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Over the course of a construction project, Contractors may be asked to submit two different types of payroll for work performed on a particular project or contract. These payrolls are known as Certified Payroll and Wrap-Up Payroll. While this may seem cumbersome, these two types of payroll are vastly different and are used for different purposes.
Certified Payroll is a detailed payroll report on a federal form, WH-347, that lists various pieces of information ranging from the employee’s name, social security number, wage rate, and benefits they are entitled to, as well as how many hours an employee has worked on a particular project.
The report will show all employees on a particular job, giving a snapshot of hours, gross wages, and withholdings on a week-to-week basis. Certified Payrolls are submitted by a person of authority within the company certifying that the wages and information are correct, along with a statement of compliance. Any falsification of this data may result in criminal prosecution.
Wrap-Up Payroll, or Reportable Payroll, is exactly the same as what a company has to report to their own Workers Compensation Carrier for the state in which they are performing the work. Rather than listing out individual employees and wage information, Wrap-Up Payroll simply requires the Contractor to add all of the accumulated hours for a given Workers Compensation class code, time period (typically a month), as well as adding all of the reportable wages of all employees working on a project or contract.
This information is then submitted to the Wrap-Up Administrator handling the project. It is important that this payroll information be accurate. Incorrect reporting could lead to accounting errors and cause the carrier to report inaccurate information to the bureaus, which in turn, could affect your EMR.
If you have any questions regarding what type of payroll you should be reporting or how inaccurate information could affect your EMR, reach out to TSIB today! You may also download TSIB's Workers Compensation eBook for additional insights into your company's EMR.