Top Payroll Problems and How To Avoid Them – Part One

Managing company payroll is overwhelming for many Human Resources staff. There are several real issues that do come up when completing company payroll. Keep in mind when the issues are identified they are normally simple to address. Here are the top payroll issues and how to address them. They are as follows:

Outmoded Payroll Methods

Companies need to invest into a payroll service. The suite of services offered by online payroll companies includes timekeeping a component that records staff time from when they start work, go to lunch, return from lunch, and when they clock out when the workday ends. Employing a old timekeeping system or one that has errors from time to time can create a myriad of problems including tardy payroll or incorrect overtime. Wage and hour mistakes, such as short paychecks or unearned overtime, can create a series of problems that can snowball into bigger ones.  

Recent surveys report that close to 30% of companies in the U.S. are using payroll systems that are a decade old or more.  Payroll professionals are trapped in overwhelming situation that is difficult to deal when using an outdate payroll system. Essentially, they are required to count on a payroll system that gives them reduced insight into the effect payroll has on the total performance for their entire company.

Outdated payroll systems cannot be counted on, particularly when a company is up against a time constraint. When a system crashes and employees may not be paid on time, the Human Resources department may be forced to cut manual checks instead. This type of problem is a huge waste of time and resources.  

Another issue that comes up is when staff work overtime inadvertently. When staff is reporting time haphazardly or it is being calculate incorrectly, company overtime has been known to be the reason companies have serious wage and hour problems. Companies should install an accurate time-tracking system that reports overtime directly to the Human Resources department. Companies big and small need to take a look at spending the money for an online payroll provider which will safeguard correct time keeping records and the correct calculation of overtime pay and rates.   

2021 Freelance, Gig Workers and Remote Employees

Each state and country have its own set of policies and laws on the books when it comes to employee classification. Be certain to complete the homework needed to completely comprehend the different set of regulations for each so you can adjust how you pay and classify employees according to their location.

Many employers, including your company, may not be knowledgeable of the myriad of different states employment and wage laws and tax regulations. Prior to bringing a new staff member onboard that will work out of state, take action to make certain your payroll team member on, learn the laws of that state so the company can take the necessary action to follow with respect to wages, laws, and taxes regarding the new employee. For instance, your current payroll system may not permit your company to issue payroll check to an employee in a different state.  

Due to the advent of companies moving toward remote workers and navigating away from in-office workers, making that transition may necessitate hiring a consultant to help smooth out this major change. It is not practical for the head of a human resources department and its staff to gain the needed to knowledge to comprehend and comply with the wage and employee laws of several different states or countries. It makes sent to hire a consultant or sign-up with a payroll company to handle this change the right way.   

Summing Up Top Payroll Problems

Payroll is the lifeblood of the success of all companies. Team members perform work that generates income from which the company hopefully makes a profit. Without hard working the company does not exist. Companies should look at using the best payroll and time keeping technology available today so that payroll is paid accurately, and records are kept that make sure the company follows federal and state employment wage and hour laws. Employers need to employ strategies and policies that make sure they follow all state laws with respect to freelance and contract employees. Employers need to make sure they keep accurate time-off and sick leave records and pay employees for them accurately. Communicating all important changes to employees when they occur when it comes to payroll is critical. All employees need to be classified when it comes to their employment classification correctly, from gig workers to full-time employees. Payroll must be paid on time without fail and if it cannot be paid on time, this fact must be communicated to employees immediately.