- Certified Payrolls & Use of Electronic Signatures
Copeland Act provision and implementing regulations
- The Copeland Act language requires DOL regulations to "include a provision that each contractor and subcontractor each week must furnish a statement on the wages paid each employee during the prior week." 40 U.S.C. § 3145.
- This requirement is implemented by DOL regulations at 29 C.F.R. Part 3 and Davis-Bacon contract clauses in 29 C.F.R. Part 5:
- Davis-Bacon contract clause provisions at 29 C.F.R. § 5.5(a)(3) address "Payrolls and basic records." Also, 29 C.F.R. §§ 5.5(a)(5) and (8) incorporate the requirements of 29 C.F.R. Part 3 and rulings and interpretations under 29 C.F.R. Part 3 in DBA/DBRA covered contracts. (These provisions are reiterated in the FAR 48 C.F.R. §§ 52.222-8, 52.222-10 and 52.222-13, respectively.)
- Provisions at 29 C.F.R. § 3.3 address "Weekly statement with respect to payment of wages" and § 3.4 addresses "Submission of weekly statements and the preservation and inspection of weekly payroll records."
- Regarding the weekly statement with respect to payment of wages, section 3.3(b) requires that:
- Each contractor or subcontractor engaged in the construction, prosecution, completion, or repair of any public building or public work, or building or work financed in whole or in part by loans or grants from the United States, shall furnish each week a statement with respect to the wages paid each of its employees engaged on work covered by this part 3 and part 5 of this title during the preceding weekly payroll period. This statement shall be executed by the contractor or subcontractor or by an authorized officer or employee of the contractor or subcontractor who supervises the payment of wages, and shall be on the back of Form WH 347, "Payroll (For Contractors Optional Use)" or on any form with identical wording.
- Each weekly statement required under § 3.3 shall be delivered by the contractor or subcontractor, within seven days after the regular payment date of the payroll period, to a representative of a Federal or State agency in charge at the site of the building or work, or, if there is no representative of a Federal or State agency at the site of the building or work, the statement shall be mailed by the contractor or subcontractor, within such time, to a Federal or State agency contracting for or financing the building or work …. [Emphasis added.]
Payrolls and the "Statement of Compliance"
- In the administration and enforcement of Davis-Bacon labor standards references are generally made to "certified payrolls." However, it is important to note that in the standard Davis-Bacon contract clauses established by 29 C.F.R. Part 5, section 5.5, there are two separate requirements that relate to the submittal of the "certified payrolls."
- Subsection 5.5(a)(3)(ii)(A) requires the weekly submittal of "a copy of all payrolls." Specifically, it states that:
- The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the (write in name of appropriate federal agency) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to the [agency]" (emphasis added).
The word "agency" in the preceding sentence refers to the federal agency.
- Thus, on federal contracts to which the Davis-Bacon Act applies, the prime contractor is responsible for submittal of all weekly payrolls to the federal agency.
- On federally assisted projects to which Davis-Bacon requirements apply under a Davis-Bacon "related Act," the prime contractor generally submits the weekly payrolls to a state or local government agency (or an applicant or sponsor responsible to such an agency) for transmission to the federal agency responsible for the federal program under which federal assistance is provided.
- Apart from and in addition to the requirement stated in subsection 5.5(a)(3)(ii)(A), subsection 5.5(a)(3)(ii)(B) stipulates a separate, albeit closely related, requirement that each weekly payroll submitted be accompanied by a "Statement of Compliance."
- The provisions at 29 C.F.R. §§ 5.5(a)(3)(ii)(B) and (C) require that:
- Each payroll submitted shall be accompanied by a "Statement of Compliance," signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following: (1) That the payroll for the payroll period contains the information required to be provided …, the appropriate information is being maintained …, and that such information is correct and complete; (2) That each laborer or mechanic … has been paid the full weekly wages earned, … ; and (3) That each laborer or mechanic has been paid not less than the applicable wages … as specified in the applicable wage determination incorporated into the contract.
- The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the "Statement of Compliance" required by paragraph (a)(3)(ii)(B) of this section. [See page 2 at https://www.dol.gov/whd/forms/wh347.pdf.]
- The "Statement of Compliance," which is required to be attached to each copy of a contractor's weekly payroll for a covered project, pursuant to 29 C.F.R. § 5.5(a)(3)(ii)(B), requires a signature "by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract."
- The signature on each weekly "Statement of Compliance" attached to the weekly payroll may be either an original handwritten or an electronic signature.
- Thus, the payroll certification provision established by 29 C.F.R. § 5.5(a)(3)(ii)(B) continues to require that the properly signed "Statement of Compliance" be submitted or transmitted to the appropriate federal agency.
- Photocopies or "pdf" copies of the "Statement of Compliance," faxed "Statements of Compliance," or an electronically scanned "Statement of Compliance" e-mailed to an agency do not satisfy the requirement that a "Statement of Compliance" be "signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract."
- This fact is particularly important in the context of 29 C.F.R. § 5.5(a)(3)(ii)(D) which emphasizes the fact that: "The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under section 1001 of title 18 and section 231 of title 31 of the United States Code."
Electronic submittal of payrolls with the related "Statement of Compliance"
- In 2004, WHD issued an advisory letter to the U.S. Army Corps of Engineers and the Federal Highway Administration advising that the submission of electronic signatures satisfied requirements of the Copeland Act and its regulations.
- A contracting agency or prime contractor may permit or require contractors to submit the weekly payrolls, each with the accompanying "Statement of Compliance" through an electronic system. Individual contracting agencies determine any such electronic submission options because contractors submit the information directly to each contracting agency, not to the DOL.
- The use of electronic signatures to satisfy requirements of the Copeland Act and its regulations by the use of an "agency approved limited access Web-based portal" should include the legally valid electronic signature of the "contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract." (See 73 FR 77510.)
- Web-based certified payroll compliance solutions exist and some agencies and contractors have set up systems to comply electronically.
- Under pertinent provisions of the Copeland Act and the Government Paperwork Elimination Act (Pub. L. 105-277, Stat 2681, codified at 44 U.S.C. § 3504, note), WHD affirms that the use of electronic signatures is sufficient for compliance purposes under the Copeland Act.
- WHD encourages all government agencies to permit contractors to submit certified payrolls electronically or through allowing access to appropriate agency approved limited access Web-based portals providing the required information and certification.
- Web-based systems for the submission of electronic submission of certified payrolls often include compliance monitoring tools and can improve efficiency in the review of data reported, as well as reducing recordkeeping burdens and storage expenses.
Consulting Services We Provide
- Review public works preconstruction contracts
- Monitor DIR contractor/subcontractor certified payrolls
- Audit labor classification for each worker employed
- Review DIR pre-DAS 140/142 submissions
- Review CAC training fund contributions form CAC-2
- Review DIR Fringe Benefits Statement PW-26
- Monitor DIR wage determinations
- Audit fringe benefits allowances
- Review DIR holiday payment requirements
- Audit DIR travel & subsistence requirements
- Caltrans Labor Compliance
- County of Sacramento Labor Compliance
- City of Los Angeles Labor Compliance
- Los Angeles Unified School District Labor Compliance
- Federal Davis-Bacon Project Monitoring
- Federal DBE Implementation & Review
- Federal FAA AIP Goal Setting
- DIR & Davis-Bacon Training
- DIR Civil Wage Penalty Review
- Local-Hire Review (e.g., San Francisco)
- Skilled and Trained Workforce
Give us a call to discuss your labor compliance requirements.
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