Don’t Get in Trouble with Your Certified Payroll Report!
Eric shares what is a certified payroll, how to deal with it, and the things you should never forget when doing your payroll report so that you won’t get in trouble!
WHAT ARE CERTIFIED PAYROLL AND FRINGE BENEFITS?
A certified payroll report can be seen in request for proposal packages. These are usually mixed in a hundred pages document that is not entirely relevant to whether you will be making a bid or no-bid decision. However, this will then be important once you get awarded the contract.
Meanwhile, inside your particular report, you will also need to include the fringe benefits or the additional benefit beyond the actual rate that you pay for your employees. These can either be in cash, 401k, health insurance, and cars or gas reimbursements, among others. If you want to know the list of the allowable and unallowable fringe benefits, then you can easily check that online.
HOW TO DEAL WITH PAYROLLS?
When you are starting out as a solopreneurs or you have two or three employees with you, doing payrolls really becomes a nightmare. However, you can easily track your payrolls by doing it in a spreadsheet format rather than a PDF.
In this case, you can just easily check your employees’ data and fill or even copy and paste the information, especially if the numbers are just the same.
“So, that’s something that I did. Worked out great for me and I was able to crank out, pay reports really, really quickly and really, really easily because these the document that they give you is a like a PDF document and unless you’ve got a PDF editor and even still a PDF editor, you can’t copy and paste that information for next time. So, I just recreate this document in Excel and it’s like boom, boom, boom, boom!”
Another use of this spreadsheet is that when you have no work for a week or more, you can just put a “No Work” note above it or where it can easily be seen. Remember, regardless if you have work or not, you still have to submit a certified payroll report.
“This was not like common knowledge or a common understanding. It’s like, ‘Well, we’re not working so why do we need to pay a report and I don’t know why the girl makes us do it.’ They do. And again, it will hold up your money, anything that holds up your money, I don’t want to do it.”
Most importantly, consider that any payroll mistakes affect the state of your contract payment. You might not be blacklisted by the government but you won’t really get paid.
“So, it’s not about black marks, you don’t get your money, like you can’t, they don’t pay you on your contract because the payroll is wrong and that’s the important part of it. And the same thing when you’re a prime. If you are a prime and your payroll is wrong, the government won’t pay you. So, you have to be conscious of that.”
THINGS TO REMEMBER!
1. Don’t be secretive of your contract information.
Provide the necessary information to your subcontractor or employees for them to make the full and right decisions in doing the contract. Besides, if there is any information that you didn’t tell them, they won’t be held accountable for anything because of that.
“I believe that everyone should inform their contractors, the people that are going to be working on a job, that there are federal guidelines in terms of the wages that you must pay your employees and that you expect them to adhere to those guidelines. Because if they fail to meet the guidelines, then when you submit it to the government, it’s going to delay payment for all parties.”
2. Payroll payments vary in different areas.
You cannot assume that every payroll payment in every area is the same because these have different rules and regulations being established.
Also, you can work in the same agency or base but you may fall into an old payroll report or into a new payroll report, depending on the time and circumstances that your contract was made.
So, instead of just going directly in sending your payroll report, do your research first or ask the necessary people, because doing this will really put your money on hold.
“Do not make any assumptions about the wage rates because you could really get yourself in trouble making assumptions. We always know when you make an assumption, you make a what out of yourself? Assess.”
3. You don’t need a DCAA compliant accounting system.
You do not need to have a DCAA compliant accounting system or any other tools to help you with your payroll, you just have to know what the necessary rules and numbers are.
There might be a certain point where you need these kinds of things but for this instance where you are just starting in the marketplace, you need to learn and look for contracts first rather than just throwing your money down the drain.
“You know if you don’t have a contract, what difference does it make that you’re DCAA compliant or if you’re not anticipating a contract that triggers that action, then what difference does it make?”
4. The government is always checking if you’re fair.
One simple mistake in your numbers or in classifying your employees will cost you a lot of trouble because even how little that number is, the government will call you and ask you to do all of the necessary paperwork in order to pay your employee.
“So, they do check. Don’t try to be slick. Don’t like— Trust me, whatever you’re thinking, somebody else has already tried it. The government— Somebody else has come before you and said, ‘I’ll just classify them at this lower level and then that way I could save two bucks an hour times 30 per guy over a six month contract.’ You save yourself 20, 30, 40, thousand, and you get caught in a mix and now you’re having to do this restitution form like I had to do and pay back back wages.”
5. If you don’t understand something, call the Department of Labor.
Let’s say you’re a nuclear physicist but when you look at your papers, it doesn’t tell anything about your work. In this case, you can check beta.sam for the list of the wage determination and its rates.
However, if it still doesn’t have anything related to your work or you just want to confirm the numbers, then you can just call the Department of Labor. Tell them your project, send the particular document that came with your contract, and other things they might need.
If you want to learn more on what is inside of a certified payroll, how to deal with it, and the things you should never forget when doing your payroll report, then be sure to click the resources below.
How to do fill out certified payroll correctly and what to exclude
Davis Bacon Wage Act explained along with example forms – Eric Coffie