{"id":2268,"date":"2023-01-24T17:01:22","date_gmt":"2023-01-24T17:01:22","guid":{"rendered":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/?p=2268"},"modified":"2023-01-24T17:01:23","modified_gmt":"2023-01-24T17:01:23","slug":"combating-the-high-incident-of-payroll-errors","status":"publish","type":"post","link":"https:\/\/www.amalgamatedbenefits.com\/amalgamated-employee-benefits-administrators\/combating-the-high-incident-of-payroll-errors\/","title":{"rendered":"Combating the High Incident of Payroll Errors"},"content":{"rendered":"
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Managing and administering payroll is a complex process that requires accuracy, thoroughness and an understanding of regulations governing payroll processes. According to Deloitte\u2019s recent Global Payroll Benchmarking Survey, topping the list for areas requiring improvement in payroll processes are compliance (81%) and accuracy (70%). Beyond these problem areas, the Department of Labor (DOL) reports that the number one reason why multi-employer plans fail a DOL investigation is that they simply do not conduct routine payroll audits.<\/p>\n

To combat these problems and better ensure high quality payroll processes, regular payroll audits are essential. It is important to note, that not all payroll audits are alike. In fact, there are many variations in how payroll audits are performed. In addition to payroll audits conducted by internal staff, audits may be completed by a third-party. The latter is actually preferable, at least periodically, as a check and balance procedure where complex payrolls exist such as with multi-employer plans. Regardless of who performs the payroll audit, there are essential components that should be included.<\/p>\n

Components of a Payroll Audit<\/h2>\n

All payroll audits must be conducted on a \u201cregular\u201d schedule depending on how complex an organization\u2019s payroll is (e.g., based on types of employees \u2013 full and\/or part time, independent contractors, union or non-union, etc.). Every payroll auditor must carefully review each employee\u2019s name, title, start date and salary\/pay rate. The latter, in particular, should be carefully examined as changes in an individual\u2019s role may also have an effect on his\/her pay rate. Other variables include number of days and\/or hours worked depending on the individual\u2019s position. There should be consistency between an organization\u2019s list of employees on payroll and their employment records. Also to be considered is pay and variable pay (i.e., commissions, bonuses, overtime, profit sharing, etc.) and whether or not an employee or employees have been given raises or if there has been a change in the way they are being paid.  For instance, if an employee has transitioned from hourly wage status to a salaried position resulting from a promotion. Tax withholdings and deductions must also be a focus during the payroll audit to ensure the correct amount of federal, state and local tax is being withheld, along with the proper Social Security deduction.<\/p>\n

The Hallmarks of the Best Quality Payroll Audits<\/h2>\n

Given the many variables involved, it is easy to understand why errors can be made by payroll professionals conducting audits. There are, however, some payroll professionals who go above and beyond when handling payroll audits. For example, when conducting a payroll audit for a multi-employer plan, the best third-party administrators of payroll auditing services follow these strict procedures:<\/p>\n