CERTIFIED PAYROLL AND PREVAILING WAGE — WHAT ELECTRICAL CONTRACTORS GET WRONG.
Prevailing wage public work requires certified payroll submissions, correct worker classifications, and fringe benefit rates that most electrical contractors are not accounting for in their bids. A journeyman electrician at $42/hour base wage costs $56–$64/hour total on prevailing wage work when fringe benefits are included. Most contractors bid with a single overhead rate built from private work labor costs — and lose margin on every public project because of it.
Most electrical contractors bidding public work are using the wrong overhead rate. Not because they don't care — because nobody showed them that prevailing wage labor burden is fundamentally different from private work, and that a single overhead rate applied to both will quietly destroy margin on every public job you win.
How Public Work Is Financially Different From Private
Prevailing wage work is not just private work with different paperwork. The labor cost structure is fundamentally different. Every worker on a prevailing wage project must be paid at least the prevailing wage rate for their classification — base wage plus fringe benefits — regardless of what you would normally pay them. If your electricians make $38/hour on private work and the prevailing wage is $42/hour, you pay $42. If the fringe benefit requirement is $18/hour, your total cost is $60/hour. Your private work overhead rate almost certainly does not reflect this.
One Overhead Rate for Both Work Types
Most electrical contractors use a single overhead rate in all bids — private and public. But prevailing wage work has significantly higher labor burden (fringe benefits) that does not appear in private work labor cost. A contractor using a 16% overhead rate calculated from private work labor costs is underpricing prevailing wage work by the difference in fringe burden — typically 3–6 points of margin on a public project.
Worker Classification Errors
Using the wrong prevailing wage classification is the most common compliance violation and the most expensive. A worker performing journeyman-level work classified as an apprentice is underpaid under prevailing wage law — the contractor owes the difference retroactively. Classification needs to match actual work performed, not crew payroll categories.
Certified Payroll Errors Create Back Wage Liability
Certified payroll is a legal certification — signing it means certifying that the information is accurate and that workers were paid correctly. Errors or omissions create back wage liability equal to the underpayment, plus potential penalties and debarment from future public work. Most electrical contractors building certified payroll manually from timesheets make at least occasional errors.
Prevailing Wage Compliance Built Into Job Costing
1. Separate Overhead Rates for PW and Private Work
Calculate two overhead rates: one for private work using your standard labor burden, and one for prevailing wage work that includes the prevailing fringe benefit requirement in the labor cost base. The difference between them is the additional overhead per hour of prevailing wage labor. Both rates go into the bid model — private bids use the private rate, public bids use the prevailing wage rate. Using the wrong rate in either direction costs margin or creates compliance exposure.
2. Worker Classification Built Into ControlQore
SPM builds prevailing wage cost codes in ControlQore by worker classification — Electrician (Journeyman), Electrician Apprentice Year 1–4, Foreman — with the correct prevailing wage rate and fringe benefit rate for each. When a worker's time is entered, it posts to the correct classification automatically. The certified payroll report pulls from that classification data rather than requiring manual assembly from timesheet data.
3. Weekly Certified Payroll from ControlQore Data
Certified payroll reports are generated weekly from the ControlQore time and classification data — not assembled manually from timesheets. The report format matches the required submission format for the applicable contracting agency. Review before submission takes 15–20 minutes. Systematic generation from job costing data eliminates most classification and rate errors.
4. Correct Wage Determination Before Bidding
Before bidding any prevailing wage project, pull the current wage determination for the project's location and work type from SAM.gov (federal) or the applicable state database. Prevailing wage rates change periodically. Bidding with a rate that was current 18 months ago and has since increased means the labor cost in the bid is wrong. SPM pulls the current determination at bid time for every prevailing wage project.
