In January 2025, the U.S. Department of Labor (DOL) introduced a revised WH-347 form for contractors and subcontractors working on federally funded projects. Securing government contracts, in turn, can significantly transform your business by offering long-term stability, increased financial growth, and enhanced industry credibility. However, winning these contracts requires more than just competitive bidding; it demands strict adherence to certified payroll compliance.
Without proper compliance, contractors risk penalties, disqualification from future bids, and even potential legal issues. To help you stay ahead, this guide breaks down what certified payroll compliance entails and explains how meeting these requirements can strengthen your chances of winning more government contracts and supporting long-term business growth.
Understanding Certified Payroll Compliance
Certified payroll is a specialized payroll report, typically submitted using Form WH-347, that government contractors must file when working on federally funded construction projects. This report is essential for maintaining compliance with the Davis Bacon Act, which requires contractors to pay prevailing wages to laborers and mechanics involved in public works projects. To remain compliant, employers must accurately track and report employee wages, fringe benefits, and job classifications on a regular basis.
In addition to federal requirements, many states have established their own prevailing wage laws and mandate state specific certified payroll reports. Because of this, contractors looking to expand into new geographic markets or bid on a wider range of public projects must comply with both federal and state certified payroll regulations. Failure to meet these standards can lead to serious consequences, such as costly fines, lost contract opportunities, and long-term damage to your business’s reputation.
Learn more about Prevailing Wages and Unions.
Why Certified Payroll Compliance Matters
Government agencies prioritize compliance and transparency when awarding contracts. Ensuring certified payroll compliance shows that your business:
- Operates legally and ethically
- Manages finances responsibly
- Pays workers fairly and correctly
- Avoids penalties, fines, and legal disputes
- Has a competitive advantage over non-compliant competitors
Non-compliance, unfortunately, can not only lead to legal troubles but also delay projects and increase costs due to corrective measures. On the other hand, consistently following certified payroll regulations helps build a strong industry reputation. Over time, this credibility can lead to long-term partnerships as well as increased opportunities for future government projects.
Steps to Ensure Certified Payroll Compliance
- Stay Updated on Federal and State Regulations
- Follow the Davis-Bacon Act and state-specific prevailing wage laws.
- Monitor updates in wage determinations and labor classifications.
- Ensure compliance with multi-state labor laws if working across regions.
- Subscribe to government bulletins and industry newsletters to stay informed.
- Use Tools like HCM TradeSeal Pre & Post Payroll
- Consider HCM TradeSeal, a trusted HCM solution designed to simplify wage management and support certified payroll compliance.
- Automate wage calculations, tax deductions, and report generation.
- Reduce manual errors and ensure accurate payroll submission every time.
- HCM TradeSeal keeps your data secure and accessible for audits, ensuring peace of mind.
- Take advantage of built-in tools specifically designed to meet certified payroll reporting standards.
- Maintain Accurate Payroll Records
- Track hours worked, job classifications, and fringe benefits precisely.
- Securely store payroll records for at least three years.
- Submit Certified Payroll Reports on Time
- Complete and file WH-347 reports before government deadlines.
- Double-check details to prevent rejections and delays.
- Use HCM TradeSeal’s automated report generation to ensure timely submissions without errors.
- Standardize certified payroll reporting to reduce errors and ensure consistency across your team, as non-standard processes increase the risk of mistakes.
- Conduct Regular Compliance Audits
- Perform internal audits to catch and correct discrepancies.
- Adjust payroll policies to align with evolving regulations.
- With HCM TradeSeal, compliance audits become much simpler with automated tracking and error-checking.
- Train HR and Payroll Teams
- Educate employees on certified payroll regulations and best practices.
- Provide ongoing training on wage laws and reporting requirements.
- Develop a standardized compliance manual for payroll and HR teams.
- Use HCM TradeSeal’s built-in training resources to educate your team and ensure they’re up to date with best practices.
- Classify Workers Correctly
- Distinguish between employees and independent contractors accurately.
- Prevent misclassification to avoid penalties and contract complications. HCM TradeSeal helps ensure accurate classification and compliance.
- Track Journeyman and Apprentice ratios when required by the project. HCM TradeSeal helps you monitor and manage these ratios to stay compliant with labor regulations.
How HCM TradeSeal Helps You Win Government Contracts
- Boosts Credibility and Trust: Government agencies are more likely to work with contractors who consistently meet compliance standards. By using HCM TradeSeal, you can ensure your payroll is aligned with government requirements, helping you build a strong reputation in the industry.
- Prevents Legal and Financial Risks: Non-compliance can lead to costly fines, penalties, or even contract termination. Fortunately, HCM TradeSeal helps you avoid these risks by keeping your pre and post payroll processes accurate and fully compliant.
- Enhances Accuracy and Efficiency: Rather than relying on manual processes, HCM TradeSeal reduces the risk of human error and streamlines time-consuming tasks. As a result, your certified payroll reports are not only accurate but also submitted on time.
- Strengthens Competitive Positioning: Because many government contracts require proof of compliance, having a reliable system in place gives you a competitive edge. With HCM TradeSeal, you can easily generate and submit the documentation needed to prove compliance.
- Opens More Opportunities: With confidence in your compliance, you can bid on larger and more valuable government projects. HCM TradeSeal ensures your pre and post payroll processes meet legal requirements, so you can focus on growth and new opportunities.
In summary, prioritizing certified payroll compliance with HCM TradeSeal positions your business as a reliable, trustworthy partner for government projects. Thanks to its streamlined features, the platform helps you submit accurate, timely reports and stay ahead of evolving regulatory requirements.
Common Compliance Challenges & How to Overcome Them with HCM TradeSeal
Even well-prepared contractors face challenges with certified payroll compliance. Here’s how HCM TradeSeal can help:
- Keeping Up with Regulations: Certified payroll reports can change frequently.
Solution: With HCM TradeSeal, you can request and access the latest certified payroll reports at no additional charge, helping ensure you stay compliant with updated regulations. - Avoiding Manual Errors: Mistakes in payroll reporting can lead to penalties.
Solution: HCM TradeSeal’s rate validation feature significantly reduces errors before they hit payroll, helping ensure accuracy and compliance. - Reducing Time-Consuming Processes: Manual payroll preparation is labor-intensive.
Solution: HCM TradeSeal streamlines pre- and post-payroll tasks, saving you time and allowing you to focus on growing your business. - Managing Multi-State Compliance: Contractors working in different states face varying wage laws.
Solution: HCM TradeSeal helps you manage state-specific prevailing wage determinations and certified payroll reporting. We also assist with union wage management if union workers are required for the project. - Handling Employee Misclassification: Misclassification can lead to fines.
Solution: HCM TradeSeal features a built-in check that catches mis-typed positions, ensuring they match the correct determination and reducing the risk of misclassification. - Tracking Fringe Benefits Accurately: Misreporting benefits can lead to audits.
Solution: HCM TradeSeal calculates and tracks benefits automatically, eliminating the risk of errors.
Final Thoughts
Certified payroll compliance is more than a legal requirement—it’s a strategic advantage. By ensuring compliance with payroll regulations, contractors improve their reputation, reduce risks, and increase their chances of winning government contracts. HCM TradeSeal is the ideal solution to simplify this process, offering you the tools to ensure automated, error-free reporting and compliance.
If you’re ready to streamline certified payroll compliance and win more government contracts, consider HCM TradeSeal—your trusted solution for compliance and payroll management.
Stay compliant, stay competitive, and win more government contracts with HCM TradeSeal!
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About
Founded in 2020, HCM TradeSeal has become a Human Capital Management’s top choice for Construction industry compliance. Recognized as the “Prevailing Wage Compliance Service of the Year 2025” by ManageHR magazine, HCM TradeSeal offers a proven integration with the nations most popular Payroll and ERP providers.
What sets us apart? We specialize in assisting companies with complex union requirements and Davis-Bacon compliance. Our full-service rate management and validation ensure accuracy before payroll is processed, minimizing compliance risks. Furthermore, by automating wage calculations and streamlining certified payroll and union reporting, we help payroll teams save valuable time each week. With HCM TradeSeal, payroll and reporting become effortless, giving you peace of mind.