QUESTION:
I am an owner/operator, sole proprietor, or business
owner, and I do not receive payroll checks or pay myself an hourly salary. How do I handle certified payroll reporting for my own work, and how do I determine how much I am being paid for that work?
ANSWER:
On Federal Davis Bacon projects, anyone who is an FLSA 541 exempt employee is exempt from prevailing wage requirements. That typically extends to owners and supervisors. A working foreman must be paid prevailing wages.
Some states, such as California, require owners, partners, owner-operators and supervisors who perform actual craft work to be paid prevailing wages and documented on the certified payrolls. The California Department of Industrial Relations has provided the following guidance in how owners and owner-operators should calculate wages for the purposes of reporting on the certified payrolls.
"Even if you are paid by salary, draw, or contract payments, you still should be able to provide the following information for any work you perform on public works projects: (a) your name, address, and SSN (or FEIN, if you have no SSN); (b) the work classification for your prevailing wage work; (c) the hourly rate for that classification; (d) the number of hours that you performed that work; and (e) the estimated amount paid to you for your labor for that work. To calculate how much you were paid for your own labor, subtract all your other expenses (including materials, pro rata share of business overhead, and payments to other workers or subcontractors) from the gross contract price.
The net amount should be your labor cost, and it should be equal to or higher than the compensation required for your work classification (determined by multiplying your work hours by the applicable rates) in order to comply with prevailing wage requirements."
