Tuesday, November 18, 2014

Receiving and Checking Certified Payrolls on Federally Funded Projects

One of the requirements that comes with federal funding of a public works construction project is the requirement for the public agency to receive and check weekly certified payrolls from the contractor and all subcontractors.  This process helps to ensure that all workers are being paid at least the prevailing wage rate for the classification of labor they performed. 

What should be monitored?  Because the federal Davis-Bacon Act (prevailing wage) requirements are applicable on all federally funded projects, state and local agencies need to have a process in place to ensure:
  • Timeliness:  Payrolls are received in a timely manner.  The Davis-Bacon Act requires that workers be paid weekly, and payrolls must be submitted to the agency weekly.
  • Completeness:  Payrolls must be received for the contractor and all subcontractors, regardless of tier.  This means that public agencies need to have an accurate process for identifying what subcontractors are working on the project.
  • Interviews:  The public agency must conduct field interviews of workers employed by the contractor and subcontractors to collect information on what they state they are being paid.  The results of these interviews must be correlated with the payroll reports submitted to determine if there are any discrepancies between what a worker states he or she is being paid and what the payrolls reflect they are being paid.

  • Review:  Payrolls must be reviewed and monitored on a weekly basis to identify any questions or potential underpayments of prevailing wage to workers.
Audit findings:  The following agencies were recently the subject of audit findings from the Washington State Auditor's Office for failure to collect and monitor prevailing wages on federally funded projects:
Mike Purdy's Public Contracting Blog
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