Employee pay management can be a struggle if you aren’t using the right equipment or separating your stubs in the right way. Often times, clients tend to find themselves swimming in an ocean of poorly kept records and boxes of papers piled high to the ceiling.
If this sounds familiar, you aren’t alone. That’s why Excellent Admin is here to give you 4 tips for employee pay management
Punch Clocks
Punch clocks are a great way to log your employees hours each week. By having your employees use a physical punch card system or electronic tracking system, you can keep closer tabs on your payout to hourly employees. This system is also good for salaried workers who have to fulfill a time requirement throughout the week.
Tracking Overtime
Your systems should also help you take care of tracking overtime. With hourly employees, overtime hours are required when:
- After 8 Hours Have Been Worked That Day
- After 40 Hours Have Been Worked That Week
Double pay is required when:
- An Employee Starts Their 7 Day of Work in a Row, The First 8 Hours Are Double Pay
- Over 12 Hours Have Been Logged That Day
Each state has its own nuances, so make sure to look into each state’s employee wage laws to stay compliant.
Employee Pay Management
Even if you aren’t the best bookkeeper in the world, the rule of threes can be a big help for tracking employee pay hours. The rule of threes is simple. Separate your employee time cards into 3 month stints by employee. Since 3 months represents a quarter, it’s the perfect way to manage employee pay for your accountant, and that’s always nice.
You should always keep your records for three years after the fact just in case as well. You should keep them longer, but three years is the requirement for payroll documentation.
Exempt vs Nonexempt
Remember, paying your employees depends on their status in the workforce. People who fall under exempt have agreed to be exempt from the overtime laws, and thus, these people are generally salary workers. Salary workers are normally given options of investing in company stock and other incentive bonuses, but they normally have a work period requirement to become eligible.
Nonexempt works tend to be your hourly employees, and they are covered under federal and state wage laws.
If you have both types of employees working for you, it’s best to keep the records separate from each other.
Conclusion
Employee pay management is easy if you take the time to separate and automate as much as possible. By keeping better track of your time, you can cut down on lost wages through poor time tracking, and the result is an easier time come tax season.
All-in-all it really pays to keep quality track of time spent working.