Small businesses often are the foundation of federally-funded projects. But even small businesses sometimes have to submit forms when they are working as subcontractors or contractors for payroll purposes. That’s because regulations, such as the Davis-Bacon Act, require subcontractors and contractors to follow certain rules to stay in compliance, and that’s where Form WH-347 comes into play.
Here are some important considerations small business owners who procure federal contracts should take into account when using Form WH-347.
What is Form WH-347?
The Davis-Bacon Act (DBA) enables those who work on federally-aided or federal contracts to receive a fair wage. As part of this requirement, contractors and subcontractors who hire mechanics and other laborers to work on their construction projections must submit a certified payroll on a weekly basis to the agency that oversees the federal or federally-funded contract.
The form provides a way for contractors and subcontractors to report important information, such as the hours worked, the type of work completed, gross earnings and deductions.
Why is Form WH-347 Important?
Form WH-347 is an important form because it is a requirement that must be fulfilled in order to stay in compliance with some statutes that apply to federally-assisted or federally-financed contacts. For example, under the Copeland Act, contractors and subcontractors are required to submit Form WH-347.
By following these rules, the government can ensure those who are working under these contractors are being paid fairly by the subcontractors and contractors who employ them. The form is also important helping verify that contractors and subcontractors are paying their workers fringe benefits for these federally-assisted contracted projects.
When Should Businesses Use Form WH-347?
Whether a contractor is working in construction to improve health, transportation or housing, Form WH-347 should be used when required by law. About 60 statutes have a prevailing wage provision in addition to the DBA. Another aspect that contractors and subcontractors should consider is where the project is being conducted. The DBA applies to the District of Columbia (D.C.) and all 50 states.
However, Form WH-347 is still required if contractors are conducting federally-aided construction projects in places, such as the U.S. territories, such as Puerto Rico or Guam, thanks to the requirements of the additional statutes that require prevailing wages. The primary indicator for using this form involves the contract amount. Any contract that is at least $2,000 or more and funded by the government or is a federal contract requires the submission of Form WH-347.
How to Find Form WH-347
Contractors and subcontractors can easily find Form WH-347 by visiting the Department of Labor’s (DOL) website and downloading the form under the Wage and Hour Division section. The DOL provides a PDF version of the form with instructions for filling the form out online or manually. The DOL estimates that the form takes about 55 minutes to complete.
Mistakes to Avoid
Contractors and subcontractors should pay attention to the details required to fill out the certified payroll form correctly. It is easy to overlook some of these details if the person filling out the form is not attentive to details. Some common mistakes to avoid when filling out Form WH-347 include:
- Using a non-compliant reporting system. While contractors and subcontractors have the option to use their own payroll system in place of Form WH-347, it has to be one that is compliant to the form. That means it should include all of the necessary information that is needed, including the name and address of the subcontractor or contractor, the last day of the payroll period, any overtime, the pay rate and the dates and days of the pay period.
- Numbering payrolls out of order. Subcontractors and contractors are required to use a sequential numbering system for payroll that is base don the weeks laborers work under the contract. For instance, the payroll form should list the week that the payroll ended and use a payroll number that follows the order of the previously submitted payroll number.
- Omitting the Project Number. Without the contract project number, it’s difficult to track the data from the certified payroll to ensure compliance. Thus, it’s vital that the primary contractor includes this information on Form WH347.
- Not Signing the form. This is a simple mistake that comes with huge consequences. The contractor’s or subcontractor’s signature officiates the form so that it is deemed certified once submitted and reviewed by the appropriate agency. So, it’s important for contractors and subcontractors to ensure they sign the form.
Procuring a federal contract or a contract that received government assistance often has stipulations to follow, including the need to submit Form WH-347. By understanding the basics behind Form WH-347, small business contractors and subcontractors can know when to use it and how to access it as well as what mistakes to avoid.
While subcontractors and contractors can use a “do-it-yourself” approach to handling certified payroll submission, it doesn’t have to be a solo process. Contractors and subcontractors also aren’t limited to using the form itself.
And business owners can take advantage of employee scheduling software with built-in payroll export and reporting services, such as Homebase, to help them stay in compliance.
Remember, this is not official legal advice. If you have any concerns, it’s best to consult an employment lawyer.