Payroll Checkup

“One of my employees asked me about her overtime pay. When looking at our timekeeping system, I was shocked to realize the overtime isn’t being calculated correctly.”

Your HR Survival Tip

Even when things are going well, we have all experienced that occasional computer glitch. Since we know they happen, why do we still expect our systems to always work perfectly? Most companies are using online payroll processing but you can’t just assume there will never be a problem.

Payroll needs a checkup at least twice each year to review:

  • Your company information — Look at a wage statement (pay stub) to confirm your full legal name and full street address are still correct. We aren’t expecting pieces of information to be dropped from something that’s been the same for years but it does happen.
  • Timekeeping system — If you are using an app or the payroll company’s timekeeping, review the calculations it’s providing. Is overtime calculating the daily hours, then the weekly hours? Remember the payroll processing companies are nationwide so they might not have set you up properly for California since we’re the only state with the 8-hour days before paying overtime. Also, make sure your employees are actually clocking out/in for meal breaks.
  • Paid time off — California has at least 29 localities with different minimum wages and paid sick leave plans. Is each employee’s sick leave being calculated properly? When using vacation or sick leave, is it being properly reflected in the balances on their wage statements?
  • Employee information — When was the last time you checked that your employees’ addresses are still correct? When using direct deposit, employees often forget to notify us of address changes and we don’t find out they are incorrect until the W2s are mailed.
  • Benefit deductions — Are your deductions appropriately set up as pre-tax or after-tax? Has the amount of the deduction changed based on age-banded rate changes, renewals, etc.?

California is very protective of an employee’s earnings, as we know, or have learned the hard way. Save time and avoid those future headaches by developing a checklist and scheduling a regular checkup of your payroll.

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