Common Mistakes Employers And Employees Make During Payday
Every business with employees should have an effective payroll management system in place. If payroll is managed well, it will ensure that employees are paid accurately and consistently, keeps the business away from legal and financial consequences, and maintains the overall reputation of the company.
Unfortunately, when companies do not hire a professional to manage their payroll or rely on automated software systems, the potential for error is high. When payroll mistakes crop up, it may delay salaries from being processed or lead to wage inaccuracies, which in turn may result in fines and penalties.
Since payroll errors impact not only the company but also their workforce, it is important for employees to pay special attention to these mistakes. To bring about awareness to employees and prevent costly consequences to the company, Adirondack Payroll Services has put together a list of the most common mistakes employers and employees make during payday.
1. Not setting up a reliable and consistent system for employees to report their hours
Employers do not always set up a reliable and consistent system for employees to report their hours. If this is the case, it makes it difficult for both the employer and employee. The employer may not calculate regular vs. OT hours correctly, which means they run the risk of paying their employees incorrectly. Employees will not necessarily know what is expected of them regarding not only reporting their hours, but also when they need to be turned in. As a result, it makes it more stressful for the employer when he/she is bumping up against a deadline to ensure timely payments to his/her employees. By having a system in place, it will alleviate a lot of the stress surrounding payroll and make the process so much easier.
2. Not checking payroll reports
Even if employers outsource payroll, it does not mean that they do not have an obligation to check if it was done correctly. We are all human, which means mistakes can happen. When the payroll reports are looked at before payday, mistakes can typically be corrected before an employee ever has a chance to know that there was one.
3. Not taking the time to look at paystubs
While it is an employer’s job to ensure that their employees are paid for the work they provide, it is still the employee’s job to make sure that he/she was not only paid correctly, but also that their check looks correct based on the deductions they have elected to have come out as well as the taxes they are supposed to be paying in. When employees do not look at their paychecks, they leave themselves open to being over/underpaid or not having enough tax money come out, which they will not realize until they go to file their taxes and are told they now owe money. Employees need to realize that they too have a responsibility and cannot blame their employer for what they did not take the time to do for themselves.
4. Forgetting that mistakes can be fixed
Everyone involved in the payroll process is human, which automatically means mistakes can occur. When they do, there is always a way to correct them. When all three parties of the payroll process, being the payroll provider, the employer and the employee, do their parts, not only do fewer mistakes occur, but when they do, they are able to be corrected much sooner than if someone is not playing their role in the process. Always remember, two sets of eyes are better than one, and three will always be better than two.
If you’re looking for a company to help you process your payroll without errors, reach out to Adirondack Payroll Services. As a leading payroll company in Pittsfield, MA, we can accommodate any pay cycle, federal, state, or local tax calculation, vendor, and agency payment.
We can customize our services to suit our clients’ needs and wants. From payroll processing, integrated timekeeping to tax filing, and other services, we can assist both employees and employers.