Payroll Processing & Government Regulations

Payroll processing is among the essential and time-consuming activities in any business whether small or big. Business owners are always advised to outsource the payroll services due to many reasons. One of the main reasons is because of the legalities associated with payroll processing. As a business owner or a payroll services organization personnel, you should clearly understand the government regulations associated with payroll processing activities so as to be sure you are doing the payroll in the correct way. All employers are expected to fully adhere to the payroll laws put in place by the government. Below are areas in payroll processing and the government regulations.

The timekeeping law by the department of labor ensures that workers are paid fairly and correctly according to the hours worked. It states that the system used to monitor time does not matter, it does not have to be a time clock as you think. As long as the system is proved to do the correct time calculations and that the employees are paid well according to the time worked, the system is good to be used. It should also maintain correct records. It can be hard copy or soft copy. It does not matter.

  • Processing wages.

This is under the department of labor in the USA under the fair labor standards Act. The act states that employers cannot pay their workers who are not exempted from the minimum wage act a wage that is less than 7.25 dollars an hour. For young workers who are less than twenty years, you cannot pay them less than 4.25 dollars an hour and this applies only for the first 90 days.

Payroll processing involves tax calculations whereby some taxes have to be deducted from the gross salary of employees. The government regulations on taxes apply to the withholding of taxes. The government requires employers to help them in withholding taxes during payroll processing. The taxes to be withheld include Medicare taxes, social security funds, city council taxes among other taxes. The employer must strictly follow the federal government’s payroll tax compliance guidelines to be able to withhold the right amount form employees’ paychecks.

  • Laws of the state.

Some states may have a different minimum wage than the one provided by the federal government. As an employer, you should check the minimum wage for your state and compare it with the federal government. The laws under the department of labor state that you used the higher minimum wage as the minimum wage.

  • Payment to workers with a fixed salary.

These employees expect a certain amount of money on a certain day. The department of labor requires the employer to pay his or her salaried workers the exact money on the payday unless there are other factors such are the employee overusing benefits which have to be deducted.

Processing your payroll will be very easy and faster with knowledge of government regulations on certain areas in payroll. After reading the above article am sure you are able to do your payroll services having been enlightened.