2014 is just around the corner and year-end payroll activities are in full swing. Many employers look ahead at payroll processes and trends while preparing for the start of a new business operations year. Payroll processing will always be a part of those operations, but how it’s performed as well as costs involved evolve with economic and employment realities. Additionally, advances in technology play a big part in payroll processing and payroll services.
Payroll Complexities and Payroll Services
The legalities of payroll change annually at a minimum, and employers must stay on top of them to stay in compliance. Payroll is further complicated by laws, rules, and regulations at different levels, including local, state and federal, prompting many businesses, especially small businesses, to use outside payroll services. Tax and revenue governing bodies can implement changes quickly and in-house payroll processors are required to act in tight timeframes to stay in compliance. Additionally, new laws like the Affordable Care Act further complicate payroll reporting and processing. These complexities aren’t going away in 2014, and there aren’t any efforts by the government to simplify them either.
Affordable Care Act and Payroll
The Affordable Care Act has implications beyond health benefits that extend into payroll processing. Many employers who had no benefits offerings now have to figure out how to incorporate the new required coverage by early 2014. This has added administrative layers including deductions and tracking where there were none previousl. Businesses have to get up to speed quickly or face a slew of administrative, legal, and financial difficulties.
Heading into 2014, the ACA has raised the need to link payroll and HR systems for many employers to efficiently and affordably track things like employee headcount, full-time employee status, benefit affordability and other issues. Payroll services are responding to this need and their reporting tools will be key for many employers to handle new administrative requirements of the ACA.
Paycards are Here to Stay
Despite the controversy paycards have posed, employers are using paycards more and more as a cost-saving payroll option. Although employees face fees to use the cards, card companies promote them as lower-fee options than check-cashing fees, overdraft fees, and other charges associated with bank accounts. They are cost-effective for employers as well, potentially saving thousands of dollars annually in payroll processing, and some card companies offer incentives such as $1 enrollment fees for employers to process payroll with paycards.
With the new economic realities and the real savings presented by paycards, you can count on them to stick around. Watch for more benefits from paycards such as free ATM’s for employees to access their funds and more ways for employers to cut costs and eliminate paper.
Paperless is Popular
Direct deposit and employee self service options are very effective paperless payroll solutions, but still generate some paper with paycheck stubs and W2’s. Technology has continued to evolve to make payroll totally paperless in addition to the current methods. Look for better paperless processes than paycards that enable small businesses to go 100 percent paper-free to save money, time and resources. Some payroll services may even offer incentives for going completely paperless. Improvements in employee self service options, better HRIS integration with payroll and cloud-related services will make payroll more efficient and cost-effective going forward.
Contact us with questions about how to remain compliant in 2014 or for more information about what to expect in the coming year.
Happy New Year from PAYDAY Workforce Solutions!