Contractors Face New Payroll Compliance Challenges

Contractors are navigating one of the most complex regulatory environments in decades as new federal and state certified payroll requirements take effect. Payroll4Construction, part of the Foundation Software business portfolio, is tracking the changes and providing tools to help companies remain compliant.

At the federal level, updates to the Davis-Bacon Act in 2025 included revisions to the WH-347 form, effective January 6, requiring enhanced fringe reporting and new employee classification fields. Penalties also rose by 2.6% under the Federal Civil Penalties Inflation Adjustment Act on Jan. 15, with fines for substantial violations now reaching up to $72,876.

Several states have introduced additional mandates. New Jersey launched the NJ Wage Hub in August 2024, requiring electronic submissions within 10 days. California mandates weekly electronic submissions for projects exceeding $1,000. Connecticut enforces felony charges for non-compliance, and New York is preparing to implement a public database of certified payroll records by the end of 2025.

"Contractors managing certified payroll across multiple states face growing complexity," said Jim Welsh, sales representative at Payroll4Construction. "Payroll4Construction makes compliance manageable by automating prevailing wage calculations and generating jurisdiction-specific reports, so contractors don't have to worry about changing deadlines or penalties."

The company said it has designed its platform to reduce the challenges associated with manual reporting, offering free certified payroll reports in both print and electronic formats, along with multi-state processing capabilities.

With government contracts accounting for nearly $500 billion in 2024, compliance remains a central issue for contractors pursuing public projects.