Certified Payroll Record Retention: How Long to Keep Your Records
— WH347.io Team
Federal law requires certified payroll records to be retained for three years after project completion — but that's the floor, not the ceiling. Here's what documents you must keep, how state rules vary, and how to set up a digital retention system that makes audits manageable.
When a federal project closes out and the final payment clears, most contractors feel like the certified payroll obligation is done. It's not. The Department of Labor's record retention regulations under the Davis-Bacon Act require contractors to maintain detailed payroll records for three years after project completion — and those records can be requested by the DOL, the contracting agency, or a worker at any time during that window.
What goes into 'payroll records' is broader than most contractors expect. And for projects in states with their own prevailing wage laws, the retention period and document list can extend further. Getting the retention program right before a project ends — while the records are still easy to organize — is significantly easier than trying to reconstruct them two years later when an audit inquiry arrives.
The Federal Three-Year Rule
Under 29 CFR Part 5, contractors subject to the Davis-Bacon Act must preserve payroll records for three years after the completion of the contract. The three-year clock starts at project completion, not at the date a specific payroll was submitted. A project that runs from January 2024 to March 2026 requires records to be retained until at least March 2029.
The regulations also give workers and their representatives the right to inspect payroll records at the work site during the project. The contracting agency and the DOL can request records at any time during the active project or within the three-year retention period.
What Records Must Be Kept
The Davis-Bacon regulations specify a minimum set of records that must be retained for each covered employee:
- Name, address, and Social Security Number of each worker.
- Each worker's correct work classification(s) on the project.
- Wage rates paid — both the basic hourly rate and the fringe benefit rate.
- Daily and weekly hours worked — both straight time and overtime.
- Gross wages earned.
- Deductions from wages — federal and state income tax, FICA, and any other deductions.
- Net wages paid.
- Fringe benefit plan documentation — written plan documents, trust agreements, or evidence of bona fide fund contributions for each employee covered by a plan.
- Copies of submitted WH-347 certified payroll reports.
- Signed Statements of Compliance for each payroll week.
Keep copies of all submitted WH-347 forms, not just the underlying payroll data. If you submitted corrected payrolls, keep both the original and the corrected versions, along with a note explaining what was corrected and why.
Fringe Benefit Plan Documentation
Frequently Asked Questions
How long do certified payroll records need to be kept?
Federal Davis-Bacon regulations require certified payroll records to be retained for three years after the completion of the contract. The clock starts at project completion, not at the date a specific payroll was submitted. Some states — including New York (six years) and Illinois (five years) — have longer requirements for projects covered by state prevailing wage laws.
What records must be retained for Davis-Bacon compliance?
Required records include: each worker's name, address, and SSN; work classifications; wage rates paid (basic and fringe); daily and weekly hours; gross wages; all deductions; net wages paid; fringe benefit plan documentation; copies of submitted WH-347 forms; and signed Statements of Compliance for each payroll week.
Can certified payroll records be stored digitally?
Yes. Digital retention is acceptable under Davis-Bacon regulations, provided records are legible, complete, and retrievable within a reasonable time. Back up digital records in at least two locations, and organize them by project and payroll week so you can respond to an audit inquiry without searching through unstructured files.
Do fringe benefit plans need to be documented separately?
Yes. If you credit fringe benefits paid into a bona fide plan against the prevailing wage requirement, you must retain plan documents (summary plan description or trust agreement) and proof of contributions for each worker and each payroll period. These records must be kept for the full three-year retention period.
What happens if I can't produce certified payroll records during an audit?
Failure to produce records during a DOL audit is itself a violation. The auditor may draw adverse inferences from missing records — treating the absence as evidence that the required wages may not have been paid. In practice, missing records frequently lead to back-wage findings and, in repeat cases, can support a debarment proceeding.
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