Update: After my rant, and getting yet another phone call about not sending a report, but it turns out she just hadn’t seen it, I had a convo and told her that if the month ended on M – Th she would never see the report any earlier than the 9th. Woo hoo! She said she’d start looking for it on the 10th. Point for the good guys!
Dear local, city, county, state, and federal construction payroll reporting entities who require monthly reports by the 5th,
You are going about the collection of your payroll reports the wrong way when you assume they should be submitted for the previous month by the 5th of the following month. Let me explain why this is so.
Sometimes, the last day of a month falls on a Monday, which is the typical start of your average construction work week. This would mean that the first Tuesday, Wednesday, Thursday, and Friday of the following month would fall within the same payroll week as the last day of the prior month. I have never heard of payroll being dispersed to employees on a daily basis in this industry, but I haven’t worked everywhere, therefore, maybe I’m remiss in assuming that paying employees once a week, bi-weekly, twice a month, or once a month is standard procedure. Let us state, for argument’s sake, that payroll is typically dispersed once a week, on Friday, for the hours worked the week prior. We shall now go through the steps of processing payroll:
- Time cards must be generated by the supervisor of a job site during the work week (our hypothetical work week being Sunday the 29th – Saturday the 5th of some random month).
- It is submitted to the payroll department by a designated date of the following week. Why the following week you ask? Because what if employees need to work on the weekend? Their weekend overtime pay would not have been recorded by Friday. Let’s call this day Monday. In our hypothetical month that makes it the 7th, already 2 days after your due date.
- The payroll department then reviews the payroll and enters it into the accounting system and cuts checks. This can be a 2 day process in and of itself so let’s call it Wednesday the 9th.
- Checks are given to employees on the same day of the week as is designated by union contract or employment agreement if non-union, typically Friday. Why can’t you give them out earlier? Well you can if you aren’t working any more days that week, if the job is 4 ten-hour shift each week, or if the employee is leaving on a vacation, but if you were to hand out checks on days of the week prior to the agreement the employee could then state they believed it to be the “regular” payroll day and demand checks be cut the earlier day each week. Legally it could be construed as “establishing a precedent” nullifying the original agreement. What if payroll was so massive at your particular company that you could not print all the checks by earlier than Friday that week? Then there would be financial and legal ramifications for said company if they weren’t out on time by the “new” date because you paid them early to satisfy the desires of the payroll reporting system.
- Certified payroll is not generated until the same date as checks, the reports are completed only after all gross pay for all work performed and all deductions from checks has been recorded into the accounting system. Until this happens certified payroll would be inaccurate.
- Why does certified payroll matter? Because it is required to accompany the same reports you are requiring by the 5th of each month.
How do these steps affect you as the entity requesting these reports?
It means that if a union contract states employees are to be paid by Friday, checks will not likely be cut by the payroll department until Wednesday. If the last day of the prior month is a Monday that means the employees work all week through until Friday, and maybe even pull overtime on the weekend. Then payroll is entered and certified payroll reports are generated the following Wednesday. The very first date your reports are available with accuracy is the 9th of the month following the one you want the report for, but nooooooo……….. YOU WANT IT THE 5TH! The 5th is a Saturday in our hypothetical month! No payroll department is going to work Saturday to get incomplete reports to you. Payroll staff usually work for a salary! Or if they don’t their bosses certainly won’t authorize overtime for them to get a possibly incorrect report to you a couple of days earlier.
Here is a calendar to visually depict the events I have addressed.
You may now be thinking to yourself, “Why can’t they just run off a report for that one day and add it to the pile?” Well, if you know anything about certified payroll you know that the week ending dates must coincide with real weeks ending in the month. Further, there isn’t a responsible business person out there who would authorize their superintendents to process two sets of time cards in a week, their payroll department to process two sets of payroll information, checks, and reports in a week, creating less productivity in all departments just because you want to know that John Doe is a Native American, Journeyman, Carpenter, living in the 07852 zip code who worked 50 hours at that job site. It’s just not reasonable.
Now I completely understand getting reminder emails for late reported things if I’m being negligent, but let’s be reasonable here! I have no desire for auto-generated hateful spam email reminding me I’m late when I don’t even have the information in from the employees yet. And to make matters even worse this same circumstance happens if the last day of the month falls on a Monday, Tuesday, Wednesday, or Thursday. Those checks still likely will not have been cut and reports generated until the day after it’s due unless the last day of the prior month is a Friday, Saturday, or Sunday. Annoying!
My request is to please amend your reporting due date the 10th.