Certified Payroll Reporting: A Step-by-Step Guide for Subcontractors
For subcontractors new to federally funded construction, certified payroll reporting can feel overwhelming. This guide walks through the WH-347 form, common classification errors, and how to submit on time every week.
Stephanie Ramirez
CEO & Founder, S&R Industrial Contract Consulting
What Is Certified Payroll and Why Does It Matter
Certified payroll is a weekly report that every contractor and subcontractor performing work on a federally funded construction project must submit. It documents the name, classification, hours worked, and wages paid to every worker on the project for that week — and certifies under penalty of law that the information is accurate and that all workers were paid at least the applicable prevailing wage.
Failure to submit certified payroll on time, or submitting reports with errors, is one of the most common causes of pay application holds and audit findings on federal projects. For subcontractors, it can also result in the general contractor withholding payment until compliance is resolved.
The WH-347 Form: What Each Section Requires
The WH-347 is the standard certified payroll form issued by the Department of Labor. Section I covers the project information: contract number, project name, funding agency, and the week ending date. Section II is the payroll table, where you list each worker by name, last four digits of their Social Security number, work classification, hours worked each day, total hours, rate of pay, gross wages, deductions, and net wages.
Section III is the Statement of Compliance — the certification that the information is accurate and that all workers received at least the prevailing wage for their classification. This section must be signed by an authorized company representative, not a payroll clerk or project manager without signing authority.
Worker Classification: The Most Common Error
Misclassifying workers is the leading cause of certified payroll deficiencies. The wage determination attached to your contract lists specific trade classifications — Carpenter, Laborer, Ironworker, Electrician, Plumber, and so on — each with its own prevailing wage rate. Workers must be classified based on the work they actually perform, not their job title or the classification that carries the lowest wage rate.
A worker who spends the majority of their time performing carpentry work must be classified as a Carpenter and paid at least the Carpenter prevailing wage, even if your company calls them a 'general laborer' on your internal payroll. Misclassification discovered during an audit results in back wage calculations for the entire project duration.
Fringe Benefits: Cash vs. Bona Fide Plans
The prevailing wage rate on your wage determination includes both a base wage and a fringe benefit amount. You can satisfy the fringe benefit requirement in two ways: pay the full fringe amount as additional cash wages on top of the base wage, or contribute the fringe amount into a bona fide benefit plan (health insurance, retirement, vacation, etc.) that meets DOL requirements.
Many subcontractors make the mistake of counting the cost of their existing benefit plans toward the fringe requirement without verifying that those plans qualify as bona fide under DOL standards. If your benefit plan does not qualify, the full fringe amount must be paid as cash wages.
Submitting on Time: Weekly Deadlines and Electronic Systems
Certified payroll must be submitted weekly, covering the work performed in the preceding week. Most funding agencies require submission within seven days of the week ending date. On projects using Elation Systems or LCPtracker, submissions are made electronically through the platform — paper WH-347 forms are not accepted on these projects.
Set a recurring internal deadline for payroll data collection that gives you time to review and correct errors before the submission deadline. A common approach is to close payroll on Friday, review on Monday, and submit by Tuesday. Waiting until the last day of the submission window leaves no time to correct errors.
Need Help With Compliance on Your Project?
S&R provides hands-on federal labor compliance support for developers and general contractors on HUD, GLO, TDHCA, and City-funded projects.