Slippery When Wet… Complications of the Prevailing Wage Calculations
Before you can drive off with the checkered flag, we need to review the prevailing wage.
If you’re a contractor who performs government jobs, your payroll has to be certified. Workers must receive a minimum level of pay as required by state or federal law. These prevailing wage calculations should be conducted as part of an automated process for accurate and timely processing to be sure to keep you in compliance.
The calculation can become complicated when companies have the option of paying the wage difference between the minimum required wage and the hourly wage paid to the worker with cash or with benefits.
For example, if a carpenter’s prevailing wage is $30/hour and he/she is making $45/hour, they can be paid the remaining $15/hour wage in cash or with benefits (union or HR).
Some additional decisions must be made with prevailing wages when it comes to taxation, as some earnings can be treated as taxable or non-taxable. Companies can save on FICA or Medicare by making these wages non-taxable and providing non-taxable benefits in the prevailing wage calculations.
To keep you on the straight and narrow path, your payroll app should be able to track and manage these different crafts/classifications as well as their associated prevailing wages, and be able to tie base rates and fringe benefits to these crafts/classifications.
In addition, the software should be able to calculate the fringe benefits as part of employer paid medical benefits in order to track the credit received for this process.
To remain in line with government compliance, certified payroll reports must be created and submitted in a timely manner. Effective payroll software should be able to meet these regulatory requirements with ease including the ability to upload those files into designated portals or allow for seamless integration with certified payroll reporting tools such as eMars and LCPTracker.
Contact us for more information on how to win your race with the prevailing wage, and check out our next edition of the Payroll and HR Blog Post Series.
Get the Green Light on Garnishments from Your Payroll App
The pit stop is over! Let’s get back behind the wheel to discuss the most common payroll and human resources administration road blocks – garnishment calculations and reporting – and how we can speed through them with software.
Today’s advanced payroll applications can set up, calculate and report on all garnishment and child support scenarios while complying with state and federal laws regarding involuntary deductions. Even the most complex scenarios, including the need to calculate and prioritize multiple garnishments simultaneously, as well as abide by net pay laws, can be addressed by payroll software.
For example, in many states, employees with multiple child support payments must have their garnishments prioritized by court or case date and processed on a first-come-first-serve basis. However, some of these states require that the individual will be left with a minimum amount of net pay. Traditional payroll applications would blow a gasket just thinking about these requirements, but industry-leading software provides options for pro-rated, order-received and even-split calculations, and these amounts can be automatically updated as invoices in Accounts Payable with case numbers and other identifying data. Then, separate checks for garnishments can be issued and even grouped by vendor.
With child support in the rear view mirror, we can drive on toward tax levies. To address these garnishments, payroll systems need to identify the basis for percentage of wage calculations which might exclude certain benefits or deductions such as medical insurance, union dues, uniform expenses, etc., while ensuring the required minimum of net pay remains available to comply with state and federal laws. No one should have to manually track employees’ federal and state tax levies – especially outside of an accounting package – and then have to schedule additional payroll cycles until all deductions have run their course.
Further roadblocks can be the lack of tracking and historical reporting if no electronic archival features are in place. Some of today’s inferior payroll systems force this practice and/or don’t have the ability to scan and attach garnishment orders electronically. Record-keeping for such payroll calculations are critical for audits, so be sure your payroll app has the bells and whistles of a luxury sedan, not an old tractor.
Get the green light on garnishments, don’t let your business roll into a pot hole. Contact us for more information and be sure to rev up for another Payroll and HR Blog Post Series… coming up next.
- Eliminating paper forms that your mobile workforce use to capture structured information which is then re-keyed, scanned, posted, or filed where access by the rest of your organization is difficult.
- Decreasing the time and effort to process and transmit service, billing, collection and job-related communication by getting rid of paper documents and manual processes.
- Improve productivity around your deliverables (i.e. blueprints, design drawings, procurement and supply chain orders, equipment logs, daily process reports and punch lists) by digitizing all data and processes.
- Save time, eliminate rework, and increase accountability by removing paper-based documents / processes and introducing content management and email integration to all correspondence / communication.