Avoiding Payroll Errors When Managing a Seasonal Workforce
The holiday season is the busiest time of the year for most retailers, and many hire a seasonal workforce to ensure operations run smoothly.
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However, the addition of a seasonal workforce creates more payrolls for HR teams and heightens possibilities for error if the right processes and technology are not in place.
Payroll errors are no small issue. They can force employees to make hard financial decisions and have the potential to push people below the poverty line. They can also impact companies with compliance risks and a decrease in productivity and employee retention, which have a broader impact on a company’s success and hiring plans for the following holiday. To this end, business leaders hiring seasonal staff must understand how pay mistakes happen and be proactive to avoid potential errors before it’s too late.
How Does Incorrect Pay Happen?
Companies using traditional payroll processes are subject to several payroll errors. Some of the most frequent include missing/incorrect time punches and incorrect scheduling. Organizations hiring seasonal workforces can be especially prone to these mistakes since they have significantly more data to collect and analyze.
Seasonal workers often work a different number of hours each week depending on volume and other business factors. Therefore, they may have more flexible schedules and the ability to pick up overtime shifts and receive hourly pay, which can differ state by state. A OnePoll study commissioned by Paycom found 41% of U.S. HR, payroll or accounting professionals have miscalculated overtime pay and 64% have performed a retroactive payroll adjustment for incorrect or miscalculated pay.* The intricacies of seasonal workforces are especially difficult when coupled with HR teams working faster than normal to accommodate the increased hiring on top of typical year-end tasks.
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