Construction Payroll (2026): Certified Payroll, Overtime, and the Errors That Cost the Most

Construction Payroll Is Three Systems at Once

Every week a construction payroll clerk has to satisfy the FLSA, the contract they are building under, and whichever state the crew woke up in. Those three rarely line up. This guide is the field version: what to record, how to pay it, and where the money actually leaks.

Run a live example in the certified payroll calculator as you read.

The Weekly Cycle

• . Collect daily time by job and classification. Not weekly totals. Daily, by cost code, by trade.
• . Apply the wage determination for each classification on public work.
• . Split cash wages and fringe credits. Anything short of the required fringe becomes cash.
• . Compute overtime on the basic rate only. Fringes are never multiplied.
• . File certified payroll (Form WH-347 or the state equivalent) with the signed statement of compliance.
• . Archive timesheets, determinations, and apprenticeship paperwork by project for at least three years.

Certified Payroll in Plain Language

On federally funded contracts over 2,000 dollars, contractors and every subcontractor file a weekly report listing each worker, classification, daily hours, rates, gross pay, deductions, and net. The statement of compliance is signed under penalty of perjury. Progress payments can be withheld while reports are late or unreconciled, which is why certified payroll delays become cash-flow problems fast.

Common rejections:

• Classification that does not appear on the wage determination
• Fringe column blank when benefits are paid into plans
• Overtime rate that equals 1.5 times the full package instead of 1.5 times the basic rate
• Apprentices listed without a registered programme and ratio

Fringe Benefits: The Number Everyone Gets Wrong

A determination might read 38.50 basic plus 14.25 fringe. The required package is 52.75 an hour. If the company contributes 9.00 an hour into health and pension, the remaining 5.25 must be paid as cash on every hour worked, straight time included.

For overtime, the premium is half the basic rate: 19.25 an hour extra. Fringe money that flows through bona fide plans stays out of the FLSA regular rate. Fringe money paid as cash is part of it. That distinction changes the overtime premium and it is worth getting right before an audit finds it.

Multi-Classification Weeks

A worker who spends Monday as a laborer and Tuesday to Friday as a cement mason is paid each classification for the hours actually worked in it. Overtime is then based on a weighted average of those rates for the week, unless there is a valid written agreement to use the rate in effect when the overtime hours occurred. Without daily records by classification, the higher rate is presumed.

Our weighted average overtime guide works through the arithmetic.

Travel Time, Yard Time, and Tools

• Home to first site and last site to home: normally unpaid commute.
• Yard to site after reporting, and site to site during the day: paid.
• Mandatory tool loading, safety meetings, and equipment checks before the shift: paid.
• Overnight travel that cuts across normal working hours, even on a weekend: generally paid for those hours.

These minutes are what push a 38-hour crew into overtime, and they are the most common source of back-wage findings in construction.

Per Diem and the Regular Rate

A reasonable per diem tied to actual travel expense is excluded from the regular rate. A flat per diem paid to everyone regardless of travel, or one that varies with hours worked, looks like disguised wages and gets added back into the regular rate, raising every overtime hour retroactively.

Multi-State Crews

Crews that cross state lines pick up whichever state rule is more generous for the hours worked in that state. California triggers daily overtime after 8 and double time after 12; Nevada and Alaska have their own daily rules; Colorado adds a 12-consecutive-hour rule. Withholding follows the state where the work was performed in most cases, with reciprocity agreements for some neighbours.

See multi-state payroll for US employers.

Cash-Flow Reality: What Overtime Costs a Job

A ten-person crew at a 45 dollar cash rate running 8 overtime hours each adds 1,800 dollars in premium alone per week, before burden. Payroll taxes, workers compensation premiums that scale with gross wages, and union contributions push the loaded cost 25 to 40 percent higher. Bid overtime deliberately; do not discover it in week nine.

Model the crew cost in the construction overtime calculator and the timesheet calculator.

A Compliance Checklist You Can Actually Use

• Daily timesheets signed by the worker, stored by project
• Current wage determination attached to each project file
• Classification list reconciled to the determination before week one
• Fringe statement showing plan contributions per hour
• Overtime computed on the basic rate, verified on one sample worker weekly
• Apprentice registration and ratio documentation
• Three years of records after contract completion

Frequently Asked Questions

What is certified payroll in construction?

A weekly payroll report, usually Form WH-347, filed on federally funded construction contracts over 2,000 dollars. It lists each worker, classification, hours, rates, and deductions, and includes a signed statement of compliance.

How is overtime paid on prevailing wage jobs?

At 1.5 times the basic hourly rate from the wage determination, plus the full fringe amount at straight time on every hour. Fringe benefits are never multiplied by the overtime factor.

Is travel between job sites paid in construction?

Yes, when it happens during the workday. The commute from home to the first site and from the last site home is normally unpaid.

Do construction workers get overtime after 8 hours?

Only in daily overtime states such as California, Nevada, Alaska, and Colorado, or where a union agreement or state prevailing wage law requires it. Federal law measures overtime by the 40-hour workweek.

Can per diem be excluded from overtime calculations?

Only if it reasonably approximates actual travel expenses. A flat payment made regardless of travel is treated as wages and must be included in the regular rate.

How long must construction payroll records be kept?

Three years after contract completion under Davis-Bacon, three years for payroll records under the FLSA, and two years for time cards and wage computations. Several states require four.

Bottom Line

Record hours daily by classification, split the package correctly, multiply only the basic rate, and file on time. Everything else in construction payroll is bookkeeping. Start with the certified payroll calculator and the prevailing wage overtime guide.

This article is general payroll information, not legal advice.