How to correct wage shortfalls and avoid penalties
Overview
If an employee is underpaid on a PWA-covered project, you may still correct the issue without incurring the standard $5,000 per affected worker per year penalty—as long as specific timing and eligibility conditions are met.
Cure Payment Timeframe
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Wage shortfalls must be corrected, including backpay with interest, by the last day of the first month following the calendar quarter in which the underpayment occurred.
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Example: If an underpayment occurs in Q1 (January–March), the correction must be made by April 30.
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Eligibility Criteria to Avoid Penalties
One of the following must also apply:
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The worker was not underpaid in more than 10% of their pay periods for that project/year.
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The total underpayment was less than 5% of the wages they should have received that year.
How to Stay Ahead of Cure Deadlines
Reunion helps you manage this process efficiently:
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Penalties Page– Instantly identify underpayment issues, with penalty estimates, backpay amounts, and due dates.
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Quarterly Compliance Reviews – Review flagged items at the end of each quarter (or week/month) to ensure timely correction.
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Contractor Notifications – Notify contractors to review, verify or correct their data early.
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Backpay & Interest Processing – Issue corrections and document proof of payment directly through the platform as cure payments.
Key Takeaways
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Correct wage shortfalls promptly—you typically have one month after the quarter ends.
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Ensure one of the 10% or 5% thresholds is met to remain eligible for curing.