Certified payroll reporting is a weekly wage-and-hour report that contractors and subcontractors must submit on federally funded construction projects. It documents every worker’s hours, pay rate, job classification, and fringe benefits, then pairs that data with a signed statement certifying the workers were paid at least the prevailing wage required by law. The requirement exists primarily under the Davis-Bacon Act, which covers federal and District of Columbia construction contracts exceeding $2,000.
When Certified Payroll Applies
The Davis-Bacon Act and its related statutes trigger certified payroll reporting on contracts for construction, alteration, or repair of public buildings and public works, including painting and decorating. The $2,000 contract threshold is low enough that it captures most federally funded construction work, from major highway projects to small renovation jobs on government buildings.
Many state and local governments impose similar prevailing-wage laws on projects funded with state or municipal dollars, each with their own reporting rules. If your project receives federal funding through a related act (such as federal highway or housing programs), certified payroll requirements typically follow the money regardless of which agency oversees the work. The obligation applies to every tier of the project: if you’re a subcontractor three levels removed from the prime contractor, you still submit certified payroll for your own workers.
What the Report Includes
The standard federal form is DOL Form WH-347, though contractors can use an equivalent format as long as it captures the same data. For each worker on the project during a given week, the report must include:
- Identifying information: name, an individual identifier (typically the last four digits of the Social Security number), and a worker entry number.
- Job classification: the specific labor classification from the applicable Davis-Bacon wage determination (for example, “Electrician” or “Plumber”), plus whether the worker is a journeyworker or a registered apprentice, including the apprentice’s level of progression.
- Hours worked: daily hours broken out by straight time and overtime, along with total hours for the week.
- Pay details: actual hourly wage rate, fringe benefit credits, any cash paid in lieu of fringe benefits, gross earnings on the project, gross earnings for all work, itemized deductions, and net pay.
Every certified payroll also includes a Statement of Compliance, signed by someone with firsthand knowledge of the payroll facts. The signer checks a series of compliance boxes confirming that workers were paid at least the prevailing wage, that the payroll is accurate and complete, and, where applicable, that apprenticeship programs and fringe benefit plans meet legal requirements. This signature carries legal weight: falsifying a certified payroll is a federal offense under 18 U.S.C. ยง 1001, which covers false statements to the government.
How Prevailing Wages Work
The prevailing wage is the combination of a basic hourly rate and fringe benefits for each job classification, set by the Department of Labor for the geographic area where the project takes place. Contractors must pay at least this total amount for every hour worked on the project site.
You have flexibility in how you meet that total. You can pay the entire prevailing wage as cash, or you can split it between cash wages and bona fide fringe benefits like health insurance, pension contributions, or vacation pay. If the prevailing wage for an electrician is $55 per hour ($40 base plus $15 fringe), you could pay $55 in cash, or pay $40 in cash and contribute $15 per hour to qualifying benefit plans.
Not everything counts as a creditable fringe benefit. Your own administrative costs for managing benefit plans cannot be counted toward the prevailing wage obligation, even if you outsource that administration to a third party. Benefits you’re already required to provide under other federal, state, or local laws (like mandatory paid sick leave) don’t count either. And if you use an unfunded fringe benefit plan, where the company self-funds benefits rather than making contributions to an outside fund, you need prior written approval from the Department of Labor before you can claim credit for those costs.
For contractors who provide fringe benefits across both prevailing-wage and non-prevailing-wage projects, the DOL uses a calculation called annualization. This averages the hourly cost of the benefit across all hours a worker puts in during a year, including hours on non-Davis-Bacon jobs. The result caps how much fringe benefit credit you can claim per hour on a covered project.
Submission Frequency and Record Keeping
Certified payroll reports are due weekly and must be submitted to the contracting agency. Workers on covered projects must also be paid on a weekly basis. Each report covers one workweek and must be submitted promptly, though the exact number of days varies by contracting agency. Some agencies accept electronic submissions through systems like LCPtracker or Elation Systems, while others still require paper forms.
Federal regulations require contractors to retain payroll records for three years after the project is completed. Keep the underlying documentation too: timesheets, pay stubs, benefit plan records, and any apprenticeship certifications. Auditors and investigators can request these records during or after the project.
Consequences of Non-Compliance
Certified payroll violations range from late or incomplete submissions to outright wage theft, and the penalties scale accordingly. At the lower end, a contracting agency may withhold progress payments until you submit corrected reports. If workers were underpaid, you’ll owe back wages for the difference between what was paid and the prevailing wage.
More serious violations carry harsher consequences. The contracting agency can terminate your contract for cause. The Department of Labor can debar a contractor, meaning the company and its principals are barred from bidding on any federally funded contracts for up to three years. Because the Statement of Compliance is a legal certification, intentionally submitting false information can result in criminal prosecution, with penalties including fines and imprisonment.
Prime contractors carry additional risk. If a subcontractor fails to submit certified payroll or underpays workers, the prime contractor can be held responsible for the back wages. This is why prime contractors typically require subcontractors to submit certified payrolls to them before forwarding the reports to the contracting agency.
How to Fill Out Form WH-347
Start with the header section: contractor or subcontractor name, project name and location, the contract number, and the payroll number (payroll #1 for the first week of the project, #2 for the second, and so on). Then enter each worker’s information on a separate row.
The classification column is where most errors happen. You must list the classification that matches the work actually performed that week, not the worker’s general job title. If a carpenter spends part of the week doing laborer work, you may need to show two classifications with the corresponding hours and rates for each. The wage rate you enter must meet or exceed the rate listed in the wage determination incorporated into your contract for that classification.
After completing the payroll data, fill out the Statement of Compliance on the reverse side of the form. Check boxes 1, 2, 3, and 6 on every submission. Check box 4 if apprentices worked on the project that week, and box 5 if fringe benefits are paid to approved plans or programs rather than in cash. Sign and date it, and include your title and the company name. Only someone with direct knowledge of the payroll facts should sign.
Who Typically Handles It
On smaller projects, the contractor’s bookkeeper or office manager usually prepares certified payroll. Larger contractors and those juggling multiple prevailing-wage projects often use specialized payroll software that auto-populates WH-347 forms from timecard and payroll data. Some construction payroll services handle the entire process, from tracking wage determinations to generating the weekly forms and managing electronic submissions to the contracting agency.
Regardless of who prepares the report, the legal responsibility stays with the contractor. The person who signs the Statement of Compliance is personally attesting to its accuracy, so most companies build an internal review step where a project manager or payroll supervisor checks classifications, hours, and rates before the form goes out.