Digitize construction timesheets by deciding what each entry must capture (worker, job, cost code, hours, and classification on public work), choosing crew-based or individual clock-in, adding a daily foreman approval, and exporting approved hours straight to payroll and job costing.
Plan reviews connect field conditions, drawings, and the next decisions on a job. AI-generated illustration.
To digitize construction timesheets, replace the paper sheet with a phone or kiosk entry that captures who worked, on which job, on which cost code, and for how long, then route it through a foreman's daily approval and send approved hours directly to payroll and job costing. The goal is not just to get rid of paper. It is to get labor hours by cost code into the PM's hands during the week, while there is still time to fix a crew that is running over budget.
What the law requires (and does not)
Under the Fair Labor Standards Act, the U.S. Department of Labor says employers must keep accurate records for each non-exempt worker, including identifying information, hours worked, pay rates, overtime, deductions, and pay dates. The DOL also says the Act "requires no particular form for the records," and employers may use any timekeeping method, such as a time clock, a timekeeper, or employee self-reporting, as long as it is complete and accurate. In other words, digital timesheets are fine, provided the hours are right.
The DOL fact sheet says payroll records must be kept for at least three years, and records used to compute wages, such as time cards and work schedules, for two years. Many states set their own recordkeeping, meal break, and overtime rules, and public prevailing wage work adds certified payroll requirements, so check your state as well. See how to do certified payroll step by step for the public-work side.
Decide what each time entry must capture
Fields for a construction time entry
Field
Why it matters
Worker
Payroll and recordkeeping
Date, start, stop, breaks
Hours worked and overtime; state meal and rest rules
Job
Job costing and billing
Cost code
Labor tracking against budget by activity
Classification (public work)
Correct prevailing wage rate for the work performed
Equipment used (optional)
Equipment costing on the job
Per diem or travel (optional)
Reimbursements and job cost
Notes or photo (optional)
Proof of extra work for T&M billing
Keep the required list short. Every extra required field adds friction at 5 p.m. The construction timesheet template is a good starting layout.
How to digitize timesheets in 7 steps
Clean up your cost codes first. If foremen face 200 codes, they will pick the first one. Give each crew a short list of codes for the current phase. How to build a construction cost code structure helps.
Choose crew entry or individual clock-in. Crew entry (the foreman logs everyone) is fast and suits crews that move together. Individual clock-in from each worker's phone or a site kiosk gives more accurate start and stop times and reduces disputes. Many contractors use crew entry with each worker confirming their own hours at the end of the week.
Decide on location features. GPS stamps and geofences can confirm a clock-in happened at the job. Tell workers what is recorded and why, and check your state's rules on location tracking before turning it on.
Set the approval flow. Foreman approves daily, PM reviews cost codes weekly, payroll locks the week. Edits after approval should leave a record.
Connect to payroll. Approved hours should export to your payroll system or service without retyping. Check that overtime, classifications, and multiple rates come across correctly.
Connect to job costing. The same hours feed labor cost by job and cost code, so the PM sees budget against actual during the week.
Run one pay period in parallel, then stop paper. Compare the app's totals with paper for one cycle, fix gaps, and set a firm date after which paper is not accepted.
Worked example: a 35-person concrete contractor
Say a concrete contractor has five crews on three to six jobs a week. Paper timesheets come in Monday morning, the office manager keys about 175 worker-days of entries, and roughly one sheet in ten needs a phone call to decode a job or code. Payroll goes out, but the PMs do not see labor by cost code until the following week, after the slab is already poured.
After the switch, foremen enter crew time on a phone at the end of each day, choosing from 8 to 12 codes set for the current phase (forms, rebar, place and finish, strip). The foreman approves on the spot. By Tuesday afternoon, the PM sees that the Building B footing crew has used 210 of 240 budgeted forming hours with a third of the footings still to form. The PM moves an extra carpenter to the crew and asks the foreman about the delay, a week earlier than paper would have allowed. Monday payroll entry drops from most of a day to a review of exceptions.
Using digital time for more than payroll
Once hours are digital and coded, the same records answer questions that paper never could. Three uses pay off quickly:
Time and materials billing. Hours tagged to extra work, with a note or photo, become backup for a T&M invoice or a change order instead of a reconstruction from memory.
Estimating feedback. Actual hours per unit (per square foot of formwork, per fixture, per opening) flow back into the estimating database so the next bid uses real production rates.
Disputes. When a GC questions a back charge or a sub's manpower, dated, approved time records by area are far stronger evidence than a reconstructed sheet.
Mistakes to avoid
Rounding and default hours. An app that defaults everyone to 7:00 to 3:30 produces neat but inaccurate records. Make start and stop times real entries.
Shared logins on one phone. Each worker or foreman needs their own login so entries are attributable.
Smart Business Automator connects time to jobs and cost codes for job costing and helps prepare certified payroll on public work. See certified payroll automation.
Frequently asked questions
Are digital timesheets legal for construction payroll?+
Yes. The Department of Labor says the FLSA requires no particular form of records, and employers may use any timekeeping method as long as it is complete and accurate. State rules may add requirements.
How long do I need to keep construction time records?+
Under the FLSA, the DOL says payroll records must be kept at least three years and time cards and other wage computation records two years. State law and public contracts can require longer.
Should foremen enter time for the whole crew?+
Crew entry is fast and common. Many contractors add a weekly confirmation by each worker, or individual clock-in, to reduce disputes over hours.
Can digital timesheets handle prevailing wage jobs?+
Good systems let you record classification for each block of hours, which is needed to pay the right rate and to prepare certified payroll.
What is the hardest part of switching from paper timesheets?+
Usually the cost codes. If the code list is long or unclear, digital entries will be just as unreliable as paper. Clean it up first.
Deep dive on the expanded NY prevailing wage law taking effect June 18, 2026. Construction industry groups filed suit May 28 arguing the off-site fabrication expansion will devastate public construction in New York. This episode covers what the law requires, who it covers, the contractor lawsuit claims, how compliance works in practice, bid pricing adjustments, and the 7 steps every contractor must take before the effective date.
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Read the full episode transcript
Published transcript from Scaling Legends. It may contain transcription errors. View the source transcript.
Disclaimer. This podcast is for informational and educational purposes only and is not legal, financial or professional advice. All right. Glad we got that out of the way. Yeah, definitely. So welcome everyone to today's deep dive. Usually when a ticking clock is keeping a construction contractor awake at night, it's, you know, something physical. Oh, absolutely. Like a concrete pour that's curing too fast. Right. Exactly. Or like a crane rental that expires on Friday. But right now, there is this invisible legislative clock ticking down. And it is loud. It really is. It's sending shockwaves through the entire New York public construction sector. Because on May 28th, 2026. A massive lawsuit was filed by a coalition of construction industry groups. They're basically scrambling to halt this sweeping new law. Yeah,
a massive expansion to the prevailing wage law that takes effect in just a few weeks, June 18, 2026. Which is right around the corner. Right. And the implications are so severe that contractors are legitimately questioning how they're even going to price out their summer backlog. I mean, the panic we're seeing across the industry right now is entirely justified. And actually, speaking of getting ahead of complex changes, I should quickly mention that we're accepting beta testers for new Smart Business Automator features. Sign up at smartbusinessautomator .com. Beta testers get first access to new features and updates before public rollout. Which is super timely, honestly, given the massive compliance headache we're about to talk about. Yeah, exactly. So, okay, our mission today is to unpack this June 18 expansion. To really understand why the industry
is sounding the alarm, we first have to look at what the law used to be. Right, right. Contractors operating in New York, they know prevailing wage inside and out. It's the baseline wage rate, including specific fringe benefits mandated for public works projects. Like schools, roads, municipal buildings, that kind of stuff. Exactly. But historically, that mandate had a very strict physical boundary. The fence line of the job site. Yes, the fence line. If a worker was physically inside that fence, swinging a hammer, pouring foundation, welding steel, they got the prevailing wage. Okay, let's unpack this with an analogy. In the past, the prevailing wage only applied to the stage, right, like the actual construction site. But now, with this June 18 expansion, it applies to the prop shops, too. the offsite facilities
building the materials before they ever reach the site. That is a perfect way to put it. The new law completely obliterates that fence line. It now legally covers workers at offsite fabrication facilities. Wow. So how much of a logistical leap is it to suddenly track offsite workers? It's massive. If a worker is building a custom component for a New York project, but they're in a factory hundreds of miles away, they're suddenly pulled under this prevailing wage umbrella. Just because of where the material is going. Exactly. Jurisdiction is no longer tied to where the worker is standing. It's tied to the final destination of the material. I mean, let's ground this in a real -world scenario, because custom components, that sounds a bit tricky. It is. Like, if I needed standard 2x4s in the past, I bought commodity lumber. No prevailing wage.
Right. Commodities are different. But modern construction has shifted so heavily toward modularity to save time. So I'm not always buying raw lumber. I'm ordering prefabricated, custom -engineered roof truss systems. Say, from a facility in Pennsylvania? Yeah. To be shipped to a school project in Albany. Well, under the old rules, the prevailing wage only kicked in for the crew in Albany hoisting those trusses into place. Right. Under the new rules. The workers inside that Pennsylvania factory, the ones cutting and assembling those specific trusses, are now subject to New York prevailing wage rates. For the hours they spend on that specific order. Yes. You are asking a general contractor to monitor, verify, and take legal liability for the payroll of a third -party factory
that might not even be in the same time zone. Which totally explains the intense language in the May 28 lawsuit. Oh, absolutely. And, you know, we want to look at this impartially. taking sides here. But the plaintiffs, these major construction industry groups, they are not mincing words. Not at all. They are officially arguing this expansion will, and I quote, devastate New York's public construction industry. They're calling the requirements functionally unfeasible. And the legal mechanism they're using to fight this is actually fascinating. Yeah. Yeah. They aren't just complaining to a judge that the new rule is annoying. They're making a constitutional argument. rooted in the Dormant Commerce Clause. Right, exactly. The plaintiffs argue that the law unfairly targets out -of -state fabricators specifically to benefit New York -based shops.
Okay, let's look at the mechanics of that. Say you run a fabrication shop in rural Ohio. Your competitive advantage is your local economic reality, right? Right, your cost of living is lower. Yeah, facility overhead is lower, so your standard local wages are lower than what someone would pay a worker living in, say, Manhattan. But by forcing that Ohio manufacturer to suddenly adopt New York prevailing wage rates for a specific batch of materials, the plaintiffs are arguing the state is creating an undue burden on interstate commerce. It's like they're building an economic wall around New York. That's the argument. It artificially inflates the out -of -state shop's costs, so suddenly a local New York shop looks much more competitive on paper. So let me ask you this. Is this a feature or a bug of the new
law? Like, did lawmakers write this deliberately to act as a form of protectionism, or did they just fail to understand how multi -state supply chains actually work? Well, the courts will have to untangle the legislative intent, and that is notoriously difficult. Yeah, I bet. Lawmakers frequently state their goal is just to protect labor standards, you know, ensuring public money isn't driving down wages anywhere in the supply chain. Sure, which makes sense on the surface. But the plaintiff's counter that the actual mechanism deployed crosses the line into unconstitutional economic protectionism. But for a contractor navigating this today, this theoretical debate doesn't really matter, does it? Not at all. It takes a backseat to a very immediate, very dangerous dilemma. The calendar. Yep. June 18 is arriving,
whether the judge is ready or not. So what does a contractor do right now? Do you wait for a court ruling, like hoping for an injunction to pause the law, or do you just overhaul your entire business model today? Hoping for a last -minute legal injunction is a massive gamble. Right. It could bankrupt a firm. Injunctions require a judge to agree that irreparable harm will occur if the law isn't lost, which is a really high legal bar. So if June 18 hits, the law goes live and you're just waiting to see what happens. The penalties are catastrophic. Massive fines, contract breaches, withheld payments. You could even be debarred from bidding on future public works. Wow. So preparation for June 18 is mandatory. There's no waiting around. None. You have to be ready. And getting ready means facing the stark financial reality of this expansion. Which
brings us to the math. The math is sobering. It really is. We actually pulled data sourced directly from Smart Business Automator's market intelligence report, and the numbers are staggering. Yeah, they project a 40 to 60 percent above market wage differential for fabrication labor under the new rules. Okay, here's where it gets really interesting. Imagine pricing out a car, right? You lock in your budget, and suddenly you find out the engine you're buying from three states away. Just jumped 60 % in cost. Yeah. How do you even absorb that? Well, think about how that 40 to 60 % gap actually manifests inside a factory. Right. Let's go back to that Pennsylvania shop. Okay, let's say their standard wage for a skilled fabricator is $25 or $30 an hour. which is highly
competitive for their local market. Now they take an order for a New York public works project. Suddenly, for the 20 hours a specific worker spends on that New York order, the shop has to pay them an $85 an hour total package. Wow. $85 an hour? Yeah, to meet the prevailing wage, including specific fringe benefits. That creates absolute chaos inside the factory. Complete chaos. I mean, you have two fabricators standing right next to each other on the floor. One is welding a beam for a commercial building in Ohio, making $30 an hour. The other is welding a beam for a New York school, making $85 an hour. The internal pay structure of that facility just collapsed. Which means a lot of these out -of -state fabricators are just going to say no. Exactly. They are simply going to refuse to take New York Public Works
orders. They won't want the headache. And the ones that do take the orders? They're going to pass that massive 60 % labor cost spike directly back to the general contractor. Ouch. So contractors have to adjust their bid pricing immediately. Immediately. But the true nightmare scenario is for contracts that are already in the middle of procurement. Oh, man. Like you submit a highly competitive bid in March based on normal market rates. Right. The agency takes months to review it. The award isn't scheduled until July. And the June 18 law triggers right in the middle. You are suddenly locked into a bid that is financially underwater before you even break ground. Contractors in that specific window are navigating a minefield right now. I can imagine. They're having to consult legal counsel to determine if they can formally
withdraw and resubmit their bids without forfeiting their bid bonds. Which is messy. Extremely. Others are looking at mechanisms to claim a material change in law, trying to force the public entity to adjust the pricing post award. It's a very adversarial reality. And absorbing these costs is really only half the battle. The administrative burden is the other half. Oh, absolutely. It's a complete operational overhaul. So let's run through this. We have a strict to -do list. Basically, a seven -step survival guide for June 18th. Let's do it. Number one, supply chain audits. Right. The era of just ordering custom structural steel and not asking questions is over. You need to map out exactly where off -site fabrication is happening for every single component. Right. Finding the origin facility. Yeah. And distinguishing
if it's a commodity or custom fabrication. Exactly. Which leads to number two, the paperwork mountain. Certified payroll from those fabricators. And certified payroll is not just an invoice. It's a highly specific, legally sworn document. Detailing the exact hours, labor classifications, fringe benefits, all of it. Getting a third -party manufacturer who's never dealt with this to properly submit these weekly is an enormous, frictional drag. Definitely. Number three, subcontract language updates. You need legal armor. A standard purchase order won't protect you if that Ohio shop submits fraudulent payroll. You need legally binding, flow -down clauses explicitly mandating compliance and strict indemnification. Because if the state
audits the project, the general contractor is usually the one on the hook, right? Almost always. You need mechanisms to push that liability back down the chain. Okay, number four, bid repricing. We just talked about that. Updating the math for that 40 to 60 percent differential. Yep, essential. Number five, legal counsel. Getting professional advice on navigating this shift, especially for those mid -procurement bids. Number six. Compliance tracking. Setting up systems to monitor this ongoing. Because doing it manually is a guaranteed failure. And finally, number seven, owner notification. Communicating these incoming cost spikes upward to the local school board or department of transportation. They have to be formally notified about the financial and scheduling impacts. Okay, so looking at all seven of these. Tracking compliance on your own job
site is hard enough. Right. How does a contractor realistically track the certified payroll of a fabricator they've never met in a facility three states away? Well, let's look at a complex scenario because the line between commodity and custom is blurry. Okay, let's hear it. What if you buy a standard mass -produced steel I -beam from Michigan? It's a commodity. Okay. But your design requires them to make one single custom weld. or drill a specific pattern of holes just for your project before shipping. Does that one custom action... trigger prevailing wage for the whole facility? That ambiguity is the danger zone. The Department of Labor guidelines are incredibly dense. Trying to manage that manually with spreadsheets and sticky notes, reminding
a plant manager in Michigan to send payroll for three hours of drilling. Sounds impossible. The risk of human error is 100%. So manual tracking is dead. It has to be. That's why software automation shifts from a luxury to an absolute necessity. Right, which is why tools like Smart Business Automator are so critical now. it becomes mandatory infrastructure. A system like Smart Business Automator tracks those shifting out of state effective dates. automatically. Oh, that's incredibly helpful. Yeah. It generates compliance calendars tailored to these convoluted supply chains and flags missing certified payrolls before they trigger a state audit. So it basically removes the administrative guesswork. Exactly. In a process where a single oversight can cost tens of thousands in fines, it provides the visibility required
to prove to the state that you're actually monitoring your downstream suppliers. And that visibility is going to be crucial long after June 18th. Because while New York is the epicenter today, this isn't just a New York problem, is it? Not at all. It's a preview of a national trend. So we're on a national expansion watch. We are. According to the Broader Market Intelligence report, states like California, New Jersey, and Illinois are monitoring New York's rollout with intense interest. Why those states specifically? They have similar legislative environments. High union density, robust prevailing wage frameworks already in place, and a political appetite to enforce labor standards. So if New York survives the May 28 lawsuit, it makes this work. Those states are highly likely to adopt their own,
nearly identical versions in coming legislative sessions. Wow. So what does this all mean for the listener? I mean, it means if you build the infrastructure to handle this. off -site compliance in New York. Now, you're actually future -proofing your business. That is the golden rule going forward. Tracking labor classifications across your entire supply chain is no longer just a compliance necessity. It's a competitive advantage. A massive one. Contractors operating across state lines with this automated infrastructure will bid confidently. Their competitors will either drown in paperwork or bleed profit because they failed to model that 60 % wage jump. It really separates the forward -looking operator from the ones just winging it. Definitely. And as we wrap up, I want to leave you with a broader philosophical question to mull over. Lay it on
us. If prevailing wage now extends to off -site fabrication, where does the definition of construction actually end and manufacturing begin? Oh, wow. That is a blurry line. Right. As supply chains get more complex and modular, that blurry line is going to be the next great legal battleground. Is a factory building modular hospital rooms? A manufacturer selling a product? Or a construction subcontractor working under a roof instead of the sky? Precisely. Something to really think about. Well, that brings us to the end of our deep dive today. Thank you so much for joining us as we unpack the New York prevailing wage expansion and the shockwaves hitting the industry. It's going to be a wild summer. It really is. If you found this breakdown valuable, please make sure to like, share, comment, and subscribe
from wherever you are listening so you never miss an update on the forces shaping your business. See you next time.
