There are many reasons why payroll services are a necessity for small businesses. From managing your employees to staying compliant with your business’s regulations, there are many benefits to using a company specializing in these services. However, when selecting a service, it’s essential to choose one that can be integrated with other business software, has an excellent track record, and is committed to growing your business.
Payroll Services Reduce Your Risk
The first benefit of payroll services for small businesses is reducing risk to their business. Small business owners might need help understanding all they have to comply with for payroll. So using an expert, for this reason, makes sense.
For example, payroll processes are subject to federal, state, and local laws. The Fair Labor Standards Act (FSLA), Federal Insurance Contributions Act (FICA), Federal Unemployment Tax Act (FUTA), and Equal Pay Act (EPA) are just some of the complex laws that every employer has to contend with.
Small businesses’ most frequent payroll errors are not paying their employees on time, misclassifying workers, and the need to comply with federal and state wages and hour hours. Just the simplest mistake in payroll could lead to steep penalties.
A payroll services company takes on the legal burden of managing payroll for small businesses. Payroll companies know how to process payroll in a way that is legally compliant and meets tax requirements. And if you can find a local payroll company, they’ll better understand state wage and hour laws.
You know the importance of keeping accurate records if you run a small firm. They help you make better business decisions and meet your tax obligations. However, you may need to understand how long you should keep these files clear.
The IRS recommends that businesses keep employment tax records for at least four years. Keeping these documents is essential because they could help you prove your company’s performance and make a case against a lawsuit. Keeping them for longer than this can result in steep penalties.
Aside from tax records, small businesses also need to keep corporate and ownership records. These documents can help you monitor the flow of money into your business and measure progress toward your goals.
To determine the amount of time you should keep your records, check with your state or federal agency. Conditions vary in how strict their regulations are. For example, some documents must be kept in New York for up to six years.
Comply with labor laws
You may need help to comply with labor laws if you own a small company. New regulations are often issued yearly, and you must ensure that your company is fully compliant. In addition to protecting employees, these laws ensure a safe workplace and prevent discrimination.
Federal and state labor and payroll laws are designed to protect your employees from unsafe working conditions and to promote fair compensation. You can avoid costly penalties by staying compliant.
Labor and payroll laws govern employment relations, including the minimum wage and overtime pay. They also protect minors and workers who are disabled. The Americans with Disabilities Act (ADA), for instance, mandates employers to provide reasonable accommodations for people with disabilities.
Some laws also specify rules for hiring and firing. Others provide for the rights of employees to collective bargaining and family leave policies.
A business must also provide notice to employees regarding their rights in the workplace. Most of these laws prohibit retaliation against employees who file a complaint.
Integrate with other business software
Payroll software is an essential part of your workforce management strategy. It not only helps you pay employees on time, but it also makes sure you’re paying them accurately. You may not know this, but payroll software helps you manage your HR functions. It can include employee onboarding, talent management, and benefits tracking.
Having an integrated payroll system can save you a lot of time and money. A sound system will automatically sync and update your data, reducing the chance of human error.
Some of the most common integrations involve accounting and time and attendance systems. These software applications allow you to track employees’ work hours and calculate their salaries. Other options will allow you to clock in and out on your smartphone.
Depending on your specific needs, there are several different types of payroll software. One of the best is Gusto, explicitly designed for small businesses.