complying with davis- bacon/prevailing wage laws, · pdf filecomplying with...

Complying with Davis-

Bacon/Prevailing Wage

Laws, AIA Billing

Requirements and

Overtime Laws

(Jumping through hoops to pay

and be paid)

Nancy SmythSunburst Software Solutions, Inc.

Copyright 2000 – 2010 All Rights Reserved http://www.sunburstss.com

[email protected]

http://www.sunburstss.com/


mailto:[email protected]

Background

• Used and supported Intuit products since 1986• Specialized in working with commercial/government

construction contractors• Manually created certified payroll reports, EEOC Reports,

Fringe Benefit and Union Dues reports from QuickBooks data for 4 years

• Certified QuickBooks ProAdvisor since 2000• 3rd party developer of QuickBooks Add-ons since 2000• Intuit Premier Level Developer since 2001• Intuit Gold Developer since 2006• Member American Institute of Professional Bookkeepers

since 1996

Sunburst Software Solutions, Inc. | Copyright 2000 – 2010 All Rights Reserved | http://www.sunburstss.com


Government Funded Construction Projects Certified Payroll

Prevailing Wage Laws And Davis-Bacon Act Compliance



• Construction project funded with Federal or State dollars

• Value of $2,000.00 or more


What is a Government Funded Construction Contract?


• Davis-Bacon Act• Contract Work Hours and Safety Standards Act (CWHSSA)• Copeland Act (Anti-Kickback Act)• Fair Labor Standards Act (FLSA)• Equal Employment Opportunity Commission• Unions

• U.S. Department of Labor• State Department of Labor• State Department of Transportation• Some Cities and Counties


Who is involved in making Prevailing Wage Laws?


• Determined by the U. S. Department of Labor• Based on wages for the area in which the project will

occur and on the type of construction (including Union wages)

• Prevailing wage rates will differ based on the type of work the employee performs and their level of skill– Can change by city, county, and job

• Prevailing Wage Rates include BOTH an hourly wage rate PLUS an hourly fringe benefit amount– Usually more than what you currently pay your

employeesSunburst Software Solutions, Inc. | Copyright 2000 – 2010 All Rights Reserved | http://www.sunburstss.com

What is a “prevailing wage”


• Specified dollar amount in addition to a base hourly rate of pay

• Can be paid– To the Union on behalf of the employee– To a “bona-fide” plan– In cash to the employee as part of gross wages– The total hourly fringe benefit amount can be “split”

between a bona-fide plan(s) with the balance paid in cash to the employee


What is the “fringe benefit amount” and how is it paid?


• *Contributions made by the employer to employee Health, Dental, Vision, Life, or Accident Insurance

• 401k employer contributions• Pension contributions made by employers• **Vacation and/or Holiday Pay• ***Supplemental Unemployment

*Not all states will allow contractors to take a “credit” toward the total hourly fringe benefit rate for these items.**Even fewer states allow contractors to take a “credit” toward the total hourly fringe benefit rate for these items.***Prevailing Wage Contractors Association – http://www.pwca.net


What is considered to be a “bona-fide” plan?

Contact your State Department of Labor – Prevailing Wage Division to find out what is considered to be a “bona-fide” plan.

http://www.pwca.net/



How do I know how much I have to pay my employees?


• Union– Straight time = $11.00– Overtime = $11.00 + ($11.00 divided by 2) $5.50 = $16.50

• Bona-fide Plan– Straight time = $11.00– Overtime = $11.00 + ($11.00 divided by 2) $5.50 = $16.50

• Cash to the employee– Straight time = $11.00 + $3.79 = $14.79– Overtime = $11.00 + ($11.00 divided by 2) $5.50 + $3.79 = $20.29

• Bona-fide Plan & Cash to the employee ($1.00 credit)– Straight time = $11.00 + $3.79 - $1.00 = $13.79– Overtime $11.00 + ($11.00 divided by 2) $5.50 + $3.79 -$1.00 = $19.29Sunburst Software Solutions, Inc. | Copyright 2000 – 2010 All Rights Reserved | http://www.sunburstss.com

Specifics


• $3.79 paid to Union Hall or bona-fide plan treated as company contributions, usually not subject to payroll taxes, workers comp and *general liability insurance

• $3.79 paid to employee as part of gross wages – subject to payroll taxes, workers comp and *general liability insurance

• $2.79/$1.00 split – the $2.79 paid to the employee as part of gross wages is subject to payroll taxes, workers comp and *general liability insurance BUT the $1.00 is treated as a company contribution and is NOT subject to the additional labor burden

• Should always be job costed• Should always be included in labor burden calculations when bidding

* subject to General Liability Insurance ONLY if it is calculated on gross payroll and not gross sales.


How does this affect my labor costs and bidding?


• Trade or work classification MUST be selected for each employee based on the type of work they are actually performing

• Employees who work “split classifications” (laborer in the morning – equipment operator in the afternoon); required to track hours accurately or pay highest rate


Tracking employee time, pay rates & work classifications


Certified Payroll Reports



• Specially formatted payroll report• Must be submitted on a weekly basis

• Signed with an original signature of a company official


What is a Certified Payroll Report & what makes it “certified”?


• Who is working on the project• What type of work each employee did• Where your employees worked and how many hours they

worked• What you paid them on an hourly basis• How much the employee earned on this job and on all jobs• What was withheld from their pay• How much money they took home


What information has to be reported on the Certified Payroll Report?


Are there other reports that we will be required to submit?




Union/Bona-fide Plan Fringe Benefit & Dues Reports



EEOC/Workforce Utilization Reports



ARRA Reports



Questions?

AIA Billing(American Institute of Architects)



• Standardized method of percentage of completion contract billing (progress invoicing)

• Developed by the American Institute of Architects (AIA) in 1992

• Contractor “applies” for payment due• Architect “certifies” that payment is due• Must be signed by the contractor & notarized• Can expedite payment


What is AIA Billing?


• Original Contract Amount• Net Changes by Change Orders• Contract Sum to Date• Total Work Completed & Stored to Date• Retainage Withheld• Total Earned LESS Retainage• Total of previous billings• Current billing• Balance to finish INCLUDING Retainage• Summary of Current & Previous Change Orders

What information is required on an AIA bill?


• “Retainage” is a percentage of the total job bid that is “held back”

• Considered insurance or a “good faith” tool• Supposed to be held in escrow and paid back when

the contractor has fulfilled his obligations


What is Retainage?


• Fixed Rate• Variable Rate

– Changes over the life of the contract– Different rates on specific phases


How is Retainage Held?



Questions?


Calculating Overtime and/or Weighted-Average Overtime



• “Overtime” wages for hours actually worked over 40 in a week (or 8 hours in a day)

• Overtime rate is equal to 1.5 times the “average” regular rate of pay– $10.00 regular rate + ($10.00 dived by 2) $5.00 = $15.00

per hour


Fair Labor Standards Act (FLSA)


• Works on two or more jobs at different rates of pay• Works under two or more work/trade classifications

at different rates of pay for the same employer, in the same work week


Weighted-Average Overtime


50 hours – 25 hours @ $10.00 and 25 hours @ $12.00– (25 x $10) $250.00 + (25 x $12) $300.00 = $550.00– $550.00 divided by 50 hours = $11.00 weighted-average rate of pay– $11.00 + ($11.00 divided by 2) $5.50 = $16.50 overtime rate of pay– (40 x $11.00) $440.00 + (10 x $16.50) $165.00 = $605.00 gross pay


How is Weighted-Average Overtime Calculated?


• Construction, healthcare, and manufacturing industries– Pennsylvania, Utah, New Jersey, North Carolina,

Maryland, Florida, Ohio, Colorado, *Oregon.

*Oregon’s weighted-average overtime law is slightly different than the Federal Law.


Who must pay using “weighted-average” overtime?



Questions?


• Manually creating reports• Using Excel to create reports• Using a “stand-alone” program• Using the built-in “alternate” certified payroll report

in QuickBooks Premier/Enterprise IF they have an Enhanced Payroll subscription

• Buying expensive construction specific software


How are QuickBooks Users Currently Complying?


• Need to run multiple QuickBooks reports• Extremely error-prone• Time consuming• Entering the same data in multiple programs• Reports do not contain all required data


Do these methods REALLY work?


Come back for the afternoon session to see how our integrated QuickBooks applications utilize your existing QuickBooks data to automate these time consuming requirements – making compliance a

breeze!



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