How to Solve Construction Payroll Challenges | Civalgo

March 13, 2023
| Originally Published

Construction companies face unique challenges when it comes to payroll. The industry is heavily regulated, with various laws and regulations that must be followed to ensure compliance. Multiple subcontractors, different payment schedules, and different types of workers, including unionized workers, can make construction payroll processing difficult, time-consuming, and prone to errors.

Most common construction payroll challenges

Complicated wage rates and union rules

Wage rates for workers in the construction industry can vary widely depending on the region, the worker’s level of experience, the type of work being performed, and even the type of construction they’re working on. All of these factors make time tracking for contractors very complicated.

One of the biggest construction payroll challenges is managing payroll for unionized workers, as unions have strict rules about pay rates, overtime, benefits, and other aspects of compensation. Construction companies must ensure that payroll calculations comply with union rules and that union dues and contributions are correctly deducted and paid.

Multiple payment schedules

Another unique issue for construction payroll is the need to track and manage multiple payment schedules. In construction, it’s common to pay subcontractors and suppliers on a different schedule than permanent employees. This can add an extra layer of complexity to the payroll process, requiring multiple payment runs, different payment methods and payment frequencies.

It’s up to you to ensure that all payments are accurate and made on time. There are few things workers are less forgiving about than late payments, which can cause hardships and financial penalties.

High-stakes errors

With all of these factors to consider, manually calculating and processing payroll is often a time-consuming and error-prone process. Inaccurate payroll can have serious and expensive consequences, including underpaid or overpaid workers, incorrect tax filings, and compliance violations. Failure to comply with union rules can result in costly fines, legal disputes, and damaged relationships with the union.

Construction payroll software to the rescue

To overcome these challenges, construction companies can adopt various solutions to streamline their payroll processes. Cloud-based construction payroll software designed specifically for the construction industry can help companies automate the collection, coding and processing of payroll information, significantly reducing their payroll efforts and associated costs.

Some construction payroll software, such as Civalgo cloud-based construction software, integrate construction time tracking with payroll processing, allowing you to seamlessly export payroll data to your current payroll processing system. Here’s how it works:

  1. Civalgo cloud-based construction software captures employee hours worked and automatically calculates hourly wages and overtime based on pay rules you and your account manager set up during configuration — such as occupation, work type, union wage rates, and benefits.
  2. At the end of the pay cycle, you simply export this payroll information, already coded and calculated, as a CSV or Excel file. You can now import your payroll data to your payroll processing system or use the report for other business purposes, such as tax compliance or funding employee benefits.

As a cloud-based construction software, Civalgo also enables mobile construction time tracking, so contractors and subcontractors can fill out their timesheets from anywhere using their mobile devices. This means no more chasing workers down for their daily or weekly hours and less risk of payment inaccuracies.

At the end of the day, while construction payroll processing can be challenging, with the right tools, construction companies can manage payroll efficiently and accurately and in compliance with regulations. Ready to automate? Book a free demo and discover how Civalgo cloud-based construction software can help you maximize your potential and profits.

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