Staying on the Right Track
Payroll management professionals know that they have a vast number of regulations to abide by, deadlines to keep, and a myriad of forms to be completed and maintained. Compliance and diligent attention to detail are hallmarks of your profession.
And mistakes can be costly.
But the reality is that the most common mistakes are not usually made with complex regulations around employee classification, wage garnishments perhaps, or even the ever-changing requirements of employee health-care. In fact, the most common errors in payroll management practices often occur with relatively simple and even obvious tasks.
Are You Making These Payroll Management Mistakes?
Take a moment and review these common occurrences and ask yourself if you really have these covered. The truth is that even the most accomplished and efficient payroll professional can be caught off guard by the most familiar practices.
The top three common payroll management mistakes:
1. Form W-2 Errors
This is the most common tax form that employers must file. As a result, it is also the form that sees the most frequent errors. There are a number of specific guidelines when issuing W-2s:
- W-2 forms need to be issued no later than January 31
- All of the demographic information on the form must be accurate and complete
- Certain deductions have to be listed on the W-2 and in specific boxes
- Names and Social Security numbers must match
In addition, you must furnish copies B, C, and 2 of Form W-2 to every employee by January 31. The must list their total wages and deductions for the prior year. In order to properly meet the "furnish" requirement, the form must be properly addressed and mailed on or before the due date.
You are also required to file Forms W-2 and W-3 with the Social Security Administration (SSA) by February 28 or 29, or - if filing electronically - file by March 31 of the following year. The filing deadlines for state and local government agencies vary, of course, and this may depend upon whether you are filing electronically or with paper.
For more information on SSNVS, visit the SSA website at http://www.ssa.gov/employer/ssnv.htm.
2. Not Displaying Wage Posters
Wage Posters may seem "old-school" and outdated, but they are absolutely required. And they are not just for factories, or enterprise level businesses.
The federal government requires that you display the poster publicizing the federal minimum wage and overtime pay standards in a prominent and conspicuous place. It must be located where employees can see it as they arrive and leave their place of work.
Wondering how serious the government is about this relatively simple stipulation? A business that fails to properly post and display the posters is breaking a federal law. If convicted, the penalty for any person willfully violating any provisions of the FLSA, including the posters, can be a fine of "not more than $10,000 or imprisonment for not more than six months, or both."
Simple, yes. Overlooked or ignored? Unfortunately, that is also the case. Make sure you are in compliance with this regulation. For more information, you can visit www.dol.gov.
3. Not Being Informed
Whether you do your payroll by yourself, have an employee or a staff manage the process, or even outsource to a firm or payroll management services provider, you are still ultimately responsible. Compliance, record keeping, and making sure that filing and paying payroll taxes correctly and on time requires a vast amount of time and resources. Not to mention the ongoing need to stay abreast of changes in rules and legislation.
You do not have the leisure to say "I didn't know." The government does not take into account any lack of knowledge or claims of ignorance as an exemption of liability. Not being informed is not only one of the most common payroll management mistakes, it is one that must be diligently avoided because the need to stay informed never ends.
Don't be that person!
Accurate and timely management and compliance practices are required for every business and every payroll professional. But there are options. Accuchex, a reputable payroll management services provider, can not only relieve you of the burden of your ongoing payroll process demands, but can potentially prove to be a more cost-effective solution, as well.