Last updated: October 2026
Union payroll: prevailing wage and certified payroll on union jobs
On Davis-Bacon jobs, workers are paid by the work performed, not the worker's skill. Under 29 CFR 5.5(a)(1)(i), the wage determination rate follows the classification of work actually performed.
Prevailing wage and the Davis-Bacon layer
On federally funded construction projects, the Davis-Bacon Act requires contractors to pay prevailing wage rates as determined by the Department of Labor. Prevailing wages include both a base hourly rate and a fringe benefit rate for each trade classification. The rates are published by the DOL and vary by county and trade.
On a prevailing wage job, you must pay at least the published base rate in cash wages. The fringe portion can be paid as cash wages, contributed to bona fide benefit plans, or split between the two.
The gotcha is the classification match. The DOL prevailing wage determination lists specific trade classifications with specific rates. The classification on your certified payroll report must match the determination exactly.
Certified payroll reporting on union jobs
Contractors on prevailing wage projects must submit weekly certified payroll reports using Form WH-347 or an equivalent format. The report shows every worker's name, trade classification, hours worked each day, hourly rate, gross pay, deductions, and net pay. The contractor signs a statement of compliance certifying that the wages are correct and that no rebates or kickbacks occurred.
The reports are due weekly. Not biweekly. Not when you get around to it. Weekly, covering the prior work week. On federal projects, the DOL can debar a contractor from future federal work for willful violations of certified payroll requirements.
The certification is a legal statement that the numbers are accurate as of the submission date. Filing inaccurate reports, even with the intention to correct them later, is a compliance violation. Reconcile first, certify second.
The union payroll overtime trigger
Federal law requires overtime after 40 hours in a week. Some state laws require daily overtime after 8 hours. Some union agreements require overtime after fewer hours or on specific days regardless of total weekly hours. Running time and a half on the wrong trigger shortchanges workers and creates a wage claim.
What to do this week
Pull every active collective bargaining agreement (CBA) for trades working on your current projects. Verify that the wage rates, fringe contribution rates, and fund remittance deadlines in your payroll system match the current agreement. CBAs are renegotiated periodically, and rate changes take effect on specific dates. If your system is running last year's rates, every paycheck since the effective date is short.
Check your last three months of fund remittance reports against the actual payments sent. Confirm every payment arrived before the due date.
If you are bidding prevailing wage work and currently using standard payroll software, get a quote from a construction payroll company that handles certified payroll reporting and prevailing wage compliance.
Frequently asked questions
What is union payroll?
Union payroll is the process of paying workers covered by a collective bargaining agreement, including calculating wages at negotiated rates, computing employer fringe benefit contributions to union funds, generating fund remittance reports, and complying with trade-specific overtime and classification rules.
How is prevailing wage different from union scale?
Union scale is the rate negotiated in the collective bargaining agreement between the union and the employer. On a prevailing wage project, you must pay at least the prevailing rate. If the union scale is higher, you pay union scale. If prevailing wage is higher, you pay prevailing wage. The fringe requirements may also differ between the two.
This is not legal or financial advice. Consult a qualified professional for your specific situation.