COMPLIANCE
Preventing overpayments
LoraMurphy ACIPP, CIPP policy and research officer, discusses the causes andwhat can be done to prevent the incidence of overpayments
H aving emanated from a background in operational payroll, I live and breathe the motto of ensuring that payment is made to employees both accurately and on time. This is a mantra that permeates throughout the industry, but payroll professionals recognise that there are some key areas in which payroll departments falter, and it would be plausible to state that overpayments is one of those. Overpayments are often cited as the bane of the lives of payroll professionals and can, of course, be caused from within the payroll team directly. They often occur because of miscommunication or, indeed, a complete lack of communication from other departments within a business or from employees. In the first in a series of articles that explore the issue of overpayments, attention here is focused on preventing overpayments from happening in the first instance. Subsequent pieces will centre on the steps payroll departments need to take when reclaiming overpayments, and the raft of considerations to be made prior to making deductions in relation to overpayments. Education of thewider business The CIPP policy team are passionate about payroll professionals educating the wider teams and employees within their businesses as to the importance of communication, and how this will ensure that staff receive the correct pay each period.
Payroll deadlines should be circulated frequently, and kept within an area, visible to all staff, to allow them to adhere to the timeframes set by the payroll department. Employees, and particularly department managers (who are more likely to be responsible for submitting payroll information) should be aware of the consequences of providing incorrect data, and of failing to submit any data at all, within the stipulated timeframes. It may also be the case that where a manager or someone responsible for submitting employee information to payroll leaves, their successor may not be aware of the processes or rules of providing that data to the payroll department. Again, emphasis is on education, and ensuring that everyone is aware of their responsibilities, business wide. Similarly, where employees have access to self-service, the importance of inputting information accurately should be emphasised to all staff. When employees provide information to managers, or a notification of a change, accuracy is again important. Education in these areas will, hopefully, work to eliminate the likelihood of overpayments being made due to internally incorrectly submitted information, which is delivered by individuals outside of the payroll department. This may even serve to demonstrate that payroll teams are not just responsible for ‘pushing a button’ (that old adage) and conveys to wider teams
within businesses that payroll is actually a significantly complex and demanding function, vital to the successful operation of any company.
Checks within the payroll department
Whilst communication with the rest of the business is important, it is also essential that the payroll department carries out its own checks prior to each payroll run. The types of check that many businesses favour include exception and variation reports. Reports of this nature allow the payroll department to identify any large fluctuations to the pay of individuals, so that further investigation can be carried out, and a reason for the substantial variation established. Whilst writing this article, I am acutely aware that payroll professionals are extremely busy individuals, particularly as many of them are still having to grapple with the extension of the coronavirus job retention scheme (CJRS). I do, however, need to include the recommendation that all changes made to payroll are ideally checked by a person other than the individual who made that amendment each pay period. This may, in reality, be a ‘nice to have’ at the given time, but the more checks that can be carried out, the higher the chance of eliminating any overpayments to employees, and running a successful, error-free payroll. Frequent causes of overpayments It is widely recognised within the payroll profession that there are some scenarios in which overpayments are more likely to occur. A common cause of overpayments is
...emphasis is on education, and ensuring that everyone is aware of their responsibilities...
| Professional in Payroll, Pensions and Reward | May 2021 | Issue 70 22
Made with FlippingBook - Online magazine maker