Action Items for Every Payroll Department
First of all, you should make sure you read the Universal
Laws of Payroll. They present the basic concepts that rule
the lives of payroll folk. These are some specific tips, assumptions
and action items to help deal with those problems. Note that one of
the Universal Laws is that there is ALWAYS an exception.
General Action Items
1. Train your executives and middle managers.
In most cases, THEY'RE the ones making the mistakes.
2. Invest in a Big Book of Payroll and a
subscription to a payroll newsletter.
Check out other resources you should have.
3. Many of the rules involve the Accounts Payable
department. Sit down with them and make sure they know that there
are specific rules that YOU know about. Get involved in the
transactions so that you can make sure your company is doing it right.
Contractors
1. Classify them right.
2. Have complete documentation for
every contractor.
3. Meet IRS safe harbor rules.
4. Treat your contractors just like other vendors.
Overtime
1. Know the laws, particularly for your state.
2. Do regular rate of pay properly.
3. Make sure your exempt employees really are
exempt and fix any problems.
4. Don't dock your exempt employees.
5. Make sure you and managers know what is working
time.
6. You have to pay for unauthorized overtime.
Change your policy to say it isn't allowed. But you have to pay for
it when it happens.
Record-keeping
1. Always document so that an auditor, three years from now, can
figure it out with no further explanation from you.
2. Take care of the molehills - the mountains will
take care of themselves.
3. Never change time sheets or time cards a without
detailed explanation for the auditor, and a sign-off by the
employee.
4. Restrict access to any employee record to only
two people, the primary inquirer and a backup.
5. Give the auditor an office and
point her at the files. That
should be all you need to do.
Fringe Benefit Taxation
1. Check the taxability of ANYTHING you give to
employees. Begin taxing or change method of giving so it remains
non-taxable.
2. Budget for gross-ups or make sure employees know
about the taxes that will be withheld..
3. Beware of giving a W-2 and a 1099-Misc to an
employee in the same year. This ties back to contractor issues as
well.
Garnishments
1. Read the instructions.
2. Everything should be in writing. If you get
instructions from anyone, it should be in writing.
3. Be proactive in your communications.
W-2's and W-4's
1. Anytime an employee wants to change their
withholding, you must have a properly completed W-4.
2. Send copies to the IRS when you get a W-4
claiming more than 10 or exempt with earnings of more than $200 per week.
2. Consider charging a substantial fee for reissued
W-2's to encourage employees to be more careful with them.
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