Those who have worked with payroll before know that it is a great responsibility to make sure that the employees have been paid, both the correct amount, and at the correct time. Failure to do so can have some serious repercussions. Unlike other mistakes, which are more often chalked up to human error, payroll mistakes are much harder to dismiss as such. The reason for this is that payroll laws are strict and companies who fail to comply face greater scrutiny and in some cases, fines or worse. Not to mention the human cost, letting down employees can quickly lead to disillusionment with the company and could potentially cause a ‘brain drain’.
There are a few mistakes that can easily be avoided by making sure the company payroll systems are in good hands. Consider hiring bookkeeping Kent services to look after the payroll system and avoid these big mistakes, one of which is misclassification of employees, read on for more information:
Misclassification of Employees
If employees are classified as independent contractors when they are actually employees, this means that the company is avoiding paying taxes. The misclassified employee is also missing out on benefits which are due to them, such as health insurance, overtime, superannuation or savings plans, and protections such as unemployment compensation. Determination of employee versus a contractor can be much more complex than many may suspect. If in doubt, contact a certified chartered financial professional as soon as possible.