Generating weekly certified payroll reports when you issue bi-weekly paychecks to your employees can be difficult unless your accounting software will accurately accrue the wages for each week – QuickBooks doesn’t have this ability and quite often this causes problems.
Payroll is one of the largest expenses that a company will have. Most companies, when they start up, will find out what the minimum requirements for paycheck frequencies are for the state that their business resides in – earlier this week we discussed paycheck/payroll frequencies by state – and they will follow those rules. This will work fine unless you are a contractor who makes the move to Public Works/Government Construction projects and become subject to prevailing wage laws. This is when problems can occur.
Under the Federal Davis-Bacon and related Acts; contractors and subcontractors performing work on Federal or Federally-aided construction-type contracts are required to submit weekly payrolls. The Copeland Act provides further/clearer requirements; indicating that contractors and subcontractors performing work on Federally financed or assisted construction contracts “furnish weekly a statement with respect to the wages paid to each employee during the preceding week”.
Obviously, contractors and subcontractors who issue their payroll on a weekly basis find the necessary information easier to obtain; therefore, making compliance of certified payroll reporting easier on the people who actually have to complete the reports.
What happens when your company is subject to the rules found in the Davis-Bacon and the Copeland Act and you issue your payroll on a bi-weekly basis?
I’m not here to tell you that you HAVE to start issuing your paychecks on a weekly basis – I’m only here to tell you what the requirements are and about what COULD happen – based on my experience; so that you can make an informed decision.
If you are lucky enough to have an accounting program that accurately accrues and distributes payroll taxes and wages based on when it is earned rather than when it is paid – you shouldn’t run into any issues when you create the certified payroll reports. BUT, if you use QuickBooks you need to be aware that it does not have this ability and your payroll is recognized only when you actually issue the paycheck and this is where the problem with your certified payroll reports COULD begin.
Each certified payroll report has a weekly calendar section {shown below} where by day and date you enter the number of hours that each employee worked on the prevailing wage job site and the total hours that he/she spend there during the entire week.
When you issue payroll in QuickBooks on a bi-weekly basis – you will enter the time worked for each of the two separate workweeks in two individual timesheets, for example, let’s say that your pay period ends on a Saturday:
- Your first work week covers Sunday, December 21, 2003 through Saturday, December 27, 2003
- Your second work week covers Sunday December 28, 2003 through Saturday, January 3, 2004
- Your paychecks will be dated on January 7, 2004
Below are the two timesheet entries from QuickBooks:
- Workweek 1 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job
- Workweek 2 has 24 hours on the Prevailing Wage Job and 16 hours on a non-prevailing wage job.
Next, we’ll look at the QuickBooks paycheck detail, you’ll see that the total number of hours are accurate for the full two weeks.
- A total of 48 hour at $28.50 per hour for $1,368.00 in wages for the prevailing wage job
- A total of 32 hours at $28.50 per hour for $916.00 in wages for the non-prevailing wage job
- Total gross for the 2 week period of $2,280.00
- Net wages for the week $1,528.33
When you create or run your certified payroll reports {whether is is with our Certified Payroll Solution software or using the built-in QuickBooks certified payroll report} you’ll need to generate two individual reports; one for each week. This is what the reports will look like:
- Week 1 – the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
- Week 2 – again, the hours are correct {24} and the rate of pay is correct {$28.50} BUT the gross amount earned This Job/All Jobs represents the FULL amounts from the bi-weekly paycheck {$1,368.00/$2,280.00} instead of $684.00 this job/ $1,140.00 All Jobs which was actually earned for this specific workweek.
Is this wrong? Well, sort of; the laws do indicate that payroll should be reported {therefore, issued} for the preceding week.
What can you do if you issue payroll on a bi-weekly basis?
Many of our own customers issue payroll on a bi-weekly basis, and on the Statement of Compliance {in the Remarks section} they add a note that indicates that they issue paychecks on a bi-weekly basis and while the certified payroll report accurately reflects the correct number of hours worked on the job for the specified week; gross amounts earned This Job/All Jobs, deductions {including taxes and other withholdings} and Net Pay reflect the full amounts from the single bi-weekly paycheck.
Will this statement keep you out of trouble?
Not necessarily, it all depends on the Contract Administrator and Awarding Agency.
The best thing to do, in my opinion, is to just bite the bullet and issue your payroll on a weekly basis; at least for the employees who work on the prevailing wage projects. This may mean some additional planing and scheduling on your part, but it’s easier than having your certified payroll reports rejected and having to manually calculate the gross, taxes, deductions and net pay and resubmit the reports!
Look for similar articles next week on how a semi-monthly or monthly payroll run will affect your certified payroll reports.
I hope that you’ve found this article to be informative and helpful in making informed decisions for your business; if so please take a moment to leave a comment or to share this with others on your favorite social networking platform using the buttons below.
QuickBooks, while a great software program, is a “generic” accounting program. Even though there is a “Contractor version”, it was designed to meet the needs of all types of contractors – from the home handyman to a general contractor. Only through the use of QuickBooks integrated add-ons will you find that it then becomes a viable substitute for the more costly construction specific accounting programs available.
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We’ll teach you the things you need to know about using QuickBooks, that you won’t find in the QuickBooks Help file, in order to successfully run your construction business and obtain accurate job costing reports; from eBooks, live webinars, and recorded training sessions.
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Choosing QuickBooks and QuickBooks Add-Ons for Your Construction Business
Whether you currently use QuickBooks or are thinking of using QuickBooks for your construction accounting package you need to be aware that QuickBooks, while a great software program, is a “generic” accounting program and will not do everything that you may need it to for your business by itself, unlike more expensive construction specific software.
If you are like most contractors, you probably do not think of yourself as a “computer hardware/software expert’. In fact, when faced with the thought of purchasing new computers and/or software to automate critical, time consuming tasks within your business, you end up feeling overwhelmed. Many contractors end up turning the project over to someone else. This unfortunately, is one of the major reasons that this type of project fails.
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Minimum payroll frequencies are determined by each state and can be quite confusing. I’m often asked “How often do I have to pay my employees” during a Certified Payroll Training Webinar. State minimum paycheck frequencies are shown below – this information comes directly from the U.S. Department of Labor’s website.
It’s difficult to thoroughly cover the requirements of all 50 states in a 2 hour webinar, but it has crossed my mind that a series of blog posts on the differences between what State Laws are for how often payroll must be generated and how that can effect the generation of a certified payroll report would be a good thing to do. While I could have simply started this series and talked about the complexities of generating certified payroll reports when issuing employee payroll on anything other than a weekly basis – I first wanted to display the requirements by state, rather than just put off a link to the U.S. Department of Labor website.
Under the Federal Davis-Bacon and related Acts; contractors and subcontractors performing work on Federal or Federally-aided construction-type contracts are required to submit weekly payrolls. The Copeland Act provides further/clearer requirements; indicating that contractors and subcontractors performing work on Federally financed or assisted construction contracts “furnish weekly a statement with respect to the wages paid to each employee during the preceding week”.
Obviously, contractors and subcontractors who issue their payroll on a weekly basis find the necessary information easier to obtain; therefore, making compliance simpler to obtain.
State |
Weekly |
Bi-Weekly |
Semi-Monthly |
Monthly |
| Alaska | X | X | ||
| Arizona | X 3 | |||
| Arkansas | X | |||
| California | X 9 | X 9 | X | |
| Colorado | X | |||
| Connecticut | X 4 | |||
| Delaware | X | |||
| District of Columbia | X | |||
| Georgia | X | |||
| Hawaii | X | X 5 | ||
| Idaho | X | |||
| Illinois | X | X 2 | ||
| Indiana | X | |||
| Iowa | X | X 6 | X | X |
| Kansas | X | |||
| Kentucky | X | |||
| Louisiana | X | X 7 | ||
| Maine | X 8 | |||
| Maryland | X | |||
| Massachusetts | X | X | ||
| Michigan 9 | X | X | X | |
| Minnesota | X 10 | |||
| Mississippi | X 11 | X 11 | ||
| Missouri | X | |||
| Montana 12 | ||||
| Nebraska 13 | ||||
| Nevada | X | X 2 | ||
| New Hampshire | X | |||
| New Jersey | X | |||
| New Mexico | X | X 2 | ||
| New York | X 14 | X 14 | ||
| North Carolina 15 | ||||
| North Dakota | X | |||
| Ohio | X | |||
| Oklahoma | X | |||
| Oregon | X | |||
| Pennsylvania 13 | ||||
| Rhode Island | X 16 | |||
| South Dakota | X | |||
| Tennessee | X | |||
| Texas | X | X 17 | ||
| Utah | X 18 | |||
| Vermont | X | X 19 | X 19 | |
| Virginia | X 20 | X 20 | X 2 | |
| Washington | X | |||
| West Virginia | X | |||
| Wisconsin | X | |||
| Wyoming | X |
- Alabama and South Carolina – No regulations or not specified.
- Illinois, Nevada, New Mexico and Virginia – Monthly payday requirements for Executive, Administrative, and Professional personnel.
- Arizona – Payday two or more days in a month, not more than 16 days apart.
- Connecticut – Longer interval (up to monthly) permitted if approved by Labor Commissioner.
- Hawaii – Employees may choose to be paid on a monthly basis under special election procedure. Director of Labor and Industrial Relations also may grant exceptions to the general semi-monthly payday requirement. Payday requirement applies only to private sector employment.
- Iowa – Any predictable and reliable pay schedule is permitted as long as employees get paid at least monthly and no later than 12 days {excluding Sundays and legal holidays} from the end of the period when the wages were earned. This can be waived by written agreement; employees on commission have different requirements.
- Louisiana – Applicable to entities engaged in manufacturing, mining, or boring for oil, employing 10 or more employees, and to every public service corporation. Payment is required once every two weeks or twice during each calendar month.
- Maine – Payment due at regular intervals not to exceed 16 days.
- California and Michigan – Frequency of payday depends on the occupation.
- Minnesota – Employees engaged in transitory employment, i.e. migrant workers, which require and employee to change the employee’s pace of abode, because the employment is terminated wither by the completion of the work or by the discharge or quitting of the employee must be paid within 24 hours.
- Mississippi – Applicable to every entity engaged in manufacturing of any kind in the State, employing 50 or more employees and employing public labor, and to every public service corporation doing business in the State. Payment is required once every two weeks or twice during each calendar month.
- Montana – Wages must be paid within 10 business days after the wages are due and payable.
- Nebraska and Pennsylvania – Payday designated by employer.
- New York – Weekly payday for manual workers. Semi-monthly payday upon approval for manual workers and for clerical and other workers.
- North Carolina – None specified, pay periods may be daily, weekly, bi-weekly, semi-monthly or monthly.
- Rhode Island – Childcare providers shall have the option to be paid every two weeks.
- Texas – Monthly payday for employees exempt from overtime provisions of the Fair Labor Standards Act.
- Utah – Payments are to be paid at regular intervals but in periods no longer than semi-monthly.
- Vermont – Employers may implement bi-weekly and semi-monthly payday with written notice
- Virginia – Employees whose weekly wages total more than 150% of the average weekly wage of the Commonwealth may be paid monthly, upon agreement of each affected employee.
NOTE: South Carolina – Employers with 5 or more employees are required to give written notice at the time of hiring to all employees advising them of their wages agreed upon, and the time and place of payment along with their expected hours of work. The employer must pay on the normal time and at the place of payment established by the employer.
Stay tuned over the next week to find out some of the problems that can occur when a company follows various state payroll requirements {bi-weekly, semi-monthly, and monthly paychecks} and how the pay frequencies affect the submission of their certified payroll reports.














