The Statement of Compliance: what each box certifies

The Statement of Compliance is the part of certified payroll that makes it certified. The regulation requires a signed statement with each weekly payroll, and it spells out exactly what the statement has to certify. Page 2 of Form WH-347 is the Department of Labor's version of that statement, and its wording tracks the regulation.

Who signs

The regulation names 3 possible signers: the contractor, the subcontractor, or "the contractor's or subcontractor's agent who pays or supervises the payment of the persons working on the contract."

For a small sub that is usually the owner or the office manager who runs payroll. A bookkeeper who processes your payroll can sign as your agent. Whoever signs is personally attesting to the contents, so the person should be the one who can see the timecards and the pay stubs.

The 3 certifications

The regulation, at 29 CFR 5.5(a)(3)(ii)(C), requires the signer to certify:

1. That the payroll for the period contains the required information, that the underlying payroll records are being maintained, and that the information and records are correct and complete.
2. That each laborer or mechanic, including each helper and apprentice, was paid the full weekly wages earned, without rebate, directly or indirectly, and that no deductions were made other than the permissible deductions in 29 CFR part 3.
3. That each laborer or mechanic was paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work actually performed, as specified in the wage determination in the contract.

Page 2 of the form breaks these into 6 numbered items so the fringe and apprentice details have a place to go.

The 6 boxes on the form

Box 1 is certification 1 plus the fringe language: the payroll is correct and complete, and the wage and fringe rates paid, including credit taken for bona fide plans, are at least the rates in the wage determination for the classifications actually performed.

Box 2 certifies that regular payrolls and basic records for the period are complete and accurate and will be made available on request.

Box 3 certifies that the classifications reported are the classifications of work each worker actually performed. This is the box that turns a misclassification into a false statement. Listing a worker as a laborer for hours spent operating equipment is a wrong number on the payroll and a false certification on page 2.

Box 4 is checked when any apprentice appears on page 1. You certify that they are registered in a bona fide program registered with the Office of Apprenticeship or a State Apprenticeship Agency, and you list the program name and the classification. An unregistered "apprentice" paid below the journeyworker rate is a wage violation; certifying box 4 for that worker adds a false statement to it.

Box 5 covers fringe. It certifies that fringe benefits were paid in cash, to bona fide plans, or both, and that where you claim an hourly credit for plan contributions, the plan information and per-worker hourly credit are listed in the table below the box. If column 6B on page 1 has any amount, box 5 and the table are required.

Box 6 is certification 2: full weekly wages paid, no rebates, no deductions other than those 29 CFR part 3 permits.

Boxes 1, 2, 3, and 6 must always be checked. Boxes 4 and 5 depend on whether you have apprentices and plan contributions.

The rebate clause

"Without rebate, either directly or indirectly" is aimed at kickbacks: any arrangement where a worker is paid the prevailing rate on paper and hands some of it back, or is charged for something as a condition of the job. The Copeland Act, the statute behind 29 CFR part 3, was written in 1934 to stop exactly that practice. A required "tool fee," a charge for a ride to the site, or a deduction for a hard hat the law says you must provide are all rebates in this sense. The permitted deductions.

What counts as a signature

The regulation allows "an original handwritten signature or a legally valid electronic signature." The form's instructions add that photocopies or scanned images of a signature do not satisfy the requirement.

A legally valid electronic signature under the E-SIGN Act is one attached to or logically associated with the record and executed by a person with intent to sign. Typing your name into a field in a system that authenticates you, or signing through a service like DocuSign, qualifies. Pasting a picture of your signature onto a PDF does not. If you generate the PDF and then print, sign in ink, and scan to send, the ink signature on the original is what makes it valid; keep that original.

Agencies and primes that accept electronic submission through a portal are required by the regulation to use a system that "requires a legally valid electronic signature."

The penalties, in order of likelihood

The payroll is rejected and payment waits. This is the everyday consequence and the reason to get the arithmetic right before you sign.

Back wages. If an investigation finds workers underpaid, the money is owed to them, and the contracting agency can withhold from the prime to cover it.

Debarment. Disregard of these obligations can bar a contractor from federal and federally assisted contracts, typically for 3 years.

Prosecution. The clause states that "the falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under 18 U.S.C. 1001 and 31 U.S.C. 3729." Section 1001 is the general false-statements statute, with fines and up to 5 years' imprisonment. Section 3729 is the False Claims Act, with treble damages and per-claim penalties, and it is the statute behind most certified payroll fraud cases because each weekly payroll supports a claim for payment.

What the signer should check before signing

Read page 1 against the timecards for 1 or 2 workers, including the overtime split. Confirm every classification appears on the wage determination with the same wording. Confirm that gross on the project equals hours times rates plus cash fringe on each row. Confirm every "other" deduction is on the permitted list or approved. If an apprentice appears, confirm the registration paperwork is in the file. Then sign.

The whole check takes a few minutes on a crew of 5. It takes longer to reconstruct 6 months later for an investigator.