Don’t let these 5 common payroll mistakes take your pot of gold!
1. Misclassification: Employee vs. Independent Contractor
Perhaps the most common audit issue today is misclassifying workers. There’s incentive to treat workers as independent contractors rather than employees because payroll taxes and employee benefit costs are high.
You don’t have the freedom to select the label for the worker; classification depends on whether you have sufficient control over the worker. This essentially means having the right to say when, where, and how the work gets done.
Find information about worker classification from the IRS. When in doubt, consult your tax advisor.
2. “All our employees are exempt, we pay them a salary”.
Paying someone a weekly salary does not make that employee exempt.
Remember-job titles alone do not determine the exempt or non-exempt status of any employee. Exemptions are determined for each specific employment situation based on the specific job duties performed and compensation received.
3. Allowing employees to work off the clock.
The U.S. Department of Labor and the courts do not recognize the concept of voluntary overtime without proper overtime pay. Agreements by employees to give up their rights to minimum wage and overtime pay are void and unenforceable.
Employees generally may not volunteer to perform work without the employer having to count the time as hours worked. Examples include:
- Rework: When an employee must correct mistakes in his or her work, the time must be treated as hours worked, even when the employee voluntarily does the rework.
- Waiting for Work: Time, which an employee is required to be at work or allowed to work for his or her employer, is hours worked. Is the employee “engaged to wait” or “waiting to be engaged?”
- Place of Work: Hours worked include all the time during which an employee is required or allowed to perform work for an employer, regardless of where the work is done, whether on the employer's site, at home or at some other location.
- Working during Lunch: Lunch breaks aren’t breaks if your employees work during the break.
4. Deducting money from pay without written authorization.
Other than court-ordered garnishments and deductions that are either required or specifically authorized under laws or regulations, all wage deductions should be authorized by the employee
5. Loaning money, advancing wages, or paying wages without maintaining clear, written documentation of the transaction.
Banks do not loan or advance money without a signed, written agreement for repayment and neither should an employer. If loans or wage advances are to be repaid via wage deductions, obtain written authorization for the deductions, specifying amounts and intervals, and do not forget to provide for deduction of any remaining balance at the time of a work separation. Never pay wages in cash without getting a signed, written receipt from the employee.
The buzz about onboarding seems to have slowed down a bit. Perhaps it’s because HR professionals are getting tired of reading about it; perhaps it’s because there are other things that are catching our interests; or perhaps it’s because we are all already executing highly successful onboarding programs.
I don’t think it’s the latter.
Modern Survey recently identified that 92% of HR professionals think that onboarding is important to their company’s success, but only 55% of them think they are doing it well.
It’s time to take onboarding off the shelf, dust it off, and give it another look. The Bureau of Labor Statistics reported that the unemployment rate for September 2015 is 5.1%, which is the lowest it’s been since May 2008. The Department of Labor reports that 1 in every 4 employees leaves their position in the first year. CBS News reports that the cost an organization incurs when an employee leaves is somewhere between 20-213% of that employee’s salary. With numbers like this, companies can’t afford to lose high potential employees.
To see how a strong onboarding program can aid your company’s retention efforts, let’s look at what employees want. According to SHRM’s 2015 Employee Job Satisfaction and Engagement Report, 72% feel that “respectful treatment of all employees at all levels” is very important, and 64% feel that “trust between employees and senior management” is very important. So to keep employees sticking around, companies need to ensure they do these two things well.
Onboarding, which we will define as the employee’s first 90 days at a new company (although it could be longer), helps retention because it: • Acclimates the employee to the new organization, making them feel valued and respected. • Introduces the employee to key peers and stakeholders, sparking friendships with colleagues. • Trains the employee how to successfully complete job duties, establishing expectations at the onset and therefore building trust.
To do onboarding well, it needs to be well organized, reliable, and customized for each individual.
Organized – A company’s onboarding program should follow a plan, or guideline. For example, a plan could include having a supervisor sit down with a new employee to establish three 90-day goals. HR can create forms, timelines, and checkpoints for supervisors.
Reliable – Sometimes – especially with new initiatives – supervisors begin with the best intentions, but fail to follow through for various reasons. In order to build trust, the company (and supervisor) must do what it says it is going to do. So in that 90-day plan, it’s important for the supervisor to have periodic check-ins with the employee.
Customized – Not all companies are created equal, and neither are all employees. Some employees may want to write their own 90-day goals and present them to the supervisor to discuss; others may want to sit down with the supervisor and create them together; while still others might prefer the supervisor just present them with goals to achieve. If your company conducts behavioral assessments as part of the selection process, they can be used again here. If not, the company should be open to flexibility within the plan so that each new employee gets the most out of his or her onboarding experience.
To learn more about creating a powerful onboarding program and other HR hot topics, visit HR Tampa’s Expo on October 21, 2015. Go to www.hrtampa.org to register.
Jennifer Currence, MBA, SPHR, SHRM-SCP, is president of OnCore Management Solutions. She is an HR consultant, corporate trainer, and business coach based in Tampa, Florida.
Organizations face many challenges when it comes to effectively and efficiently operating their business including mitigating potential costly risks. One risk that resides at the top of the list, is claims of illegal termination due to undocumented performance-based terminations. This risk is increased if the terminations are the result of a reduction in the workforce as the result can inadvertently create a disparate impact on a protected class of individuals.
It is important to remember that employees terminated for poor performance without the presence of documented discussions regarding their performance issues are liable to seek legal advice. There are many law firms that are ready and willing to represent employees under these circumstances as they know it will be a challenge for the employer to defend a claim of illegal termination due to their lack of appropriate documentation of the poor performance. The common outcome of this circumstance is an out of court settlement of an average of $40,000.00. If the claim ends up in a lawsuit being filed, it can cost the employer a much higher amount.
In addition to the potential monetary costs, there are other risks including the negative impact on employee morale and irreparable damage to the organization’s reputation. Anytime an organization terminates an employee it has an impact on the remaining workforce. This is especially true in small organizations where employees feel that they are part of a family. They have an expectation that they will be treated fairly. This includes an opportunity to correct deficiencies prior to losing their job. When terminations are conducted without evidence that the employee was informed of the performance issue it can result in the remaining employees losing trust in their supervisor, as well as the organization.
The good news is, reducing the risk is possible by implementing a policy that requires supervisors to address performance issues early and often providing the employees with the opportunity to improve. This practice will demonstrate the employer took reasonable efforts to help the employee improve and provide the organization with documentation to substantiate their termination actions.
In today's competitive business environment, your employees represent one of your organization's most valuable assets. Which means your company's productivity—and ultimately, its profitability—depend on making sure every person in your organization is working up to his or her full potential.
Do you conduct regular performance reviews with your employees? Do you monitor and discuss poor performance with your employees? If you have any questions about performance reviews, or need help getting started don’t hesitate to reach out to our HR professionals. We can help!
Small businesses should never have to settle for anything but the best when it comes to recruiting new hires. But competition can be tough and on top of that; it’s not always easy to know exactly where to find the best talent. Here are some sites that can help you navigate the recruiting landscape and come out on top.
LinkedIn LinkedIn is quickly becoming one of the top hiring sites. It connects over 330 million professionals and allows you to easily search through jobs, post jobs and check out the backgrounds of prospective hires.
Simply Hired Simply Hired is one of the world’s largest search engines for jobs and is a great place for employers to post openings and conduct performance based advertising for open positions. Businesses can reach millions of job seekers on the web as well as social media networks.
Glassdoor Glassdoor is a trusted site for companies seeking talented new employees. Job seekers can see if they have any Inside Connections at your company and also read reviews about your company, see office photos, etc. You can check out the profiles of job seekers and access public information about their employment history.
CareerBuilder CareerBuilder is one of the top recruiting boards. It allows users to post their resumes for employers to view and also to access job listings and search through jobs relevant to their background.
When you need additional help to ensure you are recruiting the best prospects, give a quick call to your HR Advisor! Our team of licensed experts each have a minimum of ten years HR experience. Need help? Contact us!
If you’re an HR Manager you’ve got a lot of things to oversee… compliance…benefits…employee management…training…perhaps even payroll. But nothing seems to set you back like an inbox overload! Sending and receiving emails can take up the better half of your day when you’ve got lots of employees and vendors to interact with.
The following 6 tips are brought to you on behalf of HR Shield! We’ve talked to countless office professionals and these simple steps can help make you work much more effectively and efficiently!
- Create Templated Replies: If you find yourself answering the same questions all of the time – such as “how do I update my timesheet” or “where can I find a copy of our employee handbook” or “how do I fill out Form W-4 or Form I-9,” start saving your replies! Cutting and pasting is A LOT easier than rewriting a step-by-step response each and every time someone emails you. Even if you need to edit a portion of the reply to better adhere to the person’s question, you’ll still save yourself a significant amount of time.
- Turn Off Video and Audio Alerts: Many of us start to feel overwhelmed when we’re trying to do too many things at once. You’re right in the middle of onboarding a new employee, and the phone won’t stop ringing and the emails won’t stop coming in. Force yourself into turning off the notifications and checking your inbox only at set times throughout the day. If you’re in the middle of something, the emails can likely wait. This will allow you to focus entirely on what you’re working on. And when it’s time to work through those unread items, you’ll be more relaxed with nothing else going on.
- DELETE: Remember that email conversation that went back and forth 45 times yesterday? If it was casual conversation or something that absolutely will not be needed at a later date, delete it! This will make searching for items in the future much easier.
- Make The Shift Toward Messenger: There are many messenger systems (Skype is one) that can easily be installed in the workplace and permit coworkers to communicate via conversation windows on their desktop. Messenger is perfect for asking your coworkers, boss, or HR manager quick and easy 1-line questions or comments. It’s also easier than walking down the hall into another department! This can prevent you from having an inbox full of quick 1-lined emails going back and forth.
- Use "Rules:" Many email programs permit you to establish "rules" to automatically filter messages. If there are a handful of people in your work life that are high volume senders you can have their emails forward into their own designated folder, rather than flooding your inbox.
- Get Rid of Junk Mail: Maybe it’s not considered junk to you, but daily horoscopes, news updates, social media happenings and more should go to your personal address – not your work address. On a slow day you’ll thoroughly enjoy them. But on busy days they’ll become your worst enemy; you’ll wonder why you ever subscribed to them in the first place! If you’re receiving unsolicited emails you don’t want to be receiving anywhere, be sure to update your spam settings and opt-out of all emails you do not wish to receive.
For best practices and various HR tips, follow our blog each week! If you have any questions, simply contact your HR Advisor at HR Shield: (877) 636-9525.