Payroll operations are complex whether a business employs five or 500 people. Despite its complexity, the payroll process is highly regulated since it has the power to affect employee’s attitude towards the company and the business’s reputation in the industry.
This doesn’t mean payroll errors don’t occur, whether accidentally or deliberately. Such errors may have legal ramifications for the company, including costly fines and even possible lawsuits.
Maintaining payroll ethics when conducting this sensitive and complex operation is important. Does your company pay attention to ethics of conducting payroll?
Payroll Ethics – What Does It Mean
Payroll ethics is a structure that governs correct function of payroll operations – which ensure all employees are paid their monthly or daily remuneration in the correct amount and on time. Additional payroll processes must be in compliance with federal and state laws.
Deconstructing Payroll Ethics
There are several components of payroll ethics. Understanding them can lead to easy and better implementation of payroll ethics into your business operations.
First things first… everything related to the payroll processing system is confidential information between the management/HR and the employee. This includes all communication between:
ØEmployer and employees
ØEmployer and outside agencies (Internal Revenue Service)
Additionally, all processes conducted must comply with federal and state laws. All payroll errors should be addressed and fixed immediately.
Information security is also an incredibly important part of ethics. Finally, HR personnel who handle payroll processing of the company must be properly trained when it comes to maintaining payroll ethics.
Maintaining Payroll Ethics in Your Business is Not So Difficult
The payroll department in your company is the only one that will have access to confidential information of your employees. It’s important that employees working on payroll processing must keep a personal sense of ethics and integrity.
Having the right work conduct is important especially since payroll employees have access to information such as work history, family status, and work performance besides the salary and bonuses given.
This is where a strict code of payroll ethics comes in, which according to the American Payroll Association, any company can adopt and implement.
General Code of Payroll Ethics
This is shared by the APA, in the hopes of making payroll ethics easy to implement in any business’s structure:
ØBeing mindful of personal aspects between employer and employee (concerning payroll)
ØStriving for perfect compliance, accuracy, and timeliness of all payroll activities
ØStaying updated with legislative developments, actions conducted by regulatory bodies etc
ØMaintaining absolute confidentiality of payroll within employer conducted procedures
Another important component of payroll ethics is to stay abreast with latest technology changes that affect payroll processing operations in your company. What does this mean? You may have to retrain employees who handle this important operation according to new regulations, costing time and money.
An easy-way-out of this obligation is outsourcing your payroll processing to a company that offers professional online bookkeeping and accounting services. Learn how Florida based company, A&B Accounting & Business Solutions can help.
