Certified payroll records: what to keep and for how long

The retention rule is short and its clock is longer than most contractors assume. Payrolls and other basic records must be "preserved for all laborers and mechanics working at the site of the work ... for a period of at least 3 years after all the work on the prime contract is completed."

The clock starts when the prime finishes the whole project. Your part might end 18 months earlier. A sub that pours foundations in the spring of year 1 on a project the prime closes out in the fall of year 3 keeps those spring records until the fall of year 6.

Three sets of records, same clock

The regulation names 3 groups, each with the same 3-years-after-completion period.

The basic payroll records. Everything you would keep for any payroll, plus the Davis-Bacon specifics listed below.

The certified payrolls themselves. Every weekly WH-347 or equivalent you submitted, with its signed Statement of Compliance. Since 2023 the clause says this explicitly: "The contractor or subcontractor must preserve all certified payrolls during the course of the work and for a period of 3 years after all the work on the prime contract is completed."

The contract documents. The contract or subcontract "and related documents including, without limitation, bids, proposals, amendments, modifications, and extensions." An investigator reading your payroll wants the wage determination that was in the contract, and the contract is where it lives.

What the basic records must contain

Section 5.5(a)(3)(i)(B) lists the contents. For each laborer and mechanic:

• name
• Social Security number
• last known address, telephone number, and email address
• correct classification or classifications of work actually performed
• hourly rates of wages paid, including contributions or costs for bona fide fringe benefits or the cash equivalents
• daily and weekly hours actually worked, in total and on each covered contract
• deductions made
• actual wages paid

The telephone number and email address were added by the rule that took effect October 23, 2023. The point is to let the Department of Labor reach workers owed back wages after a project is over and the crew has scattered.

Note the split between what you keep and what you send. The full SSN, address, phone, and email stay in your records. They must not appear on the weekly certified payroll, which carries only an identifying number. More on that rule.

Hours by classification

"Daily and weekly number of hours actually worked in total and on each covered contract" is the record that saves you in an audit. Timecards that show a worker's hours by day, by project, and by classification let you prove the split on the WH-347. Timecards that show 40 hours with no breakdown leave you unable to defend a worker who was paid 2 rates in a week, and the investigator's fallback is the higher rate for all 40. Two classifications in a week.

Fringe benefit records

If you took credit for contributions to a plan, the regulation requires records showing the commitment to provide the benefit is enforceable, the plan is financially responsible, the plan was communicated in writing to the workers, and the costs anticipated or actually incurred. Keep the plan document, the summary given to workers, the invoices, and the remittance confirmations. Fringe in detail.

Apprenticeship records

Contractors using apprentices must keep "written evidence of the registration of apprenticeship programs, the registration of the apprentices, and the ratios and wage rates prescribed in the applicable programs." Three documents: the program's registration, each apprentice's individual registration, and the program standards showing the wage progression and ratio. The apprentice rules.

Electronic records and portals

Records may be kept electronically. When an agency or prime requires payrolls through an electronic system, the regulation requires that system to allow the contractor, the agency, and the Department of Labor to access the payrolls "for at least 3 years after the work on the prime contract has been completed."

Do not rely on the portal as your only copy. Download the PDF of each payroll you submit and keep it with your own files. Portals change vendors, primes go out of business, and your obligation to produce the records does not move with them.

Who can ask for the records

The regulation requires you to make the records available for inspection, copying, or transcription by authorized representatives of the contracting agency and the Department of Labor, and to allow them to interview workers during working hours on the job. If you fail to submit required records or make them available, the agency may suspend further payments or advances of funds, and the failure can be grounds for debarment.

There is a quieter consequence added in 2023. A contractor that does not produce records within the time the Wage and Hour Division requests them is barred from introducing those records as evidence later in an administrative proceeding. If you could not find the timecards during the investigation, you cannot produce them at the hearing to dispute the back-wage computation. The Division will consider a reasonable request for more time; ask for it in writing before the deadline passes.

On request from the contracting agency or the Wage and Hour Division, you must also provide each covered worker's full Social Security number and last known address, telephone number, and email address, for use in an investigation or compliance action. Those details stay off the weekly payroll and come out of your files when the government asks.

A practical filing system

One folder per project, kept until 3 years past the prime's completion date, with 5 sections:

1. The contract, the wage determination with all modifications, and any conformance approvals.
2. Every certified payroll as submitted, in sequence, with signed statements.
3. Timecards or time records showing hours by day, project, and classification.
4. Fringe plan documents, invoices, and remittances; apprenticeship registrations and standards; written deduction consents; any DOL approval letters.
5. Correspondence with the prime and the agency, including rejection notices and corrected resubmissions.

Ask the prime for the completion date when the project closes and write it on the folder. Most retention failures are not deliberate; the folder was thrown out on the sub's own 3-year anniversary because nobody knew the prime's date.