FOR IMMEDIATE RELEASE
ANN ARBOR, MI – November 21, 2025 – The 2025 One Big Beautiful Bill (OBBB) introduces significant changes to payroll, tax, and reporting regulations, affecting contractors working on public works and prevailing wage projects. The law requires separate reporting of overtime, fringe benefits, and tips, increasing transparency and eliminating the ability to combine pay components into a single figure. Non-compliance can lead to financial penalties, disqualification from contracts, and heightened audit exposure.
Key Changes in OBBB
- Separate Reporting of Overtime Premiums: Contractors must distinguish between base wages and overtime premiums, including additional half rates under the Fair Labor Standards Act.
- Reporting Tips and Occupation Codes: Tipped employees’ earnings must be tracked and reported by occupation following IRS and Treasury guidelines.
- Updated IRS and Treasury Forms: New forms, effective in 2026, include dedicated boxes for overtime and tips, requiring payroll systems to capture these elements correctly.
- Prevailing Wage Compliance: Contractors must separate overtime, shift premiums, and fringe contributions in certified payroll submissions.
- Reduced Opportunity to Hide Underpayments: Accurate tracking of hours, rates, and classifications is mandatory.
Risks of Non-Compliance
Contractors who fail to comply with OBBB and prevailing wage regulations can face serious consequences. Financial penalties may include back pay, fines, and accrued interest, while non-compliance can also result in disqualification from current and future public works contracts. Beyond financial and contractual repercussions, inaccurate or incomplete reporting can damage a contractor’s reputation with employees, clients, and regulatory agencies. Additionally, audits become more time-consuming and costly when payroll records are not properly maintained, increasing the risk of errors and further penalties.
HCM TradeSeal Compliance Capabilities
HCM TradeSeal provides pre- and post-payroll compliance solutions designed for construction contractors managing certified payroll and prevailing wage reporting. Key capabilities include:
- Detailed hour tracking: Separates straight time and overtime by job
- Fringe and benefit reporting: Supports compliance with prevailing wage reporting rules
- Accurate overtime calculations: Automatically applies federal and state rules
- Certified payroll reporting: Generates detailed, compliant reports including hours, classifications, wages, and fringe contributions
- Adaptability: Supports “reasonable method” estimations in 2025 and aligns with future IRS and Treasury form updates
- Audit trail documentation: Maintains complete payroll data for verification
Best Practices for Contractors
To maintain compliance under OBBB and prevailing wage laws, contractors should take a proactive approach to their payroll and reporting processes. This includes evaluating payroll systems to ensure they can accurately track overtime, fringe benefits, and employee classifications, as well as training payroll administrators and field staff on the updated reporting requirements. Contractors should prepare for upcoming IRS form changes and carefully document any estimation methods used for tips and overtime. Regular internal audits help identify and correct potential issues before they escalate, and staying informed about state-specific prevailing wage regulations ensures that reporting remains accurate across all jurisdictions.
About HCM TradeSeal
Founded in 2020, HCM TradeSeal is a leading Human Capital Management compliance solution for the construction industry. Recognized as Prevailing Wage Compliance Service of the Year 2025 by ManageHR Magazine, HCM TradeSeal integrates with the nation’s most widely used payroll and ERP systems. The platform specializes in complex union payroll, Davis-Bacon compliance, and full-service rate management, helping payroll teams save time while ensuring accurate, compliant reporting.
To learn more or request a free demo, visit www.hcmtradeseal.com.
Media Contacts:
Kelly Moore
Channel Marketing Associate at HCM TradeSeal
kmoore@hcmtradeseal.com
Company Information:
Website: www.hcmtradeseal.com
Management Team:
Steve Fentriss, CEO and Co-Founder