“I’m a Subcontractor and It’s My First Time Dealing with Certified Payrolls. Where Do I Start?”

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If you’re a subcontractor working your first prevailing wage or publicly funded project, chances are you’ve just heard the words “certified payroll” and received the WH-347 form from the prime contractor and thought: What is this and what am I supposed to do with it?

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I’ve been there myself when I first started working as a subcontractor on major heavy civil projects in the DC-area. I’ve helped dozens of subcontractors navigate their very first certified payroll report. Trust me, you’re not alone and there’s nothing to worry about. You’ll get the hang of it after the first go.

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At Kaster, I’ve seen this story unfold countless times: a small- to mid-sized subcontractor wins a job on a public works project and gets hit with a bunch of compliance requirements they’ve never encountered before. Certified payrolls, fringe benefit reporting, wage classifications, apprenticeship documentation; all of this unfamiliar paperwork can feel overwhelming.

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This blog is for you, the sub, who’s been told to submit certified payrolls but has no idea what that means yet. My goal here is to ease those nerves, lay out a simple roadmap, and show you how we help subs get it right the first time.

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Why Certified Payrolls Exist in the First Place

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If your project is funded by a public agency (federal, state, or local), there are laws in place, like the Davis-Bacon Act, that require you to pay your workers no less than the prevailing wage and fringe benefits for the type of work they perform.

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Certified payrolls are the weekly forms (like the WH-347) where you certify that you’re doing just that. It’s a compliance document, part legal attestation, part payroll breakdown. And it’s your proof that you’re paying your workers enough.

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Below Are Steps You Can Take To Get Started On The Right Foot

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Step 1: Ask the Prime Contractor for the Wage Rate Determination Sheet — Before You Sign the Contract, Preferably Before You Submit A Bid. This is the most important and often overlooked step.

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Before you submit your bid, before you sign a subcontract agreement, and certainly before you cut your first paycheck you need to request a copy of the wage determination sheet for the project.

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This document lists:

• The hourly base pay required for each work classification (e.g., Laborer, Carpenter, Operator)

• The fringe benefit amounts (either paid to a benefits plan or as extra cash)

• The effective date tied to that project’s wage determination

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This wage sheet is your north star. You’re flying blind without it. You won’t know what to pay your workers, how to report it, or whether your certified payroll will pass review.

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Step 2: Understand the Work Classifications and Fringe Requirements

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This is where I see most confusion. Let’s break it down:

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• Work Classification: This is the role your worker is performing for that project. If someone is doing laborer work, you must pay them the prevailing wage for Laborer (or best equivalent), not what their business card says.

• Fringe Benefits: This is the trickiest part. The wage determination lists a fringe rate (e.g., $5.12/hour). You can meet this requirement in one of two ways:
  
  1. Pay it to a benefits plan (e.g., health, pension, supplemental unemployment) – this is called a bona fide fringe benefit credit.
  2. Pay it as additional cash wages – if you don’t have a plan set up, just add it and include it  to the worker’s gross hourly pay.

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💡 Key tip #1: If you’re paying it as cash, you must report it separately from the base pay on the certified payroll form, or better known as ‘Cash in lieu of fringe benefit’.

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💡 Key tip #2: If you’re reporting hourly fringe benefit credits, consult with a company executive or the prime contractor if you’re unsure of what constitutes a bona fide fringe benefit. Kaster also can consult and provide guidance on this for its clients.

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Step 3: Get Familiar with the WH-347 Form (Or Your State’s Version)

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The most commonly used certified payroll form is the federal WH-347, although states like Massachusetts, Pennsylvania, and others have their own versions.

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This form asks you to report and break down:

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• Worker name, information, and in some cases, even demographic status

• Classification of work performed

• Hours worked by day, including overtime

• Rate of pay

• Fringe contributions

• Gross pay and deductions

• Net pay to the worker

• A signed compliance statement

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Each week, you must fill it out and submit it to the general contractor (and sometimes to the awarding body).

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Step 4: Submit Weekly, On Time, and Keep Records

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Certified payrolls are a weekly requirement. Even if you didn’t have workers on-site that week, you still may need to submit a “no work performed” statement. Miss a week, and you risk payment delays or compliance penalties.

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Keep backup documentation like timesheets, pay stubs, benefit contributions, etc., in case the Prime Contractor or agency audits you.

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Step 5: Ask Questions, Seek Help, You’re Not Alone

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The reality is, this process wasn’t built with subcontractors in mind. But that’s where Kaster comes in. We built our platform to make certified payroll painless, especially for first-timers.

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If you’re ever unsure how to classify a worker, how to report a fringe, how to break down gross pay and cash fringes or how to fill out the form, ask. Your prime contractor should help, and so should your tech partner.

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Why This Is Worth It

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Prevailing wage projects may seem like a hassle at first, but they can be incredibly stable and lucrative for your business. They’re publicly funded, often long-term, and designed to support fair pay for your crew.

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Once you’ve done your first certified payroll right, the rest becomes routine. And when you have the right tools, like Kaster, it’s easy, automated, and most importantly, validated.

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Final Thought

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If you’ve made it this far, let me leave you with this:

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Certified payroll isn’t something to be afraid of. Once you understand it, doors will open to a whole new market of projects you’re more than qualified to win.

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If you’re a subcontractor and need help getting started, reach out. My team and I are here to walk you through it.

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Let’s help you get paid faster, stay compliant, and continue building your strong reputation.