Payroll Deductions Dos and Don’ts
Payroll deductions can be very confusing. It is important to know which funds are taken out of a worker’s pay, so you do not get any penalties. Some deductions are mandated by legislation and some are due to an employee. For example, Federal income tax or Social Security are mandatory payroll tax deductions. Insurance premiums or benefit plans are due to an agreement with employer and employee.
According to the Department of Industrial Relations “An employer can lawfully withhold amounts from an employee’s wage only (1) when required or empowered by state or federal law, or (2) when a deduction is authorized in writing by the employee, or (3) when a deduction to cover health, welfare or pension contributions is authorized by a wage or collective bargaining agreement.” Making payroll mistakes can happen. It is important to make the right steps to fix the errors. One of the most common payroll mistakes is overpayment. This is very difficult for employers because you cannot just take money out of an account. You must sit down with the employee and come to a written agreement that explains the reason for the overpayment, amount of money, etc.
It is important to protect yourself from making any payroll mistakes. It can be difficult to comply with the law. If you are unsure about payroll, contact us today.
Zempleo is a forward-thinking, certified minority-owned business (MBE) with large scale experience to manage payroll and staffing projects of any size. We stay up to date with legislative laws nationwide on a federal and state basis. By partnering with Zempleo, you can save time and eliminate any errors in your payroll process. Our technology system can accurately prepare payroll and send you tax and management reports easily and efficiently. We work closely with a Single Point of Contact (SPOC) who structures your payroll to match your organization’s specific needs and operational flow.