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How to Solve the Biggest Problems with Payroll

If you have employees, payroll is part of your everyday life as a business owner. Managing payroll can be a big job, especially when you have many other tasks to handle. As a result, many business owners find themselves dealing with payroll problems. Below are some of the most common payroll problems business owners experience, along with tips for solving them.

  1. Misclassifying workers.
    If your company works with both independent contractors and employees, it is important that you classify them correctly. Independent contractors and employees are not treated the same for payroll purposes. For example, while you must pay payroll taxes for employees, you are not required to pay these taxes for independent contractors.

    Failing to classify employees and independent contractors properly can lead to fines and other problems. For this reason, it is important to understand the rules and apply them carefully in every case.
  2. Keeping track of hours worked.
    Labor laws require you to pay employees at least a minimum amount of money for every hour they work. You are also required to pay at least 1.5 times the employee’s normal wage for any overtime hours worked. In order to comply with these laws, you must keep careful track of all of the hours each employee works. This can become challenging, especially if you are still trying to use paper time cards or another outdated system.

    To deal with this payroll problem, develop a reliable system for tracking time and make sure all of your employees understand how to use it. For example, you can track time easily using a mobile time tracking application.
  3. Slow processing times.
    Employees rely on you to provide them with payment in a timely manner. In most cases, they will expect to receive their paychecks on a certain day each week, every other week or every month. Unfortunately, because payroll is so complicated, it is easy for businesses to fall behind in processing. If you are late issuing paychecks, employees will be unhappy. In some cases, you may even face legal trouble because of slow payroll processing.

    Stay on top of payroll by creating a streamlined process for tracking hours, paying taxes and preparing checks. If you don’t have the resources to handle this task in house, consider outsourcing payroll to a third-party provider.
  4. Wage garnishments and child support.
    If your employees are responsible for making child support payments, or if your employees are subject to wage garnishment for unpaid debts, your company is responsible for complying with these orders. Unfortunately, this complicates payroll processing considerably. To prevent legal problems, you need to make sure you are withholding and submitting the proper payments to the appropriate recipients.

We encourage you to contact us with any questions.

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