Best-In-Class Payroll Practices
Payroll isn’t just paying your employees for their hard hours worked; it’s much more than that. Payroll practices include hiring and firing, salaries, absence management, benefits, bonuses, and more. Along with all of these areas, payroll is also directly associated with Tax & Accounting, where a variety of laws come into play. Between regular tax law, overtime laws, and filing requirements, it can easily become a full-time job to ensure that your payroll is compliant.
With an HCM system, the full-time job of managing compliance and staying up-to-date with the ever-changing laws and regulations becomes obsolete. HR and Payroll software allows you to manage all aspects of your workforce, including payroll, by automatically abiding by laws and regulations, calculating overtime, and distinguishing between various job codes. Here are a few ways that a fully unified solution can keep your payroll compliant:
- Filling Out Appropriate Forms- On an employee’s first day, they will be given a pre-filled W-4 to complete which will include all of the information needed for tax purposes. This document can then be stored electronically and will flow seamlessly to all parts of the system.
- Benefits Elections- Using an online portal, employees can elect benefits, declare marital status, add or edit dependents, and view a summary of benefits including employee and employer costs. Once completed, this information can then be accessed in Employee Self-Service, Benefits Administration, Payroll, and more.
- Automatic Tax Updates- State, tax, and other legislative changes are automatically updated within the system to ensure that your employees are always compliant.
- Calculations- A unified HCM system will calculate payroll each time it is processed, seamlessly taking into account information from all parts of the system. If employees are working in multiple job codes, change positions, or qualify for overtime pay, their pay will automatically and accurately be calculated to the correct amount every time.
- Self-Service- If an employee happens to have a change in personal information, it no longer requires the HR department to make those changes. Instead, employees are encouraged to change their own information so that it is always up-to-date.
- Payroll Previews- With payroll previews, you are able view information and double check that all data is accurate before processing payroll. This increases efficiency and drastically reduces errors.
Wage and hour violations currently outpace all other forms of litigation. In fact, since 2007, the DOL has conducted over 150,000 wage and hour investigations that have resulted in findings of 110,000 violations. Another DOL study also found that that 10-30% of employers audited by states misclassified their employees. With so much revenue at stake, it comes as no surprise that authorities are beginning to crack down on non-compliant organizations.
Hefty financial penalties and harsh consequences are forcing employers to become informed about the infinite laws surrounding hour and labor wages. It’s time to take precautionary measures to ensure that your payroll is compliant.