i wholeheartedly agree with you and I'm very angry about it as well as my client too! I spent weeks and probably about 40+ hours just trying to get an answer from QBO Help.. it was escalate and even they couldnt fix it. It's very sad that they charge us as much as they do and have a software that can't even handle the basic accounting we need. My client is outraged as the only way we found around this is twice the work, you have to create Sub Customers "what we previously used as classes" and then you have to use Projects.. and create a whole project and enter the timesheets using that, then run payroll, and then after all of that extra data entry.. you will be able to run a report by customer and see the payroll by sub customer/job etc.  it's a huge pain and they have decided to go back to their old system as QBO is not worth it at this point. MAJOR FAIL!!! i have reported it also but they never pay attention to those in my experience.. it's really a joke! 

thank you for your feedback and response though as i felt like i was going crazy at one time and was the only one having this issue.