Is it easier to collect over-payments with help from custom payroll services?
Your custom payroll services can make it easy to collect over-payments, whether employees want to do the right thing or not. Automation goes a long way in helping a worker give back what they owe. Depending on the way your staff is paid, your business may be at particular risk for overdoing it. The good news is you can customize your self-service payroll system to help minimize these losses.
Here are three ways your self-service payroll system can help you successfully collect what you’re owed:
1. Create Quick and Easy Repayment Plans
Fewer than 2 percent of payroll transactions result in the wrong amounts being paid. Of those, only 17 percent involve employees getting more than they’re due. However, when it happens, the effects can be significant in many areas of your business. It’s not just your budget that’s off. Salary disparities can dramatically impact your workforce.
Instead of calling someone into your office to let them know they received too much money, a self-service payroll system can send them an alert. When accompanied by information on repayment plans, including an agreement for the employee to sign, you can solve the problem without creating more of them. The overwhelming majority of employees will respond by filling out the agreement, returning it and beginning their repayment plan without having to involve upper management or HR.
You want to avoid turning the situation into something upsetting, because surprisingly, when legal push comes to shove, employees rarely have to return over-payments. Fighting a payback is not grounds for firing either, and engaging in battles over the issue could lead to lawsuits based on harassment. Further, if handled inappropriately in the accounting department, you could wind up being fined for any number of violations.
2. Avoid Violations While Being Repaid
It may be that a commissioned sale was overturned down the line or a human error gave a bonus to the wrong person. The company can request over-payments be returned, but the way requests are made and how those repayments are accepted can mean the difference between balancing your budget and being buried in federal and state fines. Use custom payroll services to establish an effective (and legal) repayment method to help the process go smoothly.
For instance, you can give your employees the freedom to select a percentage to take out of their future checks to take care of the debt. It can be quickly accomplished with minimal staff involvement, but you’ll have issues if they choose to give you too much. Employees, even those with payroll arrears, still need to be paid minimum wage. They have to be fairly compensated for overtime as well. This is where custom payroll services can keep you protected and your employees paid what they are due.
3. Safely Reclaim Overpaid Taxes
In addition to getting an overpayment back from an employee, you also have to reclaim overpaid taxes to the government. This can be tricky because payroll tax discrepancies can trigger an audit, costing you time and money without reason. Custom payroll services armed with the appropriate IRS forms (W-2c, 941c and 843) make this easy. First though, the employee must fill out paperwork stating the business has the sole right to reclaim the tax.
Businesses want to keep their workforce happy, so navigating awkward situations like overpayments must be done with care. An automated system can help remove emotion from a situation and keep everyone focused on finding a good solution. Arming your self-service payroll portal with these tools can help you maintain positive employee relations and a healthy bottom line.
Call 770-962-1700 to discuss customized payroll services for handling paybacks and other sensitive situations.