Certified Payroll and The Fringes

Whenever you are involved with projects where government funds are being used, you will most likely be required to pay Davis-Bacon or prevailing wages.  You will also be required to prepare Certified Payroll Reports.

You only have two options when you are faced with these reports:

1. Prepare these reports and run through the pages and pages of requirements and face the learning curve that could hold up your funds until they are correct, or
2. Call someone who knows what is required from the beginning of the project to prepare these reports for you and get paid quicker.

Preparing these reports requires that you understand the items that you can deduct from the required fringe pay (where applicable) and what you cannot deduct from these same fringes.  And all the wile, your funds from the government could be held up until these reports are completed.  Bad for cash flow.

If you are required to pay a fringe per hour on top of the regular wages, you have to know what is allowed.  Some of the items allowed are:

• Uniforms paid for by the company on behalf of the employee
• Health, Dental, Life & Vision Insurance paid by the company on behalf of the employee
• Union dues paid on behalf of the employee by the company

You should see a pattern here -- you can only deduct items that the company pays for the employee that the company gets no benefit from at all.

Some of the items you cannot deduct as fringes are:

• Cellular phones that the company pays for and the employee carries
• Company vehicles
• Per Diem pd to the employee
• Hotel or housing paid for by the employer while an employee is working out of town
• Fuel re-imbursement

There is a common theme here as well.  These are items that you would pay on behalf of your employee whether they were on a government project or not.   If you had employees working out of town, you would have to put them up in a hotel or other housing and so it is not deductible as part of the fringes.

Our company has a lot of experience with certified payroll or Davis-Bacon Wages.  If you find yourself in a situation where you need assistance with certified payroll reports, contact us -- we can help.

Also,  take a look at my book -- it covers certified payroll reporting and lots of other things that you will need to know to run a successful construction company.

Until tomorrow,

Charlene S. Reed, Owner/ Author

Responsible Business Services

www.MyConstructionOffice.com

"Construction Administration Handbook"