/hourly fringe rate· Provide a "reliable" means of holding basic Project information· Eliminate the need to manually create from scratch or update "master" report templates each

week

Automation would solve the following problems:· Save time on contract compliance· Create accurate, timely, legible reports· Eliminate transposition errors· Eliminate duplicate and sometimes triplicate data entry· Eliminate the same data being stored in multiple software programs· Eliminate the need to update information each week· Provide QuickBooks integration· Utilize information already entered in QuickBooks· Provide State specific reporting formats· Eliminate the need to check and re-check information for accuracy· Turn hours worth of work into minutes



5.2.1 How Would Automation Work?

When we designed Certified Payroll Solution (CPS), we did so with the following things in mind:

Utilize the QuickBooks SDKto retrieve data already

entered in the company datafile on a "read-only" basis.

QuickBooks withsome "fine tuning"

will hold thebackbone of the

information requiredon the final reports.

QuickBooks IntegratedApplication would hold, in its

own database of "linkedrecords", additional informationrequired about Employees, Jobs,

Wages, and Deductions thatQuickBooks on its own is not

capable of storing.Data from both QuickBooks and the

QuickBooks Integrated Application wouldbe "merged" together and the final reportswould be created using Microsoft Excel and

Word and printed.Hours of work would be

reduced to minutes.

Certified Payroll Solution performs most of its work “behind the scene” , and perhaps the bestway to explain how CPS works, is to say that it knows as much as you do about certified payrollreporting mandates (if you have been doing these reports for any length of time), and works muchlike you would to prepare them, by gathering information from your QuickBooks data file. Basically,when you purchase CPS, it’s like hiring a new employee who is a “whiz” at certified payroll - butneeds to learn about your company - your employees, the jobs you are working on, your payrollwage items, and payroll deductions.

First, it looks at the Weekly Timesheets and the Employees, Jobs, Payroll Items, and hours workedeach day; then, it starts verifying that it knows about the items found - if CPS finds anyone or anything



new, it starts making “lists”:• John J. Equipment needs to be added to my database; Amy L. Apprentice already has a linkedrecord.• Job Name for Customer One needs to be added to my database; Change Orders already has alinked record.• Payroll Item 2-1 Backhoe needs to be added to my database;• Payroll Deduction Child Support Garnishment needs to be added to my database

CPS will then “prompt you” to create linked records for these items that will hold additionalinformation. Then, it simply starts sorting, compiling, and merging the data - much as you wouldfrom various reports that you would print from QuickBooks in order to complete the reports manually- CPS does this through “linking” in order to generate the completed reports.

Certified Payroll Solution accesses your QuickBooks data file on a “read-only basis”; meaning ittreats your data file much like a book that holds information that it will “read and utilize”.Beginning with the 2005 version of QuickBooks, this is validated when you initially grant CPSpermission to access your company file. Any and all changes to your QuickBooks company file MUSTbe done by a human. Your QuickBooks data is totally safe.

5.3 What QuickBooks Information Is Accessed & How?

Certified Payroll Solution accesses the following portions of the QuickBooks data file, on a"read-only" basis - meaning, it never writes anything back:

· Job Records· Employee Records· Payroll Wage Items· Payroll Wage Rates· Weekly Timesheets· Payroll Transaction Reports

5.3.1 What "Modifications" Would Be Required to the QuickBooks Data File?

Very few modifications would be required to the QuickBooks data file, rather, you would simply "utilize" the existing features and functionality of QuickBooks in a different, perhaps morecustomized way.

· The "Ship To" Address Block of the QuickBooks Job Record would hold ProjectInformation (Project Name and Location)

· Build a more extensive Payroll Wage Item List, as the initial means of tracking employeeTrade or Work Classifications

· Assign the newly created payroll wage items to individual employees with the appropriate Rateof Pay/Cash Fringes

· Utilize the QuickBooks Time Tracking feature· Enter all employee hours using the QuickBooks Weekly Timesheet function in order to obtain

Hours Worked, Day & Date· Utilize the option to "Use time data to create paychecks" (found in the Payroll &

Compensation section of each employee record) so that hours entered into the WeeklyTimesheet are automatically brought into the QuickBooks paycheck

· Process payroll in QuickBooks using Standard, Enhanced, or Assisted Payroll in order to obtain Gross Amount Earned - This Job/All Jobs , Deductions , and Net Wages Paidfor Week

For additional information about using QuickBooks Payroll Items and Work/Trade Classifications,read this extensive article which includes 8 of the most common set-ups that we've encountered todate.

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http://www.sunburstsoftwaresolutions.com/articles/work_classifications.pdf



5.4 Section Notes

Part

VI



6 Frequently Asked Questions

6.1 How Does Sunburst Work with Advisors, CPA's, etc.?

A message from Nancy Smyth, Certified QuickBooks ProAdvisor & President, Sunburst SoftwareSolutions, Inc.

We recognize that the selection of a QuickBooks® integrated application for your business (oryour clients business) must be based on detailed product knowledge and the confidence thatcomes from detailed product information and practical experience with the program.

With those thoughts in mind, we have provided a dedicated support page for your convenience inlocating the information that you are seeking at http://www.sunburstsoftwaresolutions.com/referral-program.htm, as our site contains well over 150 pages.

We do not have a commission program, a reseller program, nor do we charge you to become a"Certified Sunburst Advisor".

These types of programs are costly to track on our end and/or costly for you to participate in.

We prefer to work with ProAdvisors & CPA's on a Referral Partner Program basis: where we referyou to our customers who contact us for information about an Advisor or CPA in their area who isfamiliar with both QuickBooks and the construction industry for ongoing file review, tax preparation,etc. Most of the time, our programs are already up and running, so support of our software is notmandatory. Please contact us for more information or to participate.

Live Demos have been replaced with extensive, FREE, Audio/Video Training (available usingWindows Media Play or Flash - with a Table of Contents and available from http://www.sunburstsoftwaresolutions.com/certified-payroll-solution-free-training/view-category.htm.

6.2 What are the Top Benefits of Working with a Developer?

As an Advisor, the top benefits of working with ANY developer is: * the ability to solve client pain points by offering total solutions, not just complicated work-around's * you will be able to differentiate yourself from other Advisors in your area * avail yourself of incremental revenue opportunities * earn high revenue by being a consultant

The Intuit strategy and the Intuit Developer Network Mission stresses Right For My Business.

Together, IDN developers and Intuit deliver RFMB (Right For My Business) solutions that smallbusinesses are asking for.

http://www.sunburstsoftwaresolutions.com/referral-program.htm


http://www.sunburstsoftwaresolutions.com/certified-payroll-solution-free-training/view-category.htm

http://www.sunburstsoftwaresolutions.com/certified-payroll-solution-free-training/view-category.htm

Frequently Asked Questions 61


6.3 What Kind of Training is Involved to Support/Use YourSoftware?

There is no requirements for any sort of formal training, our software has been programmed to knowthe reporting requirements for each and every state, Certified Payroll Solution knows:

· where the information belongs on the final reports· what information it can get from QuickBooks· what information it must hold in its own database· how that information is to be displayed and how it is to be displayed on the final, completed

report

We have done all the hard work, leaving you to only enter missing information, that QuickBooks onits own provides no means of tracking, when prompted; all of this is covered in the TrainingPresentation and then in the detailed manual that comes with the program.

What we do suggest is that you become familiar with what information is required on the CertifiedPayroll Report(s) that are specific to your state; which you can easily do by visiting the DemonstrationPage on our website, selecting your state from the list, and then viewing full-sized sample reports in .pdf format.

Then, it is simply a matter of working closely with your client and becoming familiar with theirbusiness, their employees, their jobs, etc. - because they will know the reporting requirements and themissing pieces.





6.4 What Kind of Training/Marketing Materials Do You Provide?

Certified Payroll Solution Resources include the following items which may be accessed by clicking onthe item name below (additional resources are available throughout our website):

· About Us - Company Background & experience.· Whitepaper - pdf format, 119 pages.· Case Studies

· Case Study: Montano Plumbing, Inc., CPS user since April 2002.· Case Study: Direct Digital Controls, Inc., CPS user since April 2003.· Case Study: Kimo Constructors, Inc., CPS user since July 2001.· Case Study: Certified Payroll Solution Enhanced My Credibility as a Certified QuickBooks

ProAdvisor - Don Grassmann, Flexible Financials LLC; CPS user since February 2004.· Interview: Certified Payroll Reporting - A Bookkeeper's Nightmare: Nancy Smyth, CQA

· Product Sheet - Product overview with user comments.· Frequently Asked Questions. - about Certified Payroll Solution.· Integration with QuickBooks - .pdf format, 41 pages.· Integration Overview - shows where each item required on the Certified Payroll Report and

Statement of Compliance comes from.· Utilization of the QuickBooks SDK - How Certified Payroll Solution utilizes the QuickBooks

SDK.· Enterprise 5.0 Minimum Permission Requirements.· Enterprise 6.0 - 9.0 Minimum Permission Requirements.· Demonstrations & Sample Reports - How the product works & the reports it produces.· Common Setup Problems - and their resolutions.· Generating Delinquent Reports - a step-by-step guide to generating past due reports.· Dealing with Employee Work Classifications - understanding how CPS deals with Employee

Work Classifications, includes 8 different examples on how you might need to set things up;both on the QuickBooks side and in CPS.

· Handling Bi-Weekly Payroll - how CPS handles QuickBooks bi-weekly payroll to produce weeklycertified payroll reports.

· Handling Wage Restitution - the correct procedure for handling underpayment of prevailingwages to employees.

· What is Certified Payroll? - a plain English guide to understanding Davis-Bacon WageReporting & Certified Payroll Reporting requirements and is the article you are currentlyreading.

· Customer Testimonials on our site· User Review and Comments on the QuickBooks Solutions Marketplace· Side-by-Side Comparison - Sunburst's Certified Payroll Solution, Quantum's Certified Payroll

Reports, and Wizard Business Solutions CertPay Wizard.

http://www.sunburstsoftwaresolutions.com/about-us.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-whitepaper.htm

http://www.sunburstsoftwaresolutions.com/download-document/montano-plumbing-inc.htm

http://www.sunburstsoftwaresolutions.com/download-document/direct-digital-controls-inc.htm

http://www.sunburstsoftwaresolutions.com/download-document/kimo-constructors-inc.htm

http://www.sunburstsoftwaresolutions.com/download-document/don-grassman-flexible-financials-llc.htm

http://www.sunburstsoftwaresolutions.com/download-document/certified-payroll-reporting-a-bookkeeper-s-nightmare.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-brochure.htm

http://www.sunburstsoftwaresolutions.com/certified-payroll-solution-faq.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution/quickbooks-integration.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-troubleshooting-blank-spots-on-reports.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-program-design.htm


http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-enterprise-6.0-8.0-minimum-user-permissions.htm


http://www.sunburstsoftwaresolutions.com/certified-payroll-solution-errors/view-category.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-printing-delinquent-reports.htm

http://track.websiteceo.com/r/100974/www.sunburstsoftwaresolutions.com/articles/delinqent%20rpt.pdf

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-employee-work-classifications.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-bi-weekly-payroll.htm

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-underpaying-employees.htm

http://www.sunburstsoftwaresolutions.com/certified-payroll-references.htm

http://marketplace.intuit.com/AppID-2298-Reviews.aspx

http://www.sunburstsoftwaresolutions.com/view-document-details/certified-payroll-solution-comparison-chart.htm



6.5 What Kind of Support Do You Offer?

We define Technical Support as "Knowledgeable people assisting the users of our softwareproducts. In general, technical support services help you to solve a specific problem that you arehaving with a product - rather than providing training, customization, or other support services - sothe word "assisting" in this definition is important.

· If you call us and we "teach" you to use the software or "walk you" through setup which has beendocumented in the "Training Demonstration" or in the manual - that's "training" and it isbillable to you.

· If you call us and we help you with an error code or problem you are having with our software,answer a specific question that you have about setup, or listen to your feedback about oursoftware - that's "technical support".

Our Support Policy does include provisions for Free Support, Free Training, Paid Training, andMaintenance; and you are entitled to the same support that we offer our end user's - see the SupportPolicy on our website for more specific details.

We offer a wealth of free training and resource materials to help you to become familiar with theproblems our software solves and how it works - see "How Does Sunburst Work with Advisors, CPA'setc.?" in this article for a list of CPS Support Resources or visit our dedicated Advisor support pageon our website to view all materials for all of our products.

6.6 There's So Much to Remember...Do You Offer a "Set-UpChecklist"?

We are working on developing one, however, there are only so many hours in the day! When it'scomplete you can download it from the Advisor/Accountant Support Page - in the meantime you canuse the "Quick Start Guide", included in the manual, for the basics. The training demonstration willalso cover standard basic setup, and don't forget to utilize the various other support documentslocated on our website.

6.7 Can You Provide a "List" of Information that My Client & IHave to Gather?

Due to the varying amounts of information that CPS has to hold from State to State, it would beimpossible to develop a "standard" list.

However, it should be quite easy for you to develop a list for your particular state, simply by goingthrough the Training Presentation and compiling a list of items that are shown in each linked record.

Feel free to post these on our forum to share with others at http://sunburstss.com/forum OR, if youwould rather, email the "list" to [email protected] and I'll be happy to post it on the Advisors/Accountants page.

6.8 Where Does All the Information Come From?

The Certified Payroll Report contains 17 data fields and the Statement of Compliance contains 9, all ofthis information is documented in detail in our Where Does the Info Come From? IntegrationOverview. While this integration overview is specific to the Federal WH-347, State Specific reports dofollow the same logic.

http://www.sunburstsoftwaresolutions.com/support-policy.htm

http://www.sunburstsoftwaresolutions.com/support-policy.htm



http://www.sunburstsoftwaresolutions.com/advisors-accountants/

http://www.sunburstsoftwaresolutions.com/advisors-accountants/

http://sunburstss.com/forum

mailto:[email protected]

http://www.sunburstsoftwaresolutions.com/advisors-accountants.htm

http://www.sunburstsoftwaresolutions.com/advisors-accountants.htm





6.9 What Information Is Always Retrieved from QuickBooks?

Regardless of what state you or your client reside in, the following information is always retrievedfrom the QuickBooks data file.

· Employee Name, Address, Sex, and Social Security Number from the QuickBooks EmployeeRecord

· Payroll Wage Items and Rates of Pay from the QuickBooks Employee Record, Payroll &Compensation section

· Employee Hours worked on specific/various jobs from the QuickBooks Weekly Timesheet· Basic Project information from the QuickBooks Job Record· Gross Wages, Company Contributions, Deductions, and Net Pay from the QuickBooks Payroll

Transaction Detail Report



6.10 Section Notes

Part

VII

About Sunburst Software Solutions, Inc. 67


7 About Sunburst Software Solutions, Inc.

Nancy Smyth, President of Sunburst Software Solutions, Inc., has utilized Intuit products in a varietyof industries since 1986, specializing in the construction industry, and has been a CertifiedQuickBooks ProAdvisor since 1999. Providing bookkeeping services for several small Union and Non-Union construction firms, Nancyknew QuickBooks® was a great tool to be used not only for herself, but also by the small businessowner. While completing a job-costed payroll for 10 employees or a progress invoice withinQuickBooks® was a fast and efficient process, completing the required Certified Payroll Reports andAIA billing would take hours to complete. Distaste for these tedious tasks led to a lengthy search forsomeone to extract this information from QuickBooks® and assemble these forms ready to be signedand submitted.

In August 2000, a method was found for retrieving QuickBooks® information through the use of theOfficeQ Pro product developed by DataBlox, Inc. Ben Smyth, a Software Engineer who had writtensoftware programs since 1980 for use in Municipal, Retail, Restaurant, Web Services, GPS/Imaging,and Travel Industries (many involving complex payroll products for use in the Commercial andMunicipal arenas), was willing to embark on this project and Sunburst Software Solutions, Inc. wasborn in Lakeside, MT.

Already familiar with the Federal Prevailing Wage Laws, and Connecticut Specific Prevailing Wagemandates, research began to make Certified Payroll Solution compliant with the requirements of all50 states, and coding began. By late 2000 Nancy’s tedious task was testing the program with livepayroll data.

In March 2001 Certified Payroll Solution was released, and has since grown to include variousEEOC/Work Utilization Reports, provides the ability to "electronically file" certified payroll reports,and includes a flexible Benefit Report that can be used to report Union Fringe Benefit or “bona fide”plan contributions.

In August 2001 Sunburst Software Solutions, Inc. became a Premier Member of the Intuit DeveloperNetwork, during its initial launch, knowing that the Software Development Kit offered by Intuit wouldprovide a more direct and, therefore, sanctioned means of accessing QuickBooks® data.

After determining a market to automate AIA billing from Estimates and Progress Invoices created inQuickBooks®, Construction Application for Payment Solution was initially released in January 2002,with the official launch of the Intuit Developer Network and the QuickBooks Solutions Marketplace.

Certified Payroll Solution was entirely rewritten in January 2003, when the Intuit SoftwareDevelopment Kit was updated to include access to Payroll Information for Sunburst’s 2003 productline. Sunburst still maintains their original version 4.9 of the program for use with QuickBooks 2002and prior versions.

In December 2004, Sunburst became a Microsoft Registered Partner and is in the process ofbecoming a Microsoft Certified Partner.

Development of Wage Manager Solution, Sunburst’s newest program, began in mid-December 2004and was released in February 2005. Wage Manager will allow business owners, payrolladministrators, and ProAdvisors/CPA’s to work with payroll wage items for multiple employeessimultaneously.

Sunburst Software Solutions, Inc. maintained their Premier Member status in the Intuit DeveloperNetwork until September 2006. At this time Sunburst became one of the first 10 Developers toachieve “Gold Developer” status through rigorous testing of their software programs by an

independent 3rd

party software testing company hired by Intuit, passed a “customer satisfaction



survey”, provided customer case studies, and are currently involved in a ProAdvisor Review of theirproducts. In fact, according to Shannon Adkins, Senior Manager, Developer Engagement & CustomerMarketing of the Intuit Developer Network, she stated that the "results of Sunburst’s customersatisfaction survey were higher than that of Harley-Davidson or Ford Motor Company".

Sunburst Software Solutions, Inc. is committed to bringing high-end functionality at a reasonableprice to the small and growing contractor. As of December 13, 2006 over 80% of their customers haveremained users by purchasing a moderately priced Annual Maintenance Contract, which providescompatibility and/or conversion updates for the latest releases of the QuickBooks® product line, aswell as user requested enhancements and new forms as they become available.

All of Sunburst’s products have been designed to specifically meet the needs of QuickBooks® users inthe construction industry. Sunburst Software Solutions’ philosophy is that QuickBooks®, whenproperly setup and used, will provide the backbone of the missing information for the final reportsand billings. Sunburst will utilize that information on a read-only basis and missing information willbe held in “linked records” within a Sunburst program, the information from both programs will thenbe merged together to produce the final reports and/or billings…leaving the user with the final task ofsigning and mailing the documents.

Please direct questions and comments to Nancy Smyth at (802) 339-4352 or via email at [email protected]

mailto:[email protected]

what is certified payroll? - sunburst software solutions · 2015. 6. 18. · certified payroll is a...

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