Tracking time might not seem like the most vital administrative task, but for construction companies that do prevailing wage work, it is difficult and critical. Although it might seem to be fairly straightforward to capture hours worked and issue paychecks, there are many things that can go wrong. By using the following strategies, construction companies can identify and overcome their most troublesome time-tracking challenges.
There is a lot going on at the jobsite, so changing work classifications on the go often gets overlooked. The problem is that work classifications are directly tied to prevailing wage rates. When a worker changes from task to task in the field, it must be tracked so that wage determinations can be correctly assigned. Any mistake at this point will lead to additional payroll mistakes and leaves you out of compliance with prevailing wage laws.
Accurate time tracking is directly tied to profit for every business, but for construction companies it is even more critical. Having a clear understanding of the labor costs involved in completing tasks and projects is key to creating competitive bids. For this reason, every hour needs to be correctly tracked in accordance with the task being done. It must also be attributed to the project being worked on to get a complete picture of the true labor costs involved.
Wage determinations set the hourly wage and fringe benefit rate for every classification of laborer and mechanic. These rates apply to federally funded prevailing wage jobs and they come from wage surveys conducted by the Department of Labor. Some states have similar laws in place and publish their own wage determinations that apply to state-funded jobs.
Selecting the wrong wage determination for the work being performed is easy to do, but it leads to significant errors throughout the entire payroll process.
Forgetting to clock in and out, "buddy" punches and off-site punches are common problems faced by construction companies. This issue can take a big toll on the overall accuracy and efficiency of payroll processes. Unfortunately, they can also bite into profit and impact the accuracy of bids. When dealing with prevailing wage jobs, the problem is compounded because it’s a compliance issue that also requires correcting not only payroll but reporting as well.
Manual processes, like keeping track of hours with handwritten timecards, frequently leads to mistakes. These types of mistakes can be difficult to catch and time consuming to correct. Unfortunately, many construction companies still rely heavily on manual processes for many tasks like tracking hours from the field and moving information between timecards and their payroll system.
Mistakes happen, but construction companies can take steps to greatly reduce them in their payroll processes.
Solidify the payroll processes Without a solid payroll process in place, errors are far more likely to occur and go unchecked. Be sure to include every step required to complete payroll, including a timeline for submitting hours, as well as a process for verifying time, double checking work classifications and wage determinations. To make sure everything stays on track, formalize the processes with an official checklist and have everyone mark off tasks as they are completed.
Reduce manual processes Removing manual steps in the payroll process is critical for reducing errors. There are a few easy ways to do this, starting with moving to digital time tracking. Look for a system that makes it easy for workers to capture hours digitally and feeds directly into the payroll system or provides an export. This single change will remove several manual steps, reduce data entry mistakes and improve the accuracy of payroll.
Prioritize training Do workers in the field understand the importance of tracking changing roles? Does everyone on the admin team understand where to find and how to verify wage determinations? No matter how experienced the team, it is important to make continuing education a priority. This can be as easy as sharing articles about prevailing wages, watching webinars and sending reminders to everyone about best practices.
Payroll mistakes affect the welfare of workers, but they also undermine business profits and can create legal problems. While it is not possible to completely eliminate them, by utilizing these strategies companies can greatly reduce mistakes and feel more confident in their payroll and reporting processes.
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