{"id":12164,"date":"2019-02-20T14:52:26","date_gmt":"2019-02-20T09:22:26","guid":{"rendered":"https:\/\/www.allsectech.com\/?p=2781"},"modified":"2024-09-02T10:38:39","modified_gmt":"2024-09-02T10:38:39","slug":"the-real-cost-of-payroll-mistakes","status":"publish","type":"post","link":"https:\/\/www.alldigitech.com\/2019\/02\/20\/the-real-cost-of-payroll-mistakes\/","title":{"rendered":"The Real Cost of Payroll Mistakes"},"content":{"rendered":"
Payroll mistakes cost employers billions of dollars annually. According to the IRS, 33% of businesses deal with payroll errors. There are many cautionary tales<\/a> about the larger impacts of even minor slips in payroll.<\/span><\/p>\n For instance, a Texas company failed to pay employee overtime of $608.05. A small mistake when caught in time. But, they paid a hefty price. Ultimately, the company ended up paying $42,459 including penalties, over a lawsuit.<\/span><\/p>\n Payroll errors tend to leave a trail behind them. The consequence is that you spend valuable labour hours not only correcting these faults but also rebuilding and recompensing your secondary losses from these operational lapses.<\/span><\/p>\n Payroll mistakes thus have secondary costs. They have an impact on people and the employer\u2019s brand.<\/span><\/p>\n Payroll is an important touch point between an employer and employee. Delayed or short payments not only affect employee productivity, they also tarnish employee morale and have a negative impact on the work culture. Some employees may even leave the organization. This means added costs towards recruitment and training of fresh talent.<\/span><\/p>\n Mistakes such as defaulted tax payments due to misclassification of employees, result in hefty penalties for non-compliance. Dodging these regulatory bullets is no mean task as there are inherent complexities in processing payroll for divergent employee groups and contracts.<\/span><\/p>\n Payroll requirements are different for employees and independent contractors. Employers are liable towards payment of benefits, overtime, and taxes for employees, whereas they are not required to do so for contract workers. It is therefore important that businesses carefully update and maintain employee records so as to avoid these payroll pitfalls.<\/span><\/p>\n Varying jurisdictional laws add to the complexity of processing payroll for a large organization. Minimum wage limits, for example, differ across states and are also constantly updated. If payroll teams are not on top of these regulatory updates, the organization is prone to vulnerabilities.<\/span><\/p>\nCommon mistakes and their secondary costs<\/span><\/h2>\n
The smart solution<\/span><\/h2>\n