LCPtracker Blog

The New Age Contractor: Simplifying Certified Payroll

The Technological Shift

In the last few years, the construction industry has been undergoing a technological shift – not only out on the field, but within the office as well. Contractors and similar parties have turned to new technologies to streamline their processes of obtaining and tracking information. This shift has become increasingly vital to the longevity of any business, and construction companies are no exception.

A huge part of this movement has been the adoption of advanced, cloud-based software applications to help ensure compliance with labor laws and mitigate risk. Even as the Davis-Bacon Act approaches its 90th birthday, many contractors continue to struggle with labor compliance. In fact, according to the United States Department of Labor, there have been more than 119,000 violations resulting in over $197 million in back wages owed to construction workers since 1985.

Ouch! Penalties

Let’s face it: producing accurate Certified Payroll Reports (CPRs) and remaining compliant with all Federal, State, and local labor laws have been a headache for thousands of contractors for decades. And the penalties for not complying? An even bigger burden.

Not only will a failed audit or investigation result in enforcement of restitution payments to underpaid employees, but there’s also the potential for hefty fines. Often, contract payments will be withheld from the contractor until they have paid their employees what they are owed. Additionally, there is the possibility of further repercussions:

    • Contract termination on the project
    • Liability for associated costs that the government incurs resulting from the termination (project delays, rebidding costs, etc.)
    • Debarment for up to 3 years on future public contracts
    • Jail time in egregious or deliberate cases

Survival of the Fittest

As many employers have realized, continuing to manually create and file CPRs the “traditional way” is not going to cut it. Not only does this method cost you administrative time and money in a world that increasingly demands more of both, it still leaves you vulnerable to human error. The archaic methods of compliance through pen and paper are being phased out.

Maybe these frustrations sound familiar:

    • Countless hours spent manually filling out CPRs while adhering to federal, state, and local requirements
    • Tedious monitoring of data for errors, omissions, and accuracy
    • Filing and storing piles of paper work
    • Physically mailing duplicate documents to the appropriate requesting bodies
    • Re-entering the data through another medium for a specific requesting body (such as the California Department of Industrial Relations)

All these tasks take a contractor’s attention away from the core of their business… construction. How many times have you heard your project director or superintendent say, “I just want to build something, not do paperwork”?

Electronic reporting systems that streamline this entire process have been around for over a decade and a half now. Over the years, they have grown to become more efficient and versatile. So efficient, in fact, that the typical response from contractors after upgrading is: “Why didn’t we do this sooner?”

Certified Payroll Software for Contractors

There are many benefits to using a reliable, cloud-based software application to produce your certified payroll reports. A system like this will:

    • Streamline the process – cutting down the time it takes to produce and submit certifications for all requested formats
    • Mitigate your company’s risk profile by running automatic validation checks and notifying contractors of errors, omissions, and violations before submission
    • Include compatibility with payroll data providers to remove the manual data re-entry onto reports
    • Allow bulk CPR processing – so that contractors can generate numerous CPRs at once across multiple projects or multiple week-end dates
    • Include many Federal, State, and local CPR formats for multiple requesting bodies

Some contractors may have experienced using an application like this when required to do so under an agency or prime contractor’s multi-tiered account, per the project’s contract terms. However, for projects where there are no such requirements, subcontractors are still responsible to comply with Davis-Bacon and all other applicable prevailing wage laws. In these cases, there is a reliable and affordable single-contractor application out there for any contractor. (Note: For more info on the difference between multi-tiered and single contractor applications, check out this last blog post).

It’s also highly recommended to find a solution that allows you to try it out for free. Check out https://lcptracker.com/solutions/lcpcertified for more information on an application that offers a free single-project tier, allowing contractors to create unlimited CPRs for their first project at no cost.

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