Certified Payroll in Microsoft Dynamics AX 2012

Understanding Certified Payroll and Prevailing Wages

In the USA for government projects or project subsidized by the government there are laws dictating how much the workers involved must be paid. These workers are typically contractors or subcontractors involved in construction. When a company pays there employees for working on these projects they must be paid the amount as specified by the law. This is called the prevailing wage.

The prevailing wage consists of two parts, the base wage and the fringe benefits. These wages are based on the workers occupation, their level of skill, and the project location. Because of this the prevailing wages for one worker could differ vastly depending on which projects they are working on.

When a company complies with these prevailing wage laws and runs a payroll it is called Certified Payroll.

Features of Certified Payroll and Prevailing Wages in Microsoft Dynamics AX

CEM’s Certified Payroll Module allows Microsoft Dynamics AX to run certified payroll. Based on a few setups the system will automatically apply prevailing wages for workers on certified projects. This simplifies and automates the certified payroll process to prevent compliance errors.

The module allows for a business to set up labor classes for different employees. Depending on an employee’s labor class they qualify for different wages and fringe. This labor class can then be selected in the employee’s page under the payroll setups.

The module links to the Projects Module allowing a business to indicate if a project is a prevailing wage project or not. By simply checking a button in your project setup the system will automatically pull the prevailing wages into the payroll module.

These prevailing wages as mentioned above differ from project to project. To facilitate the different rates the module allows for a business to setup multiple rates for a worker based on their projects. Both the base rate and the project fringe can be set to equal the total prevailing wage.

The Certified Payroll module is fully integrated into the Timesheet and Payroll Modules. When a worker submits their timesheet they simply have to select the project and the activity. As the timesheet is pulled into earning statements the above features will come into effect.

If the worker indicated an onsite activity the earning line will apply the correct tax region as well as pull in the prevailing wage rate. The worker can enter multiple projects and the system will populate the correct rates for each individual line and project.

The system will also check the workers base compensation against the prevailing wage. If the prevailing wage is lower than the employee’s base rate then the employee’s base rate will be paid instead. The base compensation will also be paid in the worker selected an activity that is offsite from the project.

This takes out all of the manual work for both the worker and the payroll department by automating both the taxes and the rates.

Beyond the basic project fringe the Certified Payroll Module allows for the company to assign indirect cost fringe to an employee as well. This indirect cost will be taken out of the project fringe automatically when the earning statement is generated.

If the indirect cost is greater than the project fringe then the workers rate will just be the base pay rate for that project.

When Certified Payrolls are run it is closely monitored by the government to verify compliance. To assist with this the Certified Payroll Module comes with the WH-347 report. Simply select the time period you wish to run the report for and system will fill out the report for you.

This summarizes the main features of CEM’s Certified Payroll Module. Please contact us for a demo if you would like more information.