Deductions on Certified Payroll: What the Copeland Act Allows

David Gul · Last updated September 18, 2026

The Copeland Act regulations at 29 CFR part 3 list the deductions a contractor may take from a worker’s pay on federally funded construction without asking anyone: taxes, court-ordered payments, bona fide wage advances, benefit plan contributions the worker consented to in writing before the work, credit union payments, union dues under a collective bargaining agreement, charitable contributions the worker authorized, board and lodging at cost, and safety equipment of nominal value the worker chose to buy. Anything not on that list needs the Secretary of Labor’s approval under 29 CFR 3.6 before it is taken. Column 8 of Form WH-347 shows them, and paragraph 1 of the Statement of Compliance certifies that nothing else was deducted.

Why the list is closed

The Copeland Act was written against kickbacks: a contractor paying the prevailing wage on paper and taking part of it back. So the regulation does not say what is forbidden; it says what is permitted, and 29 CFR 3.9 makes any other deduction prohibited unless approved. A deduction that is perfectly ordinary in private work, a tool purchase or a uniform charge, is a violation on certified payroll unless it fits a permitted category.

Permitted without approval, 29 CFR 3.5

Deduction	Conditions
Required by law: federal and state income tax withholding, social security	None beyond the law itself
Repayment of a bona fide prepayment of wages	The advance was made without discount or interest, in cash or its equivalent, with the worker free to use it as they chose
Amounts required by court process to be paid to another	Not where the deduction favors the contractor or an affiliated person, and not where there is collusion
Contributions to benefit funds: medical, pension, death, injury, illness, disability, unemployment, vacation, savings, or insurance for any of these	Not prohibited by law; consented to in writing and in advance of the period the work is done, with consent not a condition of employment, or provided for in a bona fide collective bargaining agreement; no profit to the contractor or an affiliate; for the worker’s convenience and interest
Credit union loan repayments or share purchases	Requested by the worker; federal or state chartered credit union
Contributions to governmental or charitable organizations	Voluntarily authorized; the Red Cross and 26 U.S.C. 501(c)(3) organizations are the examples given
Regular union initiation fees and membership dues	Under a collective bargaining agreement that provides for the deduction; fines and special assessments are excluded
Reasonable cost of board, lodging or other facilities	Meets Fair Labor Standards Act section 3(m) and its regulations, with the extra recordkeeping that brings
Safety equipment of nominal value bought as the worker’s own property	Not equipment the law requires the contractor to furnish; at no more than the contractor’s cost; no return to the contractor; with advance written consent or a collective bargaining agreement

Everything else: approval first

29 CFR 3.6 covers deductions the Secretary of Labor may approve on written application. Approval requires that the contractor, subcontractor or any affiliated person makes no profit or benefit from it, directly or indirectly, and that the deduction is not otherwise prohibited by law. The approval, once given, covers the applicant’s current and future contracts for a year. Tools, uniforms, damage to equipment and cash shortages are the usual candidates, and without an approval on file they are not permitted deductions.

Consent in advance

The timing rule is stricter than most contractors assume. For a benefit fund deduction, the worker’s written consent must be given in advance of the period in which the work is to be done. A signed authorization that accompanies the first payroll the deduction appears on satisfies the agency’s request for a copy; it does not make a deduction lawful if the consent was signed after the work. Keep the consent with its date, and take the deduction only from pay for work after that date.

On the form

• Column 8 has four parts: federal income tax withholding, FICA, other (with a description), and the total.
• The total is subtracted from column 7B, the gross for all work, to give column 9, the net wages paid. Deductions come off the whole week’s pay, not one project’s share.
• Page 2, paragraph 1 certifies that no deductions were made other than those permitted by 29 CFR part 3, and gives a space to list any other deductions taken; a permitted-with-approval deduction is listed there, with the approval on file.

More in this series: The Statement of Compliance on Form WH-347: What Signing It Asserts · The Mistakes That Get a Certified Payroll Rejected · All certified payroll guides