Someone You Know Is Manually Keying Certified Payroll Into a PDF Right Now

Steve Smith:

Hey everyone, welcome back to another episode of Work Tech Weekly. I'm Steve Smith, Managing Director of Growth at Rep Cap.

There's no shortage of construction tech right now. Field service platforms, project management tools, ERP systems. The vertical has seen a wave of investment and specialization. But one piece has remained stubbornly difficult. Prevailing wage compliance and certified payroll reporting. It's a requirement for any contractor working on federal or state-funded projects, and for most companies, it's still being handled manually, often by someone sitting at a desk keying payroll data into a PDF form.

My guest today is Coray Grove, founder of WagePath. WagePath is a purpose-built platform to automate prevailing wage calculations and certified payroll reporting for trades and construction companies. Coray has spent decades in the payroll and HCM space and built WagePath specifically because no one was solving this problem well.

In this conversation, we talk about why prevailing wage is harder than it looks, how fringe benefit offsets can unlock real cost savings and even open up new lines of business for contractors, and how WagePath fits into the broader HCM ecosystem as connective tissue rather than a system of record.

We also talk about AI's role in accelerating product development and what it means to build a focused, niche product in a market full of generalists.

Let's get into it.

Steve Smith:

Corey, welcome to the podcast. Really excited to have you here today.

Coray Grove:

Excited to see you again, Steve.

Steve Smith:

Yeah, I mean, we recently connected here — you live in the St. Louis area, so I'm glad to get another person from Gateway City here on the podcast. But also you're a fellow kind of payroll nerd and I think that there's a lot that really kind of jumps out at me about, you know, when we're talking about the frontline workers and it's kind of like a hot area of work tech and certainly very buzzworthy.

A lot of people talk it from a perspective of a market opportunity, but they don't talk it from having actually lived it. And that's not true for you. You've actually been one of those frontline guys. Why don't you tell us a little bit about your background and how you got to this moment right now?

Coray Grove:

Sure. So I grew up, I mean, from the early days I grew up in a construction-based household. And then, you know, I went off to college. I knew I didn't probably want to have to do the construction thing for the rest of my life, but I went off to college, after college was in the financial services world for seven years until I moved over to ADP and was in ADP's major account division for seven years, and then started IPS, which stands for Integrated Payroll Services, here in St. Louis.

And at the time, back then in oh five, there was — it meant something to be a regional player. And so we were very general. We didn't have a really a focus at that time, vertically focused at least. And then roughly 10 years into our time as a company, we noticed that there was just a tremendous amount of resources going into workforce tech specifically focused in on the trades and how companies were sort of decoupling their back office and really deploying the cloud at scale to manage their field operations.

And so we really focused in on specializing in the trades. And then by the time I ended up — we ended up selling IPS to Inova. And then I became their CRO. Roughly 15% of the business that we were doing up until the point where Inova was sold to UKG late last year is in the trades.

So we spent a lot of time there because it was very good to us and we invested heavily in integrations to maximize that.

Steve Smith:

Tell us a little bit about, you know, hey, you've had some exit, you decided to jump back in — tell us about Wage Path and why you were like, I need to do this right now.

Coray Grove:

Wage Path is a very niche product. So because I did so much work in the trades at IPS and Inova, I recognized one particular area that was really a challenge that I could never properly solve for, and most HCMs can't solve for in the core product.

And that is prevailing wage. Automating the prevailing wage calculations around the application of the rates by work classification, the fringe calculations, and how you actually can take advantage of deductions against that fringe for benefits you're providing to your employees through healthcare or time off. And that's all pre-pay. And then after the fact, producing those certified reports — the federal report, the different reports to LCP Track — that was never an easy conversation to have.

There were a couple of vendors that I used over the years that do this, but I was never impressed with the way that they showed up for the client. The fees they were charging, the way that they went about things — I didn't feel it was very transparent and I thought it was pretty inconsistent. So I felt like this isn't going away.

The amount of money that's going into infrastructure spending in this country is at an all-time high. And it's only gonna — I think from what we can tell — become more so. So there's a big need for this kind of prevailing wage certified reporting. There are some niche players that have really come into this HCM space that are focused on construction payroll, and there's a lot of money going into it, and I've observed that.

So my observation of the market is that there's a lot of HCM companies that are doing construction work that, if they don't take a more proactive stance on prevailing wage and certified payroll and being able to do it better, they're gonna lose those customers to the construction-specific payroll applications.

Steve Smith:

I mean, we talked about this when we met for the first time. I think that you're seeing this explosion of vertical SaaS and specifically around construction. I mean, there are so many major players that are handling everything but sort of the payroll component, and once you kind of get an idea of, oh, there's a lot of money there — I'm already doing time and attendance, I'm already doing the workforce management, I'm already connected to these other kind of master data records — why not jump into this and really start to cash some checks?

It really seems like, number one, a giant area of opportunity for the construction vertical SaaS players, but then also for the UKGs and the Workdays of the world. Hey, I better cover my flank so I don't get disintermediated on that. Are you seeing that play out in real time?

Coray Grove:

I am. It's the reception. So if I go back to the really the true roots of Wage Path, back in 2018, I brought on a construction landscaping client in the state of Oregon that I thought UKG could handle. UKG was our underlying technology chassis and I thought they could handle it well.

I misunderstood the requirements, and so I ended up having to build a product to front-end the UKG payroll product. While none of that code is being used with Wage Path, the concept that was developed through a custom application that I had written is the fundamental basis for how Wage Path operates.

Obviously that platform was just a singular platform, wasn't meant for commercial use beyond that one client. But it was something that I knew made sense for that client. And the client kept saying, why don't you offer this to other clients? Why don't you offer this to other companies? And I said, well, we're not in a position really to do that. That wasn't our core business.

And so I always felt like this was something that could be a core business. And with the money that's going into the payroll construction space and the market share that they're taking from the traditional HCMs, my position is I'm a moat for those traditional HCMs that have a lot of construction clients that need to improve the way that they deliver their HCM tech, by adding Wage Path into the front end or the back end for reporting purposes of that HCM.

Steve Smith:

You know, this is right up the alley of my audience. They really want to nerd out on these kind of like deep dives into product. And I think that getting to kind of talk to you about Wage Path — really, I was not aware of just the depth of certified payroll and just the — I mean, it's a signed document that you sign under penalty of perjury. That got my attention.

And then you start kind of looking at the other things that you're doing and you're kind of bringing together this certified payroll reporting. You know, so like these WH-347 documents and things like that, doing these prevailing wage calculations, which sound like calculating sending somebody to the moon, 'cause there's multi jurisdictions, multi trade, multi classification. Are they union? Are they not union? Are they St. Louis City or St. Louis County?

Coray Grove:

Exactly.

Steve Smith:

That kind of thing. And then, you know, getting into all of those, like you said, fringe benefit calculations and union reporting. It just seems like there's anything but plug and play when you're talking about that.

Coray Grove:

It's interesting, Steve, because I think that fundamentally the calculation of what we're doing is not super complex, actually. It's pretty straightforward. If you look at most wage determinations for a prevailing wage job — whether it's federal or state or even jurisdictional — it's comprised of really two key things. What rate do I pay for the type of work that's being done, and what's the fringe rate that has to be paid on top of the base rate for that particular job? That's the basis for it.

Now if a company wants to be super conservative, it's easy. They just pay the base rate, they pay the fringe rate, and they're off and running. But they could — if they are a company that's providing employer benefits to their employees, whether it's healthcare, time off, holiday pay, you know, there's a variety — you can take 401k match, there's a number of things that you can take and convert those values into an hourly rate equivalency and take those fringe benefits per hour off of that per-hour fringe rate in real time before it ever hits payroll.

That's the complexity, and that's where having your hooks into the HCM in real time matter, because you need to be able to pull those elections, with waiting periods, all of the time off that the employees are entitled to, the holiday time they're entitled to, all of those things. And then sort of convert that into data that can be converted into an hourly rate equivalency and in real time deducted from that fringe.

Steve Smith:

What I mean — sort of the light bulb moment for me is when you're talking about those offsets that you get from fringe benefits, just like, that's the ROI. When you think about that, it probably adds up to not a small number. That is a huge savings potentially for your customers.

Coray Grove:

It's really material. And there's a couple reasons why a customer isn't doing it. One, they've never done it because they just didn't know how to do it. So now they've been paying their employees using this methodology and they're afraid to change because they're afraid these employees are gonna revolt. Right. And you understand that.

But they also just didn't have the wherewithal or the knowledge to understand how to do it, because it requires them to — unless they have their pre-pay calculations somehow tied into their elections on the HCM side — they're at best estimating on the front end. Right. And so there's not a lot of easy solutions to do it right. And so sometimes the easier button is to not do it at all, pay the fringe and move on.

But what we're finding is it's pretty cool, because there are a lot of the construction companies, as they look at our tech and they look at the way that we can help them, they're like, you know, we can go after this business for the first time. That's less competitive than you'd think for these contractors. So now they're able to pursue business that they weren't able to pursue, at a higher profitability than they were previously.

Steve Smith:

Well, and that was — see, that was another light bulb moment from our conversation, where it's just like, you know, a lot of times when you start getting into a lot of this compliance-driven technology, it feels like a checkbox, it doesn't feel like the thing that's gonna unlock exponential business value. But when you start talking about what you just mentioned and how not only is there significant cost savings potential for your customers, but being able to unlock, hey, I can go bid on this project now and I can do it competitively — you're actually, I mean, you're a compliance product that is opening up the avenues to new lines of business.

Coray Grove:

We hope to be. Yeah, we hope to be that kind of partner to a company, where it sort of unlocks them — to use your term — to do things that maybe they weren't comfortable doing before.

Steve Smith:

Well, you know what's — what I always find interesting is talking to especially people in the payroll space. 'Cause I have a friend and a guy who's been an investor in this space for a while. One of the things he does is he keeps news stories about people who have gone to jail for non-compliance on payroll. And he goes, it would shock you how often that happens every month — he's like, I get two or three stories and I track it and I drag 'em out, 'cause people don't understand the ramifications of that.

So I mean, what's interesting is when you talk to people on the vendor side, they have horror stories that they can't put a name to. They'll be like, you're not gonna believe it, but there was this one time. What's the worst horror story that you've seen kind of related to this over the years? And obviously names will not be used to protect the innocent, or not innocent, as the case may be.

Coray Grove:

Well, I'll give you one example, a recent example. Thankfully, at this moment there is not a bad news part of the story. It's a good news — it's a feel-good story.

And that is, we were working with a company in the state of New Jersey that has all the things going on. They're union, they deal with two or three different unions but on an intermittent basis. They have a lot of prevailing wage jobs, and New Jersey is particularly picky and finicky when it comes to this. And they had not been filing certified payroll reports with New Jersey Hub the way that they were supposed to for a long time.

We started working with them. We started working on one project that just began at the beginning of this year, and they're gonna start reporting that one project because they thought that it might raise some flags to report all the previous ones. Beginning in January, when we produced the New Jersey CSV file in the format that they needed and they were able to upload it to the New Jersey website — we were on the phone with them while they were doing it — and your friend Rachel, who you know works for me of course, as you know, she was there and got to experience this. This client almost cried. I mean, it was because they're now compliant.

And it was really difficult for them to get to that point. So that was a meaningful story to me from a feel-good perspective. And I think that there's been a few others. The stories that kept me up at night for a long time that have nothing to do with what we're talking about — where local payroll companies are absconding with money, right, that was a nightmare. But thankfully I haven't personally seen a lot of really negative stories. I've seen some fines and I watch the news in terms of what's happening.

But I haven't personally — you know, seeing this one company that I'm dealing with now, there could be a downstream compliance hit that they take for the projects they haven't been reporting properly on, but that hasn't happened yet.

Steve Smith:

And I think that's sort of a good point, that certainly there are bad actors out there, but I think that most companies, most owners, they don't come to work every day saying, wow, I'm gonna figure out how to be non-compliant in payroll. They're either not aware of how to do it, or just sometimes maybe not even aware that — I mean, I wasn't even aware that this was as big a compliance hurdle as it was. You know, for people who maybe have never had to do certified payroll for a federal or state project, what does a contractor have to do on an average week just to stay compliant?

Coray Grove:

So fundamentally, the way you pay your employees has to be based upon the prevailing wage rate for that work classification. That's number one. That's sort of foundational. Number two is, if you pay overtime, that base rate has to be the floor at which you pay overtime. So time and a half, double time of that foundational rate. That's from a payment perspective.

Now, most federal projects follow the FLSA overtime rules. So that's pretty straightforward and simple. You follow it for everyone, whether it's a certified project or not — you're following normal wage and hour laws. But then of course, when you get into state or local projects, you're following those state and local labor laws. So your basic compliance with certified payroll really mirrors a lot of the normal wage and hour laws that you have to deal with.

So basically, are you paying the correct rate? Are you paying the correct fringe? Are you deducting the right proper credits? Are you able to place those values properly into the report? Now, some of these state reports are just absolutely bizarre in terms of how they have you reporting data. I mean, a lot of it — not to name any states, but Rhode Island doesn't make any sense. I'm just kidding. And Illinois is even a little bit weird, you know? So they have you doing things that are a little bit nonsensical.

I think the federal report is quite frankly very straightforward and pretty simple. But basically, are you paying the correct rate on the front end by work classification, with the right fringe? Are you deducting the right amounts if you're taking any fringe credits, and are you placing everything on the right report?

And you would think that sounds fairly straightforward. That front-end part is a bit complex. The reporting is more complex than you think because most of them are using a QuickBooks or a traditional HCM that does not transform that data properly to be fitted into that report. So you end up spending a lot of time manually keying into PDFs. You'd be surprised at how many companies we talk to where the payroll people are literally manually keying the payroll data into the PDF forms. So when they see us just load a payroll file and click generate report, and it generates that state's report or that federal report — it's just fun to watch, actually.

Steve Smith:

Well, you know, I mean, it makes my heart hurt just to hear about people having to manually key anything.

Coray Grove:

They do it. You would be surprised. I mean, this was a woman that we just met with. She's out in Oregon. She does some Washington State work and they do some California work. She's a pretty good-sized company, probably 300 employees, three different legal entities.

She's still working on filling out her WH-347 federal reports, and they're using a traditional HCM that I won't name, and that can't produce the report. She still hasn't filed her reports from back in December. They still have not been able to. And if you can't file the report, the contractors can withhold payment. So this company is behind almost three months in receiving money for the labor. Can you imagine how much labor dollars are sitting there?

And so there's a tremendous amount of opportunity for these companies if they can get that downstream calculation correct, get the payroll filled into these reports, get that report generated by the time the pay week ends. They should be able to get paid on a much more timely basis. Obviously they're not waiting on it — they're in compliance even though they're waiting on the contractor at that point, potentially, to pay them or the municipality.

Steve Smith:

But for a small business, that's huge.

Coray Grove:

It's huge. It is huge. It is huge. I'm surprised actually at some of the companies that are waiting on the amount of money they're waiting on because they haven't filed the reports.

Steve Smith:

Wow. That's shocking. Well, you know, one thing I'm kind of curious about is, obviously in all of the tech market — work tech market's no different — AI is a big theme. How is AI coming into your work? How is it changing it? How is it potentially improving it? What are you seeing both in the market and with your product?

Coray Grove:

Yeah. AI has had a huge influence. So, number one, if you look at the product that we have — the Wage Path platform — when I show it to people and I say that we developed it essentially in nine months, nobody would believe it because of how sophisticated it is. That kind of product, even a year and a half or two years ago, would've taken two to three years. So now we use a lot of AI coding to help with the platform. But I still have a CTO and a team of professional developers — just not a huge team, three people — because security is so critical to this space. I feel like there needs to be an adult in the room with regard to how we architect the system and how we ultimately make sure everything is secure and fits together.

But AI is a tremendous help. I'll give you a good example of developing software. Two or three years ago, if I were to say I wanna develop a feature, I would prototype that feature somehow, maybe through documents, screenshots, that sort of thing. Today, if I wanna develop a feature, I take a branch of my code, put it into a separate branch, vibe code or even code up the prototype of that feature, and then our development team can look at that and, if everything checks out, can merge it in. That means you can deliver features and products so much faster, and it solves problems faster. So it's a win-win for so many reasons. I love it.

And I mean, AI will continue to — by the way, that's from a tech coding perspective, but it's also how do we want to introduce more AI around crawling through all of the states' websites and looking for these wage determinations, and helping companies be able to — and basically, over time, centralize all of the different rates and work classifications for the different jurisdictions so that we can bring together a centralized resource. AI is gonna have a huge hand in that because we have to normalize a lot of data. That's not a project we've taken on yet, but it will come down the line.

And there's a whole lot of things that we can help companies with around just how they interpret their data through AI that they wouldn't have been able to do before. Coding, and then how do we interpret the data that's coming into the system — those are probably the two big things.

Steve Smith:

Well, you know, another area that is a frequent area of conversation in our space is integrations and integration strategies. Wage Path has a UKG integration already — how do you think about an integration strategy? Is it hey, we're gonna go deep with one platform, or do we want to be more like connective tissue across the whole HCM ecosystem?

Coray Grove:

Yeah, great question actually. So number one, because I have experience in the UKG ecosystem, I knew that product quite well, and so we were able to initially develop a proprietary integration into them right away. That's pretty strong. But I knew that I didn't have that expertise anywhere outside of UKG.

So we licensed a platform — I don't mind mentioning their name because I'm really proud of them — it's Finch, F-I-N-C-H. There are a couple of platforms out there that are similar to Finch, but Finch goes the deepest in the HCM space in my experience, in terms of the data that we're looking for, which is deep gross-to-net benefit elections — all the things that affect certified reporting.

Our application uses Finch like you would use Plaid to make a payment. You go in, you say create the integration, you sign into Finch, you sign into your provider like ADP or whomever through the Finch popup, and then it authenticates you and allows you to bring your data into Wage Path.

To me, that is absolutely a miracle. It's not cheap, but it allows us to immediately work with any company on the most basic level. Now, just in full disclosure, there are depths of integration, right. You could say you're integrated, but what does that really mean? I think fundamentally you have to be integrated from a demographics perspective — people don't wanna maintain employees in more than one system. So that's fundamental really to any of this, but the level of depth of gross-to-net and other things that we can get to varies by provider, even on the Finch network.

So we think integration is absolutely critical. We are never gonna be the system of record for a platform. So we have to be able to accept and mold and bring data in and out and make it easy for companies to sort of work with us as the connective tissue for this particular part of the business.

Steve Smith:

So when you think about certified payroll as a feature versus certified payroll as a platform, what does that mean for where Wage Path sits and how you're approaching the market?

Coray Grove:

Well, so is your question, meaning it's a feature of an HCM versus a platform as a —

Steve Smith:

Yeah, I mean, is it that you just want to be the best certified payroll and you don't have aspirations to build out a platform? Do you see opportunity there to build this out as a platform? What's sort of your, where do you land on that?

Coray Grove:

Yeah. So I'm 55 and I say that because it matters to me in terms of what I wanna do with this organization. One daughter is involved in the business, and I think that I don't have an interest in actually developing a payroll extension to this product. I really am 100% happy playing in this space, because I know — having worked with many of the largest HCMs — developing the level of sophistication in this one area into what they already have, without making a total commitment to this space, is really hard. Really hard.

So if you're making a commitment to the space, you're one of the construction payroll platforms, you're not a fit for Wage Path. We're a fit for those HCMs that are never gonna specialize in construction, but still wanna work with some construction companies that have some of this work. And so I'm 100% happy. And actually it's really fun to work with people to just solve this one problem and have them be able to feel like this is very additive and not an encumbrance.

Steve Smith:

Well, and it's interesting too because I think that there's been a lot of vendors in the work tech space who've been wringing their hands over the past few years, finding it hard to sell into companies just because people were being conservative with cash or they weren't sure how this whole AI thing was working out.

But I'm just kind of curious — have you seen some of that reluctance to spend? Or when you're getting in and you're selling what I think is not a nice-to-have product, it's a must-have — if you're working anywhere where you would need certified payroll — is it, once you kind of get into that conversation, does it become less about should I buy and more about how you buy?

Coray Grove:

You know, the difference between this space and where I came from, real talk, is that there's less urgency. In the traditional HCM world, people seemed to, when they finally got serious about looking at a product — because we're pretty focused in on a timeline with Wage Path in what we're doing — there's not necessarily a predefined deadline to do something. Right.

So I would say that it's not so much the price, it's more like, what we're finding with companies is some people have their hair on fire and they're ready to get help, but others are just a little less, you know, they're like, yeah, we need to do this, we want to do this, but maybe they only have one certified project right now and it's not as big a pain. Or maybe it's a couple and we're just taking, you know, that's 100% fine with us.

I think we have plenty of opportunity that's coming our way, but I just notice the urgency is different in this one particular vertical than it was in traditional HCM. I don't know how to explain it. It's, you know, but I'm humbled by the fact that I would send an email out for Wage Path and it's crickets. When I was at Inova, at IPS before that, for some reason people responded to my emails easier. You know what I mean? It wasn't, you know, so I'm like okay, you can kind of feel like you're starting over in some respects, but that's all part of the journey.

Steve Smith:

What's different this time? You're, you know, second time around as a founder with a startup — what are you noticing either about this moment in the market or just taking it on at a different stage of life that you've learned from?

Coray Grove:

You know, so I did a LinkedIn post on this, and I really believe that this is true: your reputation compounds if you've done it the right way. And so you don't realize it until you actually move out of wherever you are, heads down in that moment. And then when you get outside of that, people are reaching out to you or wanting to understand what you're doing in part because they've experienced enough with you to know that you're somebody that could be trusted and will do the right thing by them.

So I think it's different this time because I have that credibility in the market, in this space, that I didn't have when I first started the first time around. Also, it certainly helps to have a financial cushion that I've been able to develop at 55 that I didn't have at 30. And I'm just more knowledgeable and I'm more patient.

But I think it's also probably, in my opinion, the most exciting time to start a software company that there ever has been because of how — I think that even if I had started three years ago to do this exact same thing, I would've spent twice, three, maybe even four times the money to get to the same place at roughly the same time. So I felt like lightning struck, and fortunately I started when I did because the Claude Codes, the Codexes, everything that's coming along — and I'm noticing it month over month, Steve — the quality of the work that's being done in these applications is just compounding, really. So it's fun. It's a great time to do it. And Rachel and I were just talking earlier today — I mean, I'm having a blast. We're having a blast.

Steve Smith:

Well, Corey, thanks so much for joining and for a great conversation. This has been fascinating and given me a lot to think about, and I'd love to have you back again sometime.

Thank you.

Coray Grove:

Well, thank you, Steve. It was great. You did a great job and I enjoy watching your stuff and following you, and you have a great take on things. I really appreciate being here.

Steve Smith:

Certified payroll feels like a compliance checkbox. It feels like the thing you have to do. But for contractors who get it right, it becomes something else entirely. It becomes a competitive advantage.

When you can accurately calculate your fringe offsets in real time, you lower your effective labor cost on prevailing wage jobs. And when you lower your cost, you can bid on work you couldn't touch before. A compliance product becomes a business development tool. That's not a small reframe.

The other thing that stuck with me is how many companies are still doing this manually. Payroll people literally keying data into PDF forms. Contractors waiting three months to get paid because the report never got filed. These aren't edge cases. They're the norm for a huge portion of the trades market.

That's the gap Wage Path is going after. And it's a reminder that in work tech, some of the most interesting problems aren't the flashy ones. They're the ones that have been sitting in a spreadsheet, or a PDF, for twenty years.

If you enjoyed this episode, make sure to subscribe to Work Tech Weekly on Apple Podcasts, Spotify, or YouTube Music. And I'll see you next time.