Plus: Save per-pay run with direct deposit and online pay stubs
Electronic payroll is changing the way companies operate, offering cost-savings and more efficient, timely, and reliable payment. If you or your business is considering a switch, there are a host of advantages—and a few disadvantages—you should be aware of.
Payroll expert Dayna Reum warns against running headlong into a new electronic payroll program without first understanding your state Department of Labor law compliance obligations and ACH same-day pay rules. HR professionals should also understand payment timing and pay cards.
E-Payroll Is Prone to Human Error—Just Less of It
Electronic payroll payments are great—most of the time. Snafus are few and far between, but when they do occur, the results can be devastating. In 2016, the Canadian federal government modernized its payroll, but flawed training resulted in thousands of workers not receiving their paychecks for weeks and even months at a time.
“It appears that when the previous government decided to go with Phoenix, the proper training wasn’t done and they tried to implement a system without a sufficient number of employees,” Judy Foote, the minister of Public Services and Procurement Canada, said in a CBC article.
Nevertheless, paperless payroll is here to stay, notes payroll system provider Gusto.
“Thanks to the continual growth and acceptance of cloud-based computing, more and more businesses are reducing their reliance on paper and instead, turning to the dependable, organizational benefits of web-based business solutions,” Gusto explains.
Benefits include:
- Containment of employee payroll data in one place
- Easier processing
- Reduced office waste
- Easier collaboration with accountants and tax preparers
- Secure back-up
- Fewer trips to the bank for employees
- Fewer payroll mistakes
Online Pay Stubs Net Cost Savings
In addition to smoothing operations for your HR or payroll department, other electronic payroll benefits, adds Business News Daily, include:
- Environmentally-friendly bonuses, such as reduced paper and printing
- No more lost-check fees
“Businesses save between $2.87 and $3.15 per pay run by paying employees electronically, such as via direct deposit, instead of via paper check,” reports Business News Daily. “Businesses save another $1.20 by providing pay stubs online.”
And while benefits outweigh drawbacks, Reum cautions that companies should also make sure their system satisfies state Department of Labor laws compliance.
(This post first appeared in a ProfEd blog)
By Jeff S on 18th August 2018
