After working with hundreds of contractors on their certified payroll processes, we have seen clear patterns in what separates companies with clean compliance records from those that end up in DOL investigations. The difference usually is not intent. Most contractors want to comply. The difference is process.
Here are the best practices that keep contractors out of trouble and the worst practices that lead to costly mistakes.
Best Practices
1. Maintain Complete Records from Day One
The DOL requires contractors to maintain payroll records for three years after project completion. But best-in-class contractors go further. They maintain organized, accessible records that include not just the WH-347 forms but also the underlying payroll data, wage determinations used, fringe benefit documentation, and any correspondence with contracting agencies.
The reason is simple: if you are ever investigated, having thorough records is your strongest defense. The DOL's Field Operations Handbook instructs investigators to review payroll records against certified payroll submissions. When your records are complete and consistent, investigations close quickly. When they are not, investigations expand.
Digital record-keeping makes this significantly easier. Platforms like CertifiedPayrollPro automatically maintain an audit trail of every payroll entry, edit, and submission, which is exactly the kind of documentation that satisfies DOL investigators.
2. Use Software Designed for Certified Payroll
General payroll software is designed for standard payroll processing. It does not understand prevailing wage requirements, fringe benefit obligations, or the WH-347 format. Using the wrong tool for the job is like using a hammer to drive screws. You can make it work, but the results are not great.
Dedicated certified payroll software provides compliance validation, automatic wage determination lookups, proper fringe benefit calculations, and submission-ready form generation. These features prevent the most common errors before they happen. The investment is minimal compared to the cost of a single violation.
3. Train Your Staff on Davis-Bacon Requirements
The person preparing your certified payroll needs to understand more than just how to fill out a form. They need to understand why each field matters, what the wage determination requires, how fringe benefits are calculated, and what constitutes a violation.
The DOL offers free compliance resources and has published guidance through the Wage and Hour Division website. Industry associations also provide training. At a minimum, your payroll staff should understand:
- How to read and apply a wage determination
- The difference between base wage and fringe benefit components
- Overtime requirements under CWHSSA
- Proper worker classification principles
- Apprentice and trainee requirements
- Record retention obligations
4. Verify Wage Determinations Before Every Payroll
Wage determinations can be updated, and using an outdated determination is a violation even if it was current when the project started (depending on the contract terms and modification dates). Best practice is to check the applicable wage determination against SAM.gov before each payroll cycle.
This is one of those tasks that is tedious when done manually but trivial with proper software. CertifiedPayrollPro's SAM.gov integration automates this check entirely, alerting you when rates have changed and ensuring you are always paying current prevailing wages.
Worst Practices
1. Hand-Writing WH-347 Forms
We still encounter contractors who fill out WH-347 forms by hand. This approach maximizes the risk of mathematical errors, illegible entries, transposition mistakes, and inconsistencies between pay periods. It also makes corrections difficult to document properly.
Hand-written forms are not a DOL violation in themselves, but they are strongly correlated with the errors that cause violations. If an investigator cannot read a wage rate or hours total, they will request clarification, which extends the investigation and increases scrutiny.
2. Not Checking Rates Against Current Wage Determinations
One of the most common findings in DOL investigations is payment below the current prevailing wage. This often happens not because the contractor is trying to underpay, but because they set rates at the project start and never checked whether the wage determination was updated.
Some contractors assume that the wage determination locked in at contract award applies for the entire project. This is sometimes true, but not always. General wage determinations are updated periodically, and whether the updated rates apply depends on the contract terms and the type of wage determination. When in doubt, apply the higher rate.
3. Ignoring the Fringe Benefit Obligation
The prevailing wage is not just the base hourly rate. It includes a fringe benefit component that can add $10 to $30 or more per hour depending on the classification and location. Contractors who focus only on the base rate and ignore or miscalculate the fringe obligation are underpaying their workers, even if the base wage meets or exceeds the listed rate.
The fringe benefit obligation can be met through bona fide benefit plan contributions, cash payments to the worker, or a combination. But it must be met, and it must be documented on the certified payroll. This is an area where dedicated software provides significant value by calculating fringe obligations automatically and flagging shortfalls.
4. Submitting Late or Skipping Submissions
Certified payroll is typically due weekly, and late or missing submissions draw attention from contracting agencies. Consistent late submissions can trigger an audit even if the underlying payroll data is perfectly compliant.
Late submission also creates a compounding problem. When you fall behind, the temptation is to rush through multiple weeks at once, which dramatically increases the error rate. Staying current with weekly submissions is far less work than catching up on a month of backlog.
5. Copying Previous Weeks Without Verification
When this week's payroll looks similar to last week's, some contractors simply copy the previous submission and make minor adjustments. This practice masks changes in hours, rates, or classifications that should be reflected accurately. It can also perpetuate errors from the original week across many subsequent submissions.
Each certified payroll submission is a legal certification that the data is accurate for that specific pay period. Copying without verification undermines that certification.
Building a Culture of Compliance
The contractors who maintain the best compliance records are those who treat certified payroll as a core business process, not an afterthought. They invest in the right tools, train their people, and build habits that catch errors early. The result is not just fewer violations. It is less stress, less administrative time, and more confidence when bidding on federal projects.
Good compliance practices are a competitive advantage. Agencies notice which contractors submit accurate, timely certified payroll. It builds trust and can influence future contract awards. In an industry where reputation matters, getting the fundamentals right sets you apart.
