Working with Contract Payrolls

A payroll is a vendor’s reporting of wages paid to employees for a given period of time for a specific agency contract. For each employee, the hours worked on each day for a given labor classification on a specific project must be reported. This is not a vendor's payroll system for payment and payroll tax deduction purposes, but a record based on the output from a vendor's payroll system.

When required by the agency, payrolls associated with the work performed must be recorded, reviewed, and approved by the agency. The approval process ensures that the calculations in the payroll are correct and that federal guidelines for wages and fringe benefits have been followed.

A contract payroll must be checked and approved at several levels before it can receive final approval by the transportation agency. A payroll goes through a sequence of phases, and it can move back and forth between them. The Certified Payroll Status component is used to track the payroll life cycle.

In Civil Rights & Labor, a transportation agency can choose between two workflow methods for inputting payrolls into the system:

External Access — With external access, prime contractors and subcontractors submit their payrolls using external access functionality. The agency then reviews and approves or rejects the payrolls as appropriate. When payrolls are entered (or imported) into Civil Rights & Labor using external access, the payrolls are progressed through an external workflow that provides appropriate access to both agency and non-agency (that is, prime contractors and subcontractors) users.

No External Access — If an agency chooses to implement payroll without using external access, the agency collects payrolls from contractors on paper documents or electronic files. The agency then enters (or imports) payroll data into Civil Rights & Labor. Such payrolls are progressed through an internal workflow that provides appropriate access to agency users only. This payroll data is not available to contractors via external access.

Workflow with External Access for Prime Contractors

The following diagram illustrates the payroll process for agencies that include external access for prime contractors:

Payroll Workflow for Agencies with External Access for Prime Contractors

When an agency uses external access for prime contractors, payrolls can progress through the system by using the following phases.

Initial

Payroll information is initially entered by prime contractors either through direct data entry or by importing electronic files. When a certified payroll is imported into the system, the system automatically validates the payroll to detect any errors that would normally be captured when the payroll is manually entered. If errors are found, the system does not load the payroll into the database and reports the errors to the user (see Importing a Payroll). If no errors are found, the system loads the payroll and sets its status to Initial. Payrolls in Initial status cannot be rejected but can be deleted.

After an external user enters or imports a payroll and then saves it, the Sign option becomes available on the Actions menu on the payroll's row. The payroll will not progress further in the workflow until an external user signs the payroll (see Signing Contract Vendor Payrolls).

When a payroll in Initial status is signed, the system automatically progresses it to Under Agency Review status.

Under Agency Review

In this phase, the agency reviews prime contractors' and subcontractors' payrolls. The first time a payroll is progressed to Under Agency Review status, the system automatically validates the payroll for more substantial payroll exceptions. The agency can flag exceptions for vendor notification, enabling the external user to review and respond to the exception if needed. When all the validation tests are completed, the system displays a record on the Process History Overview (see Viewing Process History) and updates the status on the Payroll Status page (see Maintaining Payroll Status and Understanding Payroll Exceptions).

If the payroll validation is successful (that is, it contains no payroll exceptions), and your agency uses the option for automatic approval of payrolls, the system automatically sets the payroll status to Approved and the Agency Accepted Date field to the current date. If your agency does not use the automatic approval option, an agency user must manually set the payroll status to Approved by clicking the Approve button.

When a payroll in Under Agency Review status is rejected, the system automatically sets its status to Agency Rejected and sets the payroll's Agency Original Not Accepted Date field to the current date (unless the field was already set to a non-null value).

If a change must be made to a payroll that has progressed beyond the Pending phase, a payroll modification must be created from the existing payroll (see Creating a Payroll Modification). The original will remain as an audit trail. It is recommended that the original payroll be rejected in this case, but this is not required in order to create a new modification.

Agency Rejected

A payroll enters this phase if the agency rejects the payroll during the Under Agency Review phase. When a payroll is in the Agency Rejected phase, an external user with vendor authority for the prime contractor is required to take one of the two following actions on the payroll:

Return the payroll to the agency. Navigate to the Status component on the Payroll Status page and click the Approved button. The system displays a Comments field in which you must enter an explanation. Click the Save button to progress the payroll to the Under Agency Review phase.
Create a payroll modification. After saving, the Sign option becomes available on the Actions menu on the payroll's row. The payroll will not progress further in the workflow until an external user signs the payroll (see Signing Contract Vendor Payrolls). After the payroll is signed, the system automatically progresses it to Under Agency Review status.

Approved

When an agency user reviews and approves a payroll, the payroll enters the Approved phase. Once approved, a payroll can only be changed by creating a payroll modification.

Workflow with External Access and a Tiered Review

The following diagram illustrates the payroll process for agencies that include external access and a tiered review:

Payroll Workflow for Agencies with External Access and a Tiered Review

When an agency uses external access with a tiered review, payrolls can progress through the system by using the following phases.

Initial

Payroll information is initially entered by prime contractors and subcontractors either through direct data entry or by importing electronic files. When a certified payroll is imported into the system, the system automatically validates the payroll to detect any errors that would normally be captured when the payroll is manually entered. If errors are found, the system does not load the payroll into the database and reports the errors to the user (see Importing a Payroll). If no errors are found, the system loads the payroll and sets its status to Initial. Payrolls in Initial status cannot be rejected but can be deleted.

When a payroll in Initial status is signed, the system automatically progresses it to Under Agency Review status if the payroll vendor is the prime contractor for the contract; otherwise, the system progresses the payroll to the Under Prime Review status.

Under Tier Review

During the Under Tier Review phase, subcontractors are responsible for reviewing subcontractor payrolls and progressing them to the next step in the process. The system does not progress the payroll further in the workflow until an external user for a subcontractor that has no Parent Subcontract ID approves the payroll, at which time the payroll progresses to Under Prime Review. (see Performing a Prime Payroll Review).

Under Prime Review

During the Under Prime Review phase, prime contractors are responsible for reviewing subcontractor payrolls and progressing them to the next step in the process. The system does not progress the payroll further in the workflow until an external user with vendor authority for the prime contractor reviews the payroll by executing the Prime Review task from the Actions menu on the Contract component header on the Certified Payroll Status page (see Performing a Prime Payroll Review).

When a payroll in Under Prime Review status is approved and forwarded to the agency, the system automatically sets its status to Under Agency Review and its Prime Accepted Date field to the current date.

When a payroll in Under Prime Review status is rejected and returned to the contractor, the system automatically sets its status to Prime Returned and its Prime Original Not Accepted Date field to the current date (unless the field was already set to a non-null value).

Returned

If the prime contractor returns the payroll during the Under Prime Review phase, or a subcontractor returns the payroll during the Under Tier Review phase, the payroll has status of Returned. When a payroll has a status of Returned, an authorized user for the payroll vendor can perform one of two tasks:

Return the payroll to the subcontractor with a transition comment added to clarify any issues the parent contractor might have reported. Navigate to the Status component on the Payroll Status page and click the Approve button. The system displays a Comments field in which you must enter an explanation. Click the Save button to progress the payroll to the next workflow phase.
Modify the payroll data. After you make changes to the payroll data (on the Payroll or Employee components) and save the modified payroll, the system sets the payroll back to the Initial phase and you must sign the payroll again (see Signing Contract Vendor Payrolls).

Under Agency Review

Agency Rejected

Return the payroll to the agency. Navigate to the Status component on the Payroll Status page and click the Approved button. The system displays a Comments field in which you must enter an explanation. Click the Save button to progress the payroll to the Under Agency Review phase.
Reject the payroll and return it to the payroll contractor. Navigate to the Status component on the Payroll Status page and click the Reject button. The system displays a Comments field in which you can enter a description of the reason for rejection. Click the Save button to progress the payroll to the Prime Rejected phase.

Prime Rejected

A payroll enters this phase when the prime contractor rejects a subcontractor's payroll after it has been rejected by the agency. When a payroll is in the Prime Rejected phase, an external user with vendor authority for the subcontractor is required to take action on the payroll. The payroll can only be returned to the prime contractor. If corrections are required on the payroll, a new payroll modification must be created from the existing payroll (see Creating a Payroll Modification).

Sub Returned

A payroll enters the Sub Returned phase after a subcontractor adds transition comments to a payroll in the Prime Rejected phase, and then returns the payroll to the prime contractor. When a payroll is in the Sub Returned phase, an external user with vendor authority for the prime contractor is required to take action on the payroll. The prime contractor can either accept the payroll and progress it to the agency, or reject the payroll and return it to the subcontractor.

Approved

When an agency user reviews and approves a payroll, the payroll enters the Approved phase. Once approved, a payroll can only be changed by creating a payroll modification.

Workflow with External Access and Proxy Payrolls

The following diagram illustrates the payroll process for agencies that include external access and proxy payrolls:

Payroll Workflow for Agencies with External Access and Proxy Payrolls

When an agency uses external access and allows proxy payrolls, payrolls can progress through the system by using the following phases.

Initial

Payroll information is initially entered by prime contractors either through direct data entry. The system sets the payroll status to Initial. Payrolls in Initial status cannot be rejected but can be deleted.

After an external user saves the payroll, the Sign option becomes available on the Actions menu on the payroll's row. The payroll will not progress further in the workflow until an external user signs the payroll (see Signing Contract Vendor Payrolls).

When a payroll in Initial status is signed, the system automatically progresses it to Under Prime Review status.

Under Prime Review

During the Under Prime Review phase, prime contractors are responsible for reviewing the proxy payrolls and progressing them to the next step in the process. The system does not progress the payroll further in the workflow until an external user with vendor authority for the prime contractor reviews the payroll by executing the Prime Review task from the Actions menu on the Contract component header on the Certified Payroll Status page (see Performing a Prime Payroll Review).

When a payroll in Under Prime Review status is rejected and returned to the contractor, the system automatically sets its status to Returned and its Prime Original Not Accepted Date field to the current date (unless the field was already set to a non-null value).

Returned

If the prime contractor returns the payroll during the Under Prime Review phase, the payroll has status of Returned. When a payroll has a status of Returned, the subcontractor must edit the paper payroll and resubmit it to the prime contractor for entry into the system. After the prime contractor enters the payroll information into the system, the system sets the payroll status to Initial.

Under Agency Review

In this phase, the agency reviews the payroll. The first time a payroll is progressed to Under Agency Review status, the system automatically validates the payroll for more substantial payroll exceptions. The agency can flag exceptions for vendor notification, enabling the external user to review and respond to the exception if needed. When all the validation tests are completed, the system displays a record on the Process History Overview (see Viewing Process History) and updates the status on the Payroll Status page (see Maintaining Payroll Status and Understanding Payroll Exceptions).

Agency Rejected

Return the payroll to the agency. Navigate to the Status component on the Payroll Status page and click the Approved button. The system displays a Comments field in which you must enter an explanation. Click the Save button to progress the payroll to the Under Agency Review phase.
The subcontractor must edit the paper payroll and resubmit it to the prime contractor for entry into the system. After the prime contractor enters the payroll information into the system, the system sets the payroll status to Initial.

Approved

When an agency user reviews and approves a payroll, the payroll enters the Approved phase. Once approved, a payroll can only be changed by creating a payroll modification.

Workflow without External Access

When an agency does not use external access, payrolls can progress through the system by using the following phases:

Pending

When payroll information is manually entered by agency payroll staff, the system automatically sets its initial status to Pending. The payroll will not progress further in the workflow until an agency user saves the payroll and progresses it to the next step in the process by clicking the Approve button on the Certified Payroll Status page (see Maintaining Payroll Status).

When a certified payroll is imported into the system, the system automatically validates whether the payroll has any errors that would normally be captured when manually entering the payroll. If errors are found, the payroll is not loaded into the database and the errors are reported to the user. If no errors are found, the system imports the payroll and sets the status.

If the payroll vendor is the prime contractor for the contract, the system automatically sets the status of the imported payroll to Under Agency Review; otherwise the system sets the status of the imported payroll to Under Prime Review.

Under Prime Review

Even though the agency is entering or importing all the payroll data into the system, the prime contractor is still responsible for reviewing the payroll information for subcontractors and providing that review to the agency. This phase provides the means for the agency to record the prime contractor’s comments about the payroll review, along with who reviewed it and when. An agency user can approve the payroll by clicking the Approve button on the Certified Payroll Status page (see Maintaining Payroll Status). When a payroll in Under Prime Review status is approved, the system sets the payroll status to Under Agency Review and sets the Prime Accepted Date field to the current date.

An agency user can reject the payroll by clicking the Reject button on the Certified Payroll Status page (see Maintaining Payroll Status). When a payroll in Under Prime Review status is rejected, the system sets the payroll status to Pending and its Prime Original Not Accepted Date field to the date the payroll was rejected (unless the field was already set to a non-null value).

Under Agency Review

In this phase, the agency reviews prime contractors' and subcontractors' payrolls. The first time a payroll is progressed to Under Agency Review status, the system automatically validates the payroll for more substantial payroll exceptions. When all the validation tests are completed, the system displays a record on the Process History Overview (see Viewing Process History) and updates the status on the Payroll Status page (see Maintaining Payroll Status).

If the payroll validation is successful (that is, it contains no payroll exceptions), and your agency uses the option for automatic approval of payrolls, the system automatically sets the payroll status to Approved and the Agency Accepted Date field to the current date. If your agency does not use the automatic approval option, you must manually set the payroll status to Approved by clicking the Approve button.

When a payroll in Under Agency Review status is rejected, the system sets the payroll status to Pending if the payroll vendor is the prime contractor for the contract. If the payroll vendor is not the prime contractor, the system sets the payroll status to Under Prime Review. The payroll's Agency Original Not Accepted Date field is also set to the current date (unless the field was already set to a non-null value).

If a change must be made to a payroll that has progressed beyond the Under Agency Review phase, a new payroll modification must be created from the existing payroll (see Creating a Payroll Modification). The original will remain as an audit trail. It is recommended that the original payroll be rejected in this case, but this is not required in order to create a new modification.

Approved

When an agency user reviews and approves a payroll, the payroll enters the Approved phase. Once approved, a payroll can only be changed by creating a payroll modification.