Responsibilities for payroll may cause some business owners a pain in the neck. Staffs that are always paid on time imply, in one way or another, the assurance that you were able to meet its legal standards. However, there are inevitable circumstances where managers or payroll in-charge commit mistakes on this matter. Thus, payroll mistakes can result to legal concerns like fines and penalties which can obviously be costly.
As I was browsing through the internet, I encountered an article that deals on preventable mistakes in payroll. If you are a business owner, you may not know it, but sometimes you are putting your company at risk for some reasons.
To conduct a quick safety check, there are actually at least ten common mistakes that can you can prevent. This list is as follows:
- Identify non-exempt employees correctly.
- Always follow the latest regulations and laws
- Do not incorrectly write Social Security numbers on W-2 forms
- Process correctly the wage garnishments
- Avoid too much reliance on payroll software
- Check time and attendance reporting
- Report properly the fringe benefits
- Not all employees are contract workers
- Handle withholding for employees who receive third-party sick pay properly
- Do not miss a deposit deadline
These things can be avoided if you always remind yourself to remember them at all times. Take for instance the first cases: misclassification of employees as non-exempt. Non-exempt employees who work more than 40 hours a week must receive an overtime payment. Failure to do so may subject the whole organization to significant penalties and lawsuits like wage and hour audits.
Generally, payroll is significant for the success of your business which can directly affect its financial point of view and the morale of your employees. Although this list of avoidable mistakes does not necessarily take into account your personal situation, may this help you at least dodge any major problem that may arise along the way, specifically lawsuits from your state labor office.