Certified Payroll on Public Projects: Review Before You Submit
Certified payroll is routine on Massachusetts public construction projects. That does not mean it should be treated routinely.
In Commonwealth v. BPI Construction Management, Inc., 105 Mass. App. Ct. 1134 (2025), BPI held carpentry subcontracts on two public works projects in Westport and Middleborough. BPI hired Superior Carpentry, Inc. to provide labor, and Superior in turn hired workers through another company.
Those workers were paid less than the applicable prevailing wage. Superior nevertheless prepared certified payroll reports stating that the workers had been paid in compliance with the Prevailing Wage Law.
BPI did not review the underlying records or take steps to verify Superior’s compliance. It then used the certified payroll reports to obtain payment on the projects.
The Attorney General later brought claims against BPI under the Massachusetts False Claims Act. The Appeals Court affirmed the judgment against BPI, including the determination that BPI used the false payroll reports to obtain payment with deliberate indifference or reckless disregard for whether they were accurate.
BPI also attempted to bring Superior and the projects’ general contractors into the case. Those efforts were unsuccessful. The court held that BPI could not pursue contribution or indemnification for the Commonwealth’s False Claims Act claims and rejected later contract and Chapter 93A claims that it viewed as an attempt to repackage the same theories.
For contractors and subcontractors working on Massachusetts public projects, the lesson is practical. Certified payroll from a lower tier subcontractor should not simply be passed along without review.
That does not mean every payroll submission requires a forensic audit. It does mean contractors should have a process for reviewing the records they receive, identifying obvious discrepancies and following up when something does not look right.
The party that prepared the bad payroll may have created the problem. As BPI shows, that does not necessarily prevent others in the contracting chain from facing substantial exposure when those records are used to obtain payment.
Categorized: Payment
Tagged In: payment, payroll, public projects
