Payroll is a constant job, which at times would require complicated and confidential processes. And most importantly, all these processes must be recorded and documented for the future. As it sounds, it might not be an easy job to work in a payroll department. But unlike other departments, the payroll department has a structured annual plan with proper deadlines to meet. Although it doesn’t decrease their workload, it definitely helps keep the procedures organized and meet the deadlines.
On the other hand, record-keeping can be a little challenging if not taken seriously. And you, as the organization might get into legal pitfalls or have extra workloads if you overlook the importance of record keeping. There are many online payroll webinars that can be useful to your payroll department. For now here are some key points to help you understand the importance of record-keeping in a payroll department.
1. Compliance with laws and policies
The IRS and Fair Labor Standards Act (FLSA) has rigid rules on payroll record-keeping and strict guidelines for the required information or method of record-keeping. The IRS and FLSA need the organizations to keep detailed records of each employee, their background checks, and other information for a certain period of time, even after they have left the organization. The standard time period for organizations to keep records of employees varies from state to state.
2. Prevent Litigation
Not all employees leave the organization on good terms. Payroll record keeping and detailed documentation of personal employee records including merit checks, etc, can save organizations from false claims or reports.
That means if you have the proper records of events happening, you may be able to prove your point better and defend your organization against such false accusations.
3. Review and Credit
Employee payroll records and documented details can also be used to keep track of employee growth over the years and their work credits. It offers a global view of the employee’s profile in the company. This information can be used within the company to help find suitable candidates for promotion or raise, and make decisions. This gives ability and access to the future employers of the employee also to understand the employee’s career in one file.
Final Words
Payroll is a major department in any organization, running many of the most important and critical tasks that if done correctly can help by contributing to the growth of the organization. But if not taken seriously, or done properly, it might also bring heavy falls on the company.
This could be because of the payroll department’s close attachment to the state and federal laws, which restricts many areas of the payroll department and mandate other areas of tasks. This creates the additional task of always staying updated with payroll laws and regulations. So, that they can stay in compliance with the law.
