LCPtracker Blog

Multi-Tiered vs. Single-Contractor Certified Payroll Solutions: What’s the Difference?

There comes a time in every young contractor’s life when they’re faced with the question: Should we consider working on publicly-funded projects?

Whether that time is now or had occurred several years ago, contractors know the implications of such a decision. Understandably, there’s often hesitation before taking on a public works project. We get it. Davis-Bacon and prevailing wage compliance doesn’t exactly elicit the most excited response.

However, as scary and convoluted as it might seem on the surface, prevailing wage compliance isn’t the nightmare it once was prior to the digital revolution. And if a contractor is looking for an electronic certified payroll solution, there are a few things they should understand.

It’s Not a “One-Size-Fits-All”

First thing’s first. You should know that there are two main categories of compliance solutions that will help with certified payroll: multi-tiered and single-contractor. Each one is catered to a specific type of user-base and priced accordingly. So, it’s important to make sure you are looking at the right solution to fit your needs.

Multi-Tiered Solutions

A multi-tiered system allows the entity that purchases the software to set up multiple user roles. This enables them to establish a hierarchy of users under one account – from administrators and approvers, to prime contractors, subcontractors, lower-tier subs, and so on.

While one of the many functions of a multi-tiered system is to allow contractors to streamline the process of creating and submitting certified payroll reports, this application is catered more towards the entities collecting those reports. Therefore, this solution is ideal for requesting bodies higher up on the chain that need to manage and monitor all aspects of labor compliance, like government agencies or general/prime contractors.

The Contractor’s Experience with Multi-Tiered Solutions

Multi-tiered solutions are also known to be complete labor compliance management tools, meaning they do more than just certify payroll. Because of this, subcontractors are generally not the ones purchasing this type of solution. They simply use it because they are required to do so under the agency or prime contractor’s purchased account. Consequently, they are subject to playing by the administrators’ rules.

The admins on the account (typically the agency or prime contractor) create the settings and customize the contractor requirements. As a result, contractors that don’t understand this might have complaints with these applications that actually stem from the admins’ specifications. This can occur when contractors are not previously made aware of these requirements, or when the requesting body has not adequately explained the reasons for them.

Single-Contractor Solutions

The second kind of certified payroll solution is a Single-Contractor application, and they are designed specifically for the contractor. As the name suggests, when a contractor chooses this type of solution, it can only be used by that one contractor. They own the account and have full control. There’s also only one user role, and the main purpose of the application is to help streamline the creation of complete and accurate certified payroll reports. The contractor can then submit these to any requesting body.

This kind of application is ideal for any prevailing wage project the contractor is working on – provided that the project owner has not already mandated the use of a multi-tiered solution for the project. Because of this, it’s entirely possible for a contractor to be using a single-contractor application on some projects, and a multi-tiered solution on others. It would just depend on whether the agency or prime has already purchased a multi-tiered system for its project.

You can find more information about this kind of application by visiting https://lcptracker.com/solutions/lcpcertified.