When it comes to receiving their salary, no employee wants to take risks. A single day’s delay can negatively impact the relationship between an individual and their employer. Thus, it is vital for business owners to avoid any payroll-related errors, as a single mistake can adversely affect the organization. Small businesses are more prone to such errors since they lack staff and software. So, here are three payroll errors to avoid for smooth operations.
Incorrect employee classification
People added to an organization’s payroll do not necessarily all belong to the same criteria. There is a chance that some individuals are contractors and some salaried employees. Despite most organizations having primarily salaried employees, not categorizing and listing the types and classification can get tricky. These nuanced details can later lead to prolonged procedures and the possibility of legal issues. Thus, business owners should carefully review the laws and guidelines while filling out the payroll details. If uncertain, they must seek advice from experts and speak to an attorney if needed.
Not calculating overtime
This is not just about simply forgetting to calculate the overtime, which is also a fairly common error. If there are miscalculations in calculating overtime, it can take weeks or even months for the issue to be rectified. This mistake can be easy to make since each state in the country has different laws. However, companies should take the time to research laws and guidelines about overtime in the country and respective states. To make sure nothing falls through the cracks, speak to an attorney. Make sure the company HR has been trained and knows about the finer details about payment for overtime.
Releasing payments late
If the business has numerous states or has employees working across state lines, they might have to deal with multiple pay schedules. It can be a tricky situation. However, that does not exempt the company from following state laws and releasing checks based on the state laws. Where some states mandate that an employee be put on a monthly payroll, other states might demand a minimum of two paychecks be released each month. This problem can easily be addressed with the help of a reliable customizable payroll software.
