Wage Theft and the State of Small Business Employee Trust
Later this week, we will break down the differences between hourly and salaried employees, and the legal classifications and payroll considerations associated with each.
If you already have or are considering an hourly compensation model for your small business, you might be aware of a recently released study from the Economic Policy Institute that investigated wage theft across the United States, and analyzed the impact of underpayment on the individual employees, the state economies, and taxpayers. The study offered several suggestions for addressing missed and stolen wages, including bolstering enforcement for such violations.
So why does this study matter to you as a small business owner? While it was certainly presented through the lens that companies are purposefully underpaying their employees, it also has application for those who are running their own payroll and trying to keep up with the myriad regulations, tax deadlines, and paperwork associated with the task (not to mention the actual day job of launching and keeping a small business going).
The reality is that payroll is complicated. Managing regulatory and compliance requirements is not a "set it and forget it" job, and you more than likely:
Don't have an interest in payroll—after all, it's not why you decided to launch a small business
Don't have enough time to keep up with the day to day of sales, marketing, admin, customer service, product, etc., without even getting into payroll calculation and processing
"For small business owners, payroll is in some ways sacred," said SurePayroll General Manager Andy Roe. "When they hand that paycheck to an employee, there's a trust factor. But there are also thousands of federal and state regulations to keep track of, and even inadvertently missing or falling behind on one of them can put that trust at risk."
Where to turn for help
If you're feeling overwhelmed, take a deep breath. Beyond the tactical elements of running payroll, you have options that can help take care of the regulatory and compliance side of things as well—and make sure you don't miss an update when it comes to filing deadlines, changes to minimum wage in your geography, and regulatory updates at the municipal, state, and federal levels.
If you already work with an accountant to manage your business, they should be able to help you stay up to date with policy change. There are also online payroll services providers that can process your payroll for you.
You'll want to ask any payroll vendor or outside resource you work with about the protections they offer and their process for alerting clients to relevant regulatory and policy changes—and you'll also want to be clear as to whether they will handle the payroll updates required by these changes, or if you will be responsible for doing so.
At SurePayroll, our first priority is protecting our clients and supporting the small business community. We guarantee payroll tax compliance and filings, and not only update our payroll processing based on regulatory changes in real time, but will also give you the heads up when a change impacts your business. When it comes to minimum wage, our platform will alert you if the pay rate you enter for a given employee is below the federal or state minimum wage based on work location.
You didn't get into business to manage payroll; don't let payroll be the reason you go out of business.