Last week I was inspired by my attendance at the American Payroll Association‘s 29th Annual Congress. This is the biggest gathering of payroll professionals and vendors anywhere in the world. The common theme I observed during workshops and networking opportunities was that employees just don’t communicate changes to their payroll system well enough. Many presenters and attendees experienced the problem of a significant payroll event that was never given to them for processing. The demand was that the payroll department “just fix it.” This article is to motivate anyone who is an employee to stay on top of changes to their payroll situation. The following examples can provide a taste of the type of items that you can help with:
- Getting married. This requires a change to the filing status on the federal and maybe state W-4 forms. Those with the married filing status often see significantly lower withholding. If you don’t make this change, you may receive a much larger than is necessary tax refund.
- Changing state . Generally, withholding is required in the state where you work. If you change states, you need to make sure and complete a new federal and state W-4 to notify your payroll department of the change. Without this change, you may end up with no withholding where payments were required. This would force you to file a return in the state with incorrect withholding in order to get a refund of this money so you can forward it to the correct location. This is such a hassle!
- Garnishments/Levies/Child Support. If you have paid off the amount that was being withheld from your check and you do not follow up with that entity quickly enough, your payroll department will have no idea they are supposed to discontinue withholding. This means you will end up paying money for something that you don’t owe. It’s often really difficult to get this money back in a timely fashion.
- Terminations. This one really is the job of the manager or supervisor of employees. If you do not complete the necessary paperwork with the payroll department, you could allow an employee to continue to be paid for no work. That means you as a boss are directly hurting the profitability of your company. Unless in the case of a mass layoff or headcount reduction policy, employees are normally terminated for cause. Why pay them extra? They may already be receiving termination payments at the same time. It is very difficult for a company to recover these funds. It’s so much easier just to communicate the event to payroll
These events are more common that most people realize. By staying on top of these issues before they create a problem you are helping improve company profitability, reduce stress of employees, and reduce confusion with employees.