30 Jan Do You Want Payroll Perfection?
Making payroll mistakes can lead to employees reporting your company to the Department of Labor. You may face lawsuits, fines, steep legal fees, negative press, and the personal toll of stress.
Worried About Wages?
Experts are now concerned about a threatening increase in claims regarding wages and hours under the Fair Labor Standards Act (FLSA) and lawsuits resulting from payroll mistakes. According to the IRS, 33% of employers make payroll errors costing billions of dollars annually. Why worry?
- Strain on Human Resources: Many employees including, human resource professionals, have been dealing with limited staff, ever-changing laws, and an increase in resignations. In addition, they are working to retain employees while meeting their demands for work-life balance, better benefits, and improved corporate culture.
- Changes in Wages:
Wage Increases: Due to the “Great Reshuffling,” we see an increase in hiring bonuses, stay bonuses, and salary boosts making it even more imperative to have the right payroll partner.
Minimum Wage: 25 states increased their 2022 minimum wage. With the move to working from home, some employees have moved across state lines. You need to ensure you pay employees the correct minimum wage. In addition, you’ll have to pay different state taxes.
- Remote Work: The change from office to remote work makes it harder to observe when someone is working. Many employees shifted their work schedules to accommodate the demands of their home life or because they moved to a different time zone. These changes may contribute to poor or difficult tracking.
- Great Migration: Employees are not in your offices. They may not even be in the same state anymore. In mid-2020, about a fifth of U.S. adults moved due to COVID-19 or knew someone who did. As the pandemic continues and ideology about work-life balance changes, people continue to move. For example, Vermont saw a 74% inbound move rate in 2021. You are required to pay the correct state taxes on behalf of the employee.
Don’t Make These Mistakes
Watch out for these payroll mistakes.
- Not issuing W-2s and 1099s
- Failing to report new employees: We verify employees’ identity and legal work status, have proper tax filing info, and follow new hire reporting laws.
- Miscalculating overtime pay
- Not paying payroll tax properly
- Paying the wrong tax rates
- Missing payroll tax deadlines
- Running payroll late
- Misclassification of employees
- Not maintaining payroll confidentiality
- Not properly saving payroll records and backup
Relieve the Pain of Payroll
Simple, inadvertent payroll mistakes can damage your business. I read about a company that made a $600 payroll mistake (unpaid overtime) that cost them almost $45,000. They had to pay the employee and expensive legal fees.
With Soteria payroll support, we help you avoid the damages and headache of payroll of mistakes. Keep your business strong and safe in 2022. Reach out to SoteriaHR.