Top 7 Mistakes People Make with Certified Payroll Reporting Compliance (And How to Avoid Them)
Jessica Helms
Last update on:
July 18, 2025 9:42 AM
Published on:
TL;DR:
Certified payroll mistakes are costly and common, from outdated wage rates to worker misclassification. This article covers 7 key pitfalls and how to avoid them using tools like Timeero and Points North to automate tracking, classification, and reporting.
Monday morning rolls around and it’s back to the daily grind. Every week it’s the same routine.
10,000 browser windows open
Stacks of unfinished paperwork left to tackle
Excel spreadsheets galore
Consistently checking government websites for project updates
It’s exhausting.
On top of all of the administrative duties you’re already handling, you’re required to keep extremely detailed records of your employees’ work hours and job activities for weekly certified payroll reporting.
But, no pressure – right?
You might turn to expensive payroll software to help alleviate some of the burden, but standard payroll software systems aren’t made to handle certified payroll. Most contractors miss that memo and find themselves in a heap of trouble with government agencies.
In this article, we’ll discuss the 7 most damaging mistakes contractors make with certified payroll compliance and provide you with practical, implementable solutions for each.
Certified Payroll Doesn’t Have to Be a Headache.
Discover how Timeero simplifies compliance and saves you hours.
Mistake #1: Using outdated or incorrect prevailing wage rates
Where many contractors see compliance issues is in matters involving prevailing wage rates.
Why is that so?
Prevailing wage rates change frequently. Whatever rate you are paying employees at the time your contract period begins may change mid-project depending on location, trade, and project type.
Here’s a breakdown of how frequently rates change based on project type, as well as the sources contractors should use to catch prevailing wage rate updates as they happen.
Type of Project
Frequency of Prevailing Wage Rate Updates
Where to Monitor Prevailing Wage Rate Changes
Federal Projects
The prevailing wage rate set at time of bid or contract award typically remains fixed throughout the lifetime of the project
Contractors working on federal projects will want to monitor SAM.gov and the DOL website
State and Local Projects
Prevailing wage rates change more frequently depending on the state. For example, California’s prevailing wage rates are usually updated twice a year.
Contractors working on state or local projects will want to monitor individual state portals and county-specific sites
The consequences of using outdated or incorrect prevailing wage rates are extremely costly. To avoid fines, wage restitution, and the risk of debarment, it’s important to develop an effective system for rate verification. With technology such as Points North, you can automate your rate verification process and reduce the chance of missing real-time wage updates.
Mistake #2: Worker misclassification
It’s not uncommon to see workers completing tasks outside of their primary trade when working on a large-scale project. While switching between skilled trades isn’t a problem, it can be difficult for general contractors to keep up with the changes for classification purposes.
This is where having an in-field daily classification system in place would be highly beneficial.
Workforce management solutions like Timeero allow contractors to automatically track and document how much time each employee spent on specific tasks during their shift so you can spot misclassifications before they make it to payroll.
Workers can switch between job-related tasks as many times as they need to throughout the day.
Timeero gives workers the ability to seamlessly switch between tasks without ever needing to clock out.Each time they switch tasks, Timeero creates a time entry for that task within their timesheet.
At the end of the week, you can pull reports for individual employees that displays how much time they spent working on each job or task for accurate classification.
Generate custom reports and filter by user to view time entries for each job or task.
But let’s throw an even bigger curveball in the classification game.
Registered apprentices.
The new WH-347 form requires specific documentation for registered apprentices. Contractors are asked to provide program details and ratios, which many times they aren’t prepared to supply.
With Timeero’s Custom Fields, contractors can gather the details they need about registered apprentices for their weekly certified payroll report conveniently within the app.
Generate custom reports and filter by user to view time entries for each job or task.
Mistake #3: Fringe benefit calculation errors
Converting annual benefit costs to hourly rates can be a challenge.
Here’s why.
Contracted workers may be covered by both company and union benefits, which means you’ll need to calculate the yearly benefit amount from each source.
Projects may also have different fringe requirements. So if you’re overseeing more than one project – which most likely you are, you’ll need to create a standardized template to track and calculate fringe credits across all projects.
Prevailing wage projects require you to document on certified payroll reports how much of an employee’s hourly rate is wage related, and how much is fringe benefits. To protect your business, keep all records that show how you determined the fringe benefit amount in case of an audit.
As certified payroll software, Points North helps you reduce fringe benefit calculation errors by automatically calculating the hourly value of each fringe benefit based on the annual total. The software then logs and stores each employee’s benefits along with converted hourly rates for accurate certified payroll reporting.
Mistake #4: Inadequate record-keeping
Prevailing wage projects are held to a high standard. And this doesn’t apply to completed infrastructure alone.
The government expects contracted companies to be reputable and trustworthy. Inadequate documentation and poor record keeping practices are the fastest way to make certified payroll mistakes.
Government agencies conduct periodic audits on contracted companies to ensure they are following federal and state labor laws and providing workers with fair and adequate pay. But payroll records aren’t enough to prove compliance.
To stay audit-ready, contractors will need to:
Maintain wage determinations
Keep proof of fringe benefit payments
Provide evidence of required workplace postings
Accurately document and store daily time cards
There are several approaches you can take to provide evidence of compliance during an audit, but the most popular is to implement compliance technology.
Timeero and Points North work together to provide contractors with a unified system to track and document employees’ work hours and wage related information for certified payroll compliance.
Generate employee timesheets in Timeero and export the CSV files directly into Points North.
Mistake #5: Report submission struggles
Aside from the federal WH-347 form, contractors may be required to submit state-specific forms and navigate additional systems like California’s eCPR system.
Many state forms have their own requirements and often involve multiple steps prior to submission. To help contractors keep up with the specifics of each form, Points North generates payroll-ready WH-347 reports, eCPRs, and other state forms automatically.
The challenge of certified payroll reporting is that not every state accepts the same forms.
As of 2024, only 11 states accept the WH-347 and 28 states require multiple agency-specific or electronic formats for certified payroll.
When highway projects span multiple counties, you may encounter different prevailing wage rates in each locale.
How do you know which prevailing wage rate you should use?
The ruling is that for Federal Davis-Bacon projects in states or counties with their own prevailing wage laws, companies must comply with whichever standard is higher.
For example, if Morgan County, AL requires workers to be paid at $50/hour and Limestone County, AL has an established prevailing wage rate of $45/hour, if the highway project spans both counties, you must pay workers $50/hour when they cross over and begin working in Morgan County.
Managing overlapping jurisdictions can be complex. Here are two strategies you can use to better comply with prevailing wage rate laws.
Create a project-specific table or spreadsheet that lists each compliance component per jurisdiction and how to successfully satisfy each requirement.
Utilize technology like Timeero that leverages GPS-tracking technology to pin-point when workers crossed county lines to track hours per location so you can apply the correct wage rate and fringe credit.
Mistake #7: Over-Reliance on General Payroll Systems
Make no mistake about it, the information that contractors have to keep track of to comply with prevailing wage laws and certified payroll requirements is overwhelming.
Many companies invest tens of thousands into payroll systems that they assume can be used to run certified payroll, only to find out standard payroll software doesn’t have the ability to handle prevailing wage.
Frustrated, they may create manual Excel spreadsheets with complex formulas to run certified payroll. Not only is this time consuming, it leaves room for error – which is a big no-no when working on government funded projects.
Instead of inputting data into spreadsheets daily, replace costly and labor intensive payroll methods with an automated time tracking solution along with certified payroll software.
Time tracking software like Timeero handles calculating employees’ work hours and uses GPS technology to provide verifiable payroll and audit-ready reports, while Points North automates weekly certified payroll tasks, such as calculating fringe benefits, applying prevailing wage rates, and generates completed WH-347 forms.
Conclusion
Aside from fines and lawsuits, non-compliance harms your chances at securing future projects and damages your company’s reputation. If you feel that your company is at risk of non-compliance, explore the top 7 mistakes people make with certified payroll compliance and develop an improvement plan to strengthen your internal processes.
Whether you start with a simple rate verification checklist or a comprehensive technology evaluation, the important thing is to begin transforming certified payroll compliance from a weekly burden into an automated process.
Simplify Davis-Bacon compliance with the right tools. Capture the certified payroll data Points North needs when you leverage Timeero’s automated GPS time tracking capabilities.
About Points North:
Points North’s Certified Payroll Reporting solution is purpose-built for prevailing wage and union compliance. Seamlessly integrating with major timekeeping tools like Timeero and popular payroll systems, it automates complex certified payroll requirements, saving contractors hours each week.
Stop Drowning in Spreadsheets.
Timeero automates certified payroll tracking so you can focus on the job.
Jessica is a skilled writer and proofreader with a unique flair for crafting engaging and impactful content. Her work reflects her ability to connect with clients on a personal level while successfully addressing their most pressing concerns. Jessica's professional background includes: teaching, social media marketing, and e-commerce. She resides in Alabama and loves the Golden Girls sitcom.
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