In 2017, Arturo Castro noticed that he was paid $608 less than what he believed was due him. He sued the company.
The result? The court ruled in his favor, ordering the company, Precision Demolition LLC to pay Castro and his co-complainants over $45k. This amount included not only his overtime pay, but also other damages including back pay, and attorney’s fees.
Cases like Castro’s are not unique. Payroll management issues also happen where there is an employee and there is an employer.
Take the case of Rider Levett Bucknall, Phils. Inc (RLBPI), a company based in the Philippines.
In 2015, the company discovered that their chief accountant was using the company’s funds as her personal lending bank account. The company won the court case, but they were still required to pay the employee about Php 30,000 ($600) for nominal damages.
Whether the errors were malicious in nature, as in the case of Vazquez, or human error, like in Castro’s case, these payroll mistakes cost the companies thousands in damages. They also incurred expensive attorney’s fees.
The losses are not just in monetary value. More importantly, they involve time that companies like Precision and RLBPI had to spend trying to remedy the wrongdoings.
This is inefficiency, magnified.
In a recent study conducted by SD Worx, over 80% of the surveyed employees reported having been paid incorrectly. So what if there are a few errors? Surely, this should be easy to correct.
Sure, but again, that’s going to cost you.
Aside from employees leaving your company when they don’t get paid properly, you run the risk of court cases. Even worse, you might get a call from the IRS. Over 40-45% of companies pay penalties due to incorrect payroll taxes.
Ensure accuracy and compliance by assembling a skilled team dedicated to managing payroll. Payroll outsourcing companies possess the professionals and expertise to navigate complex payroll regulations. They minimize errors. Additionally, they swiftly address any issues that arise, safeguarding your company from costly mistakes.
While hiring a dedicated team of payroll professionals can enhance accuracy and compliance, it comes with significant costs. Recruiting, training, and maintaining payroll staff can strain resources and add to operational expenses. Additionally, reliance on human input leaves room for human error despite expertise.
Invest in an automated payroll system to streamline processes and reduce the likelihood of human error. These advanced systems automate calculations, tax filings, and compliance tasks. As a result, they enhance efficiency and accuracy while freeing up valuable time for your team to focus on strategic initiatives.
Implementing a payroll outsourcing service may include an automated payroll system that offers efficiency and accuracy benefits. However, it requires capital investment and ongoing maintenance costs. Moreover, the reliance on technology introduces the risk of system malfunctions or errors. These may disrupt operations and require technical support to resolve.
Consider payroll outsourcing services to onboard experienced professionals who specialize in managing payroll processes. Outsourcing providers leverage their expertise and advanced technology. Consequently, they ensure accurate and compliant payroll administration. This allows your company to benefit from efficient, cost-effective solutions without the burden of in-house management.
Payroll outsourcing companies offer numerous advantages beyond cost savings. By partnering with experienced providers, businesses can access expertise in payroll regulations, ensuring compliance and minimizing legal risks. Outsourcing payroll services also frees up internal resources. It allows teams to focus on core business activities rather than administrative tasks. Moreover, outsourcing providers often leverage advanced technology and scalable solutions. This enhances efficiency and accuracy while reducing the burden on internal staff.
Finding the right payroll outsourcing service provider that will handle your payroll services is like choosing a long-term partner. This partner will look after your interests as a company and ensures your employees’ peace of mind.
You want a payroll administration partner that is reliable and experienced in leveraging the appropriate technology for your specific business.
One Outsource, a leading outsourcing company in the Philippines, has been a trusted partner of multinational companies for over 20 years. With the company’s Employer of Record (EOR) and payroll administration services, business leaders get to focus on growth. Meanwhile, One Outsource handles the important administrative tasks of ensuring that your people are paid correctly.
Or you can do it yourself. Just brace for (potentially negative) impact.
To learn more about how One Outsource can help you in this business challenge, contact our expert advisor now.
