Payroll mistakes. These two words might not make you feel much when separated, but put them together, and “payroll mistakes” will begin to give you more than a slight pang of anxiety. Accurate and timely payroll is crucial for keeping your employees happy. That, in turn, helps retention while also ensuring your compliance with labor laws and avoiding costly legal disputes.
Healthcare agencies have a special set of challenges to overcome when faced with payroll. Why? The healthcare industry has complex, high-regulated labor laws, several different kinds of employment classifications, and intense record-keeping standards. Let’s take each of these potential mistakes point by point to help you avoid costly penalties in the future.
Mistake 1: Failure to comply with labor laws
The healthcare industry is highly regulated, and healthcare organizations must comply with various labor laws. Failure to comply with labor laws can result in legal action, fines, and damage to the company’s reputation. To avoid labor law violations, healthcare organizations must stay up to date with labor laws and regulations. This involves monitoring changes in labor laws, providing regular training to employees, and implementing policies and procedures to ensure compliance. In addition, healthcare organizations can consult with legal experts to ensure that they are in compliance with labor laws. Due to Medicare regulations for Home Health Care in particular, not having employee labor built into payroll could mean double work for payroll and accounting. Building classes into payroll will allow accounting rules to flow through payroll to financial statements preventing an overly complicated payroll process.
At Whirks, our People package provides businesses with the HR support they need to stay up-to-date with all their compliance worries. Besides receiving Labor posters and a federally-compliant employee handbook each year, our clients have access to our HR hotline where they can get their questions answered as individual employee issues arise. If that sounds valuable to you, check out all of our other home health care offerings here.
Mistake 2: Misclassifying employees
Misclassification of employees is a common mistake that healthcare organizations make with their payroll. Healthcare organizations often employ a mix of salaried, hourly, and contract employees, and each classification has different rights and benefits under labor laws. Misclassification occurs when an employee is designated as an independent contractor when they are, in fact, an employee. This mistake can lead to underpayment of taxes, overtime, and benefits, resulting in legal action and penalties for the healthcare organization.
To avoid misclassification, healthcare organizations must correctly classify employees according to labor laws. This involves examining the employee’s job duties, level of control, and degree of independence. If an employee meets the criteria for an employee, the healthcare organization must provide them with the appropriate benefits and comply with labor laws. Not sure how to tell the difference between an employee and a 1099 worker? Check out this blog to get more clarity on those details.
Mistake 3: Inaccurate record keeping
Accurate payroll records are essential for complying with labor laws, tracking employee hours, and processing payroll accurately. Inaccurate record-keeping can lead to underpayment or overpayment of employees, which can result in legal action and damage to employees’ trust.
Healthcare organizations must maintain accurate and up-to-date payroll records to avoid inaccurate record-keeping. This involves implementing a system for tracking employee hours, ensuring that employee data is correct, and maintaining these records. Additionally, healthcare organizations can use payroll software to automate the payroll process and reduce the risk of errors.
Payroll is a critical aspect of healthcare organizations, and making payroll mistakes can negatively affect the whole business.
Don’t make these mistakes: ensure compliance
Misclassification of employees, failure to comply with labor laws, and inaccurate record-keeping are 3 common mistakes that healthcare organizations need to look out for. At Whirks, we partner with businesses to automate many of these processes so business owners can focus on growing the business, rather than worrying about it. Reach out today if you want to ensure compliance, avoid legal action, and maintain employee satisfaction and retention through your payroll and HR processes.