What do you know about payroll fraud? Have you given it much consideration? Payroll fraud is a crime in which employees use the payroll system to steal money from a company, and it does happen. In fact, an article in Forbes reports that 27% of all businesses experience payroll fraud and that small businesses are nearly twice as likely to encounter fraud as larger businesses are. As these statistics show, this is obviously a problem that should not be ignored. (more…)
Every four years, the calendar offers up a dilemma to the world: How exactly will you spend that extra day in the wonderful blustery gray month of February? Well, actually leap year doesn’t really present too much of a problem. It’s pretty predictable – it comes every four years at the same time. So not a whole lot of preparation is required. But there are other calendar irregularities that can cause a bit more of a problem. (more…)
As a small business owner, you’ve probably heard that Indiana and other states are at will employment states. But do you really understand what that means you are allowed to do or not do when it comes to terminating employees? Even in this area of your payroll process, The Payroll Department can help with information you need.
Basically, at will employment means you can terminate an employee with or without cause, at any time, without adverse legal consequences. However, you cannot terminate an employee for illegal reasons. Additionally, you don’t have to provide advance notice of termination. For example, at-will employers can:
Promote and demote employees.
Make unannounced pay and benefits cuts. As long as the pay cut doesn’t take the employee’s wage below applicable federal or state minimum wage.
Reduce paid time off.
Change work schedules – limiting hours or requiring on-call work.
Set your own policies.
Alternatively, employees can leave a job at any time, with or without a reason, without legal recriminations, too.
However, there are state and federal exceptions to this law. You cannot terminate employment for any of the following reasons:
Discrimination or harassment based on race, gender, national origin, religion, age (40 and older) and disability. This discrimination may occur before, during or at the end of employee’s
Retaliation against employees who complain about discrimination or harassment toward themselves or others, or within the company, or who participate in an agency or court proceeding concerning discrimination or harassment.
Jury duty attendance.
Filing or threatening to file a worker’s compensation claim or claim for unpaid wages.
Refusing to perform an illegal act, such as refusing to drive a truck that exceeds legal weight limits, or reporting illegal activity.
Additionally, you cannot terminate an employee at will if:
The employee has an employment contract which states the employee is employed for a set time period, or outlines specific situations or employee actions that may lead to termination for cause. Reasons for-cause termination may include poor employee performance, employee misconduct or economic necessity.
The employee is covered by a collective bargaining agreement that specifies the employee can only be terminated for cause.
The employee gave up job protected status with their former employer to work for you.
As a small business owner, you’re probably more knowledgeable in the actual running of your company rather than every local, state and federal law concerning employment, payroll and taxes. Therefore, to avoid errors that can lead to substantial fines and penalties, consider hiring The Payroll Department. As an experienced payroll services provider, we can handle your payroll and payroll taxes for you, so you can get back to managing your business.
Do you own a service industry small business, such as a restaurant, hair salon or hotel? Then it’s important as an employer that you understand your payroll responsibilities when it comes to calculating wages, employee reporting and tax requirements. One factor that affects your business’s payroll tax obligations is when your employees receive gratuities for their services. Do you know the rules? (more…)
As an employer, whether you are a big or small business, you have the responsibility to hire employees who are authorized to work in the United States. One of the ways many employers ensure workers are legally able to work is by getting employees’ social security number. Easy, right? Well, not so much. Let me tell you a story from the offices of The Payroll Department. (more…)
Do you own a food and beverage establishment? Maybe you think you have a small business, but you might be surprised to learn it’s actually large when it comes to the Internal Revenue Service and how you annually report your receipts and tips. (more…)
When is 52 not the correct answer? That’s easy when you look at it from a payroll perspective …
Depending on the payroll schedule and the day of the week payroll is issued, you might actually have 53 payrolls in a year or 27 if you are on a bi-weekly payroll schedule. Because of that, there may need to be adjustments to the taxes being withheld. In addition, adjustment might be necessary to pretax deductions. (more…)
Have you ever had an employee ask you to pay their wages in cash – unreported? Or, maybe you’ve thought about hiring employees and paying them “under the table” to simplify your bookkeeping. What does it really mean to pay employees in cash? And more importantly, what are the consequences? (more…)
One of our new clients explained his reason for outsourcing his payroll during one of the initial meetings he had with me here at The Payroll Department. We often hear how small business owners are eager to have someone else take care of payroll, payroll taxes and the payment and reporting of it to the government. They want to be sure they don’t make a mistake and end up paying out fines and penalties for an oversight. However, when Sam* talked about the problems of handling payroll in-house with his small business, he made no mention of those issues.
He talked about whispers and personnel problems.
Whispers between co-workers may indicate an issue. Co-workers spend more time together on a daily and weekly basis than most families. Certain people become close and sometimes, cliques or unofficial groups are formed. When employees become close, they share confidences and confidential information.
Confidentiality inside organizations, especially small business operations, can be a real challenge. When personal issues become community knowledge employees can be embarrassed, ridiculed and judged. And those type of situations can have a direct impact on production – quality and quantity – and therefore, the bottom line.
Sometimes alliances are divisive and “sides” are taken. That’s when things tend to spiral downward and confidential matters become valuable collateral.
One of the most difficult areas to manage confidentiality is in payroll. It’s not just keeping pay rates confidential, but keeping personal matters such as garnishments for child support or other court ordered payments private.
It’s not uncommon to discover that private information is shared with the general office in the form of gossip, whether it is intended to be malicious or not, gossip always ends up hurting the organization.
Outsourcing your payroll is one easy and affordable way to manage the confidentiality of payroll. In fact, at The Payroll Department it is a policy to only discuss payroll matters with specified people within an organization. We respect the private matters of each individual on your payroll as well as the overall payroll and payroll tax matters of your business.
Sam saw his outsourcing payroll as being a proactive step to eliminate the potential of divided employees. He said there are enough issues with personalities without adding the potential for explosive situations around very personal matters in the workplace.
We like his thinking and I bet his employees would like it, too, if they realized he was working to protect them. But he keeps that confidential.
No, we’re not implying your business is haunted and you’re paying salaries to spirits that may be hanging about. But your business could possibly have ghost employees of a different sort that you may not even be aware of if you don’t diligently monitor your company’s payroll.
Last year, Iraq’s new government found out they had 50,000 ghost soldiers on their payroll. These were actual soldiers who paid their officers a portion of their salaries and then didn’t show up for duty. Not only did this practice make their commanders richer, but it also weakens the country’s military force, leading to the ISIS takeover of Mosul.
If you’re thinking, “Well, that was Iraq. Something like that doesn’t happen in businesses in the U.S.” Think again. Just this year, a man who worked at the Knox County, TN, Trustee’s Office was jailed for fraud after he collected roughly $200,000 – four years’ worth of paychecks that he didn’t actually work for and yet received.
Unfortunately, ghost employees can exist within your company:
A manager hires a nonexistent employee, then deposits the paychecks into a bank account he/she has set up.
A payroll clerk leaves a terminated employee on the payroll, then keeps the paychecks to cash for personal use.
An H.R. employee sets up personnel and payroll files using social security numbers of people who have died and collects the salaries.
A vice president hires a son who never or rarely shows up to work, but still pockets the paychecks.
However, you can safeguard your company against payroll fraud – saving your company thousands of dollars in damages. By hiring a payroll services provider, like The Payroll Department, to handle your payroll, we can provide your company with another check and balance to your payroll processing system. If an employee is stealing money through your payroll, it would become more difficult if The Payroll Department was monitoring your payroll.
In fact, The Payroll Department requires all the paperwork of your employees and makes all the deposits for your payroll. If more than one paycheck were deposited to the same checking account, The Payroll Department would catch it and make you aware of the potential problem. Also, The Payroll Department notes all the social security numbers of your employees when making tax payments, so they’re more likely to detect duplicate numbers.
If your business doesn’t have checks and balances in place for your payroll, you could be setting your company up to be the victim of fraud. But, by outsourcing your payroll services to a third party group, like The Payroll Department, you can eliminate the possibility of ghost employees haunting your payroll. Call us today for more information.
Basically, at will employment means you can 
