In our last post, we discussed some of the top tips to help employers prevent payroll issues and potential lawsuits. But in addition to implementing reliable workforce management systems, it's important to inform yourself as an employer of your legal payroll and employee classification obligations.
Here's part two of our guide that will explore some more tips to help employers prevent payroll issues.
Never Use Exempt Classifications to Prevent Overtime
Exempt employees are typically paid a set salary and do not have the opportunity to get extra compensation for overtime hours. While employing only these types of employees may seem like it makes payroll operations easier, but there are still some situations in which an employer is required to pay overtime wages to employees on set salaries. If you don't, you can get sued.
“The government says that exempt employee qualifications must be met in order for correct classifications to be made. For nonexempt employees, you must pay overtime wages when they work overtime hours,” writes Mike Kappel on Entrepreneur.
Don't Terminate Employees for Taking Leave
Finally, it's important to be understanding of life's various circumstances that may cause an employee to have to take leave. Even though the leave may be disruptive to everyday operations and cost you money in lost productivity, you're breaking an employment law by terminating the employee. While it's okay to terminate a worker who is consistently late or takes advantage of the vacation policy, terminating due to a legitimate leave of absence is unlawful and get can you involved in a wrongful termination lawsuit.
While these tips can help you avoid payroll issues, workforce management solutions are the best way to optimizing accounting operations. The Deloitte survey results suggest that the level of satisfaction with current payroll service outsourcing arrangements is quite high in North America at 67% very satisfied, and workforce management systems are designed with efficiency in mind. For more information about how to get started with a workforce management system, contact Paymedia.