Labor compliance can be a sticky business. Just ask the thousands of construction companies who have had to repay millions of dollars in back wages since the Davis-Bacon Act (DBA) and Davis-Bacon Related Acts (DBRA) went into effect decades ago. Regulating that compliance, whether by a government agency or as a prime/general contractor, can be just as complicated to navigate.
Similar Roles of Primes and Agencies
Prime contractors and agencies can share a bit of common ground as it relates to the process of ensuring construction workers are getting paid correctly. Government agencies clearly have obligations to regulate certified payroll reports (CPRs) on projects when federal, state, county, city, local, or any other agreement-specific funds are applied to projects.
Similarly, prime/general contractors can benefit from operating in the same way: as mini compliance enforcement agencies. Why? Because, as the prime contract holder on a project, if one of the subcontractors violates DBA/DBRA or any other prevailing wage laws, they are potentially on the hook. It’s not just the prime contractor’s employees that they need to worry about, it’s all the employees of every contractor working on the job.
One of the first questions of almost every beginner: do I need to be “certified” with a license to submit certified payroll reports? The answer is “no,” but it’s an understandable misconception. Let’s blame the genius who came up with the name.
Payroll mistakes, however, cannot be blamed on this prodigy. Contractors are typically held responsible, and clearly, it’s very easy and common to make mistakes – especially in an industry where regulations seem very convoluted to the average person. This is further exacerbated when there is no system in place that can check and validate data to alert contractors of violations before CPRs are even submitted.
Pitfalls of Monitoring Certified Payroll Reports
How do we make the process of collecting, reviewing, and accepting CPRs even easier? It starts with a cloud-based solution that validates contractors’ CPRs. A top-tier certified payroll software application will not only streamline the process of creating more accurate CPRs, but it will also drastically increase the administrative efficiency of governing bodies that need to collect these reports and monitor compliance. Here are some of the most common inefficiencies that agencies and primes struggle with:
Helping Contractors and Subcontractors Remain Compliant
Without a system that streamlines certification, contractors will continue to struggle with the time-consuming manual process of creating and tracking CPRs. They will also stay susceptible to errors that can lead to back wage payments, penalty fees, and other potential repercussions, up to and potentially including disbarment. Furthermore, if there are multiple requesting bodies for a project, a contractor will have to repeat the manual process multiple times to meet the individual requirements of each of the requested CPR formats. That’s why it’s important to choose a system with built-in Federal, State, and local report formats to “kill multiple birds with one stone”.
Collecting, Reviewing, and Accepting CPRs
The archaic methods of collecting paper CPRs and monitoring compliance are a waste of space, not to mention they result in ineffective and time-consuming back-and-forth communication. An integrated system can provide a centralized place where CPRs can be created and submitted by contractors, while also being reviewed and accepted/rejected by administrators. The contractor will then be able to rectify the issues and edit or resubmit CPRs.
Keeping an Archived Record
Another struggle is keeping a clean, organized record of all CPRs and compliance documents. This is especially important for contractors since they are required to keep access of archived records in the event of an audit. An online, cloud-based storage of records means easy access to all records for any agency, contractor, or auditing organization. It also means elimination of paper waste and physical storage.
The bottom line is, the more efficient that contractors are at remaining compliant, the more efficient the entire process becomes for governing bodies that regulate this compliance. Navigation of prevailing wage laws does not need to be as complicated as it has historically been for contractors, and it does not need to be the headache that it is for many administrators.