Seven things that trigger a certified payroll audit

What a reviewer does first

Nobody starts by checking arithmetic. A compliance reviewer scans for patterns that suggest something is wrong, and only then reads the numbers. Knowing what those patterns are is most of staying out of trouble.

1. A gap in the payroll sequence

Payrolls are numbered consecutively. A missing number reads as a missing payroll, not as an idle week, and a week with no work needs a non-performance payroll to keep the sequence intact.

2. Everybody at the same classification

A site where every worker is a labourer, on a job that plainly involved electrical and mechanical work, invites the obvious question. Classification is by the work performed, not by the job title on the contract.

3. Nobody ever works overtime

A construction crew with no overtime across a whole project is unusual enough to look at. So is a crew where everybody works exactly forty hours every week.

4. Round numbers everywhere

Hours that are always whole, rates that are always exact, deductions that never vary. Real payrolls are untidy.

5. Apprentices out of ratio

Reduced apprentice rates are permitted only under a registered programme and within the ratio the programme sets. More apprentices on site than the ratio allows means the excess must be paid at the journeyman rate, and that is a straightforward underpayment.

6. A subcontractor with no payrolls at all

The prime is accountable for its subcontractors’ submissions. A tier-two sub who has never filed is the prime’s finding, and it is usually discovered at closeout when retainage is being released.

7. Fringe benefits claimed with nothing behind them

A fringe rate discharged into a plan has to be a bona fide plan with contributions actually made. Claiming a fringe credit with no plan and no cash payment is the finding that produces back wages rather than a correction.

What an audit actually costs

Back wages, interest, and on federal work the possibility of withheld contract funds and debarment. The money is rarely the worst part — a contractor who cannot bid public work has lost the business line, not a payment.

The prevention is the routine

Weekly filing without gaps, classification taken from the daily work rather than the job title, fringes evidenced, and subcontractors chased on the same cadence as your own crews. None of it is clever and all of it is somebody’s actual job — which is the reason it lapses on a busy project.