If your business takes on public or government-funded construction work, you have probably run into the term certified payroll—and maybe the stress that comes with it. Get it wrong and payments stall or penalties follow; get it right and it is just another routine part of the job. This guide breaks down what certified payroll and the Davis-Bacon Act actually mean, in plain English.
What is certified payroll?
Certified payroll is a special weekly payroll report that contractors and subcontractors must submit when working on many government-funded construction projects. It proves you paid every worker at least the required prevailing wage for their job classification. The report is filed on federal form WH-347 (or an approved equivalent) and includes a signed Statement of Compliance—which is what makes it “certified.”
In short: it is not just running payroll. It is running payroll and documenting, every single week, that you followed the wage rules for that project.
What is the Davis-Bacon Act?
The Davis-Bacon Act is a federal law requiring contractors on federally funded or assisted construction projects over $2,000 to pay laborers and mechanics no less than the local prevailing wages and fringe benefits for similar work. Many states have their own “little Davis-Bacon” laws that apply the same idea to state-funded projects. If your contract references Davis-Bacon or prevailing wage, certified payroll is almost certainly required.
What is a prevailing wage?
A prevailing wage is the hourly wage—plus fringe benefits—that the U.S. Department of Labor determines to be standard for a specific type of work in a specific area. Rates vary by job classification (an electrician, a laborer, and an equipment operator each have their own rate) and by county. You must pay at least the published rate for each worker’s classification and the hours they actually worked in it.
The WH-347: your weekly certified payroll report
Form WH-347 is where it all comes together. Each week, for every employee on the project, it captures:
- Name and an individually identifying number (such as the last four digits of their SSN)
- Work classification (carpenter, laborer, operator, and so on)
- Hours worked each day and total hours
- Rate of pay and gross amount earned
- Deductions and net pay
- Fringe benefits—paid in cash or into approved plans
It is signed with a Statement of Compliance certifying the information is correct and that everyone was paid properly. You submit it weekly—even for weeks with no work, which usually require a “no work” report.
Which projects require certified payroll?
Generally, you will need certified payroll on:
- Federal construction contracts over $2,000 (Davis-Bacon)
- Federally assisted projects—highways, schools, housing, water systems—funded through federal programs
- State and local public works projects covered by state prevailing wage laws
When in doubt, check your contract. If it mentions Davis-Bacon, prevailing wage, or a wage determination number, certified payroll applies.
5 certified payroll mistakes that cost contractors
- Using the wrong wage determination. Rates change and vary by county and classification—an outdated or wrong rate underpays workers and voids compliance.
- Misclassifying workers. Paying a skilled tradesperson at a laborer’s rate (or vice versa) is a common and costly error.
- Mishandling fringe benefits. Fringes can be paid as wages or into approved plans, but either way they must be tracked and reported correctly.
- Missing weekly deadlines. Reports are due weekly; gaps and late filings raise red flags and can hold up payment.
- Forgetting “no work” weeks. Between activity on a project, you often still owe a report stating no work was performed.
Why it matters: Certified payroll errors can trigger withheld payments, back-wage liability, fines, and—in serious cases—debarment from future government work. The paperwork is unforgiving, but entirely manageable with the right process.
How to make certified payroll painless
Certified payroll is less about difficulty and more about discipline: the right wage determinations, correct classifications, accurate fringe tracking, and a clean report every week without fail. That is exactly the kind of repetitive, high-stakes compliance work worth handing to a specialist.
At Side By Side Financial, certified payroll and Davis-Bacon reporting is a core specialty. We handle the wage calculations, fringe tracking, and weekly WH-347 filings so your projects stay compliant and your payments keep flowing—while you focus on the build. See our payroll & certified payroll services →