We get it, the holiday season is here and you are excited for a well deserved break- but hold on! This is also the busiest time for payroll teams. With banks being closed during public holidays, this means payments need to be issued earlier to ensure employees are paid on time. This requires more time and preparation, and with Christmas and the New Year approaching right around the corner, employees are taking time off which can make it challenging to get the necessary payroll information from them. In a nutshell, payroll during this time of the year can be hectic! The last thing you want is to have to deal with delays or staff being underpaid as a result of payroll errors, resulting in unhappy employees. Fortunately, there are ways to alleviate some of this pressure.
Ensure a smooth payroll run over the holiday season by avoiding these common mistakes, so that your payroll run doesn’t turn into a nightmare.
Putting off annual leave to the last minute
Ensure your employee’s annual leave balance is correct and that they have enough hours to cover for the time off they have asked for. Stay up to date and organise your payroll early to prevent headaches during the holidays.
Using outdated systems
A lot of the time, underpayment issues come from businesses that are still using outdated payroll systems which rely on manual, repetitive admin task. Using outdated payroll systems can lead to issues being overlooked such as failure to note overtime, leave, the age of the employee – which can lead to overlooking their entitlements, which can then lead to breaches of employer obligations. Therefore, having an updated system that can automate these processes and update when necessary can help prevent payroll issues while boosting efficiency. Today, many businesses are transitioning to digital timesheets to better manage their payroll quicker than ever.
Lack of understanding- employees' entitlements
Knowing your employees rights is crucial. With young workers and low income workers experiencing the highest rates of underpayment, encouraging them to learn and familiarise themselves with the law and their rights is beneficial for them as well as you, as an employer or business owner in case if a payroll error were to occur and they are unable to identify it.
Not tracking overtime
Overtime payment errors can occur when the employer misses a payment when employees spend time travelling between sites, work during break times, or when they are required to participate in activities outside of work hours. This may include team building days, training, office parties.
Misclassification of employees' title
Employers should analyse their employee’s role, qualifications, experience and training. Mistakes can arise when employers fail to recognise these points or when an employee changes position. For example, treating a permanent part time employee as a casual worker and therefore not granting them their entitlements as a part time worker such as paid leave. To avoid this, employers should discuss with their employee their title and responsibilities at the point of hire or when moved to a new position.
Interns and work experience
Vocational placements are periods of work experience required to be completed as part of an individual’s training course or education. Students completing placements are not considered employees.
As long as the individual is not in an employment relationship, then unpaid work experience or unpaid internships that are not vocational placements are fine.
So, what counts as an employment relationship?
Some things to consider:
- Purpose of the placement– If the purpose is to gain work experience, rather than to help the business’ operations, it is less likely to be an employer relationship.
- Duration of the placement– The longer they stay to work, the more likely it is an employment relationship
- Type of work– The individual may be involved in tasks and training to build their skills. However, if the business expects them to come to work and do productive tasks that benefit the business, it is more likely to be an employment relationship.
Correcting errors in payroll can be a tedious and frustrating task that can take days to investigate. Some of the most common scenarios include:
- Underpaying or overpaying an employee
- Deducting the wrong amount of benefits
- Missing the first paycheck
The TOKN Solution
The TOKN team created Timesheet+ to help businesses speed up tedious tasks by automating workflows. Create, submit and approve timesheets effortlessly, at your fingertips. Ensure your business is compliant and that all timesheets are stored securely in one platform. Improve data quality and say goodbye to inaccurate data, human errors and delays. No more headaches!
Update any information easily and eliminate paper based processes. Timesheet+ helps improve productivity and efficacy by automating manual tasks and data capture, offering complete visibility of all timesheets instantly. Manage overtime with TOKN’s Overtime reports, Timesheet analysis and more! Display a report or alert to see how many hours your staff are working to ensure they are working safe hours.
TOKN offers offline capabilities and helps drive workflow automation with effortless time capture, approvals and seamless integration.
Payroll doesn’t have to be a scary or tedious task. Timesheet+ does the work for you, enabling instant visibility of all timesheets. Manage timesheets quickly and efficiently.
The underpayment of staff as a result of payroll errors is not uncommon. Having a robust payroll system can help with record-keeping, accuracy and automation to prevent these errors from occurring. Avoid the common payroll mistakes and identify and resolve any issues quicker so that you can be headache-free this holiday season. Ensure compliance and boost efficiency with TOKN’s Timesheet+.
$5 billion in superannuation stolen from workers. (2021). Retrieved from the Australian Council of Trade Unions Web Site https://beta.actu.org.au/media-release/5-billion-in-superannuation-stolen-from-workers/
Lian, J. (2019). PwC estimates $1.35 bn in wage underpayments annually. Retrieved from https://www.accountantsdaily.com.au/business/13764-pwc-estimates-1-35bn-in-wage-underpayments-annually
Prevent employee underpayment – avoid 5 common mistakes. (2022). Retrieved from https://batchmewing.com.au/avoid-underpayment-mistakes/
Student placements. (2023). Retrieved from Fair Work Ombudsman https://www.fairwork.gov.au/tools-and-resources/fact-sheets/unpaid-work/student-placements
Tarrant, D. (2023). Criminalising wage theft. Retrieved from https://www.aicd.com.au/board-of-directors/duties/liabilities-of-directors/criminalising-wage-theft.html