Recent legislation and regulatory changes make it more important than ever to keep payroll top of mind. Although payroll is complex, it doesn’t have to be a source of constant stress. Take these steps to stay on top of your payroll program and keep payroll headaches at bay.
1. Note important payroll deadlines. Timeliness is vital for employee relations, as well as deadlines for depositing payroll taxes to federal, state and local agencies. Late tax deposits can result in penalties and interest charges.
2. Classify employees appropriately. Classify your employees into categories such as temporary employees, consultants and independent contractors to ensure your payroll reporting is accurate for tax purposes. That will help you avoid common pitfalls if your business undergoes a payroll audit.
3. Report and calculate overtime pay. An incorrect classification could be costly if your restaurant be audited. According to the Department of Labor, litigation is increasing over “non-exempt” employees treated as “exempt” who didn’t receive overtime pay. Take time to review employees exempt and non-exempt status to save money in the long run.
4. Double check data entries. An incorrectly entered hourly wage and the wrong number of employee hours per pay period can cost operators millions of dollars annually. To avoid these mistakes, ask your processor if a “double check” is part of its process for payroll completion. If it’s not, ask to add it.
5. Save payroll records. Your business must maintain a comprehensive record for each employee, including time sheets, cancelled checks and W-4 forms. Keep them in a safe and accessible location for four to six years. Failure to do so could lead to criminal penalties and/or civil actions. Remember, the Wage and Hour Division of the Department of Labor must be able to inspect your records within 72 hours of notifying you.If you ensure your in-house or outsourced payroll processor follows efficient, accurate processing procedures, you can improve government compliance and employee relations.
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This content was provided by Heartland Payment Systems, the National Restaurant Association and Louisiana Restaurant Association's endorsed provider of secure payment processing, payroll solutions and marketing solutions. It is the developer of Freshtxt, a front-of-the house management system for restaurants.