Off-cycle Payroll Runs - Best Practices?
payrollba
1 Post
Hello!
I am a business analyst in my company's payroll department. Like most companies, we are currently examining our processes to determine if we are being as efficient and cost conscious as possible. I was hoping to get an idea from many of you what your companies may do in terms of best practices.
I work for a large organization. We are a multi-state employer. Regular payroll for nonexempt employees is paid weekly. Our exempt employees are paid monthly. For the most part any type of special payment (supplemental compensation) for our nonexempt employees are paid on the regular weekly payroll. For nonexempt employees, we do not issue many off-cycle checks. The only time that we would run an off cycle for a nonexempt employee would be if there were a financial hardship caused by a missing check, payroll error, etc.
However, we do run quite a bit of off cycle payments for monthly paid employees. It seems that there is some sort of off cycle activity occurring every day of the week for various reasons. Obviously this is NOT efficient nor probably the best use of resources. We are currently investigating why our off cycle volume is so high.
I have some questions I hope some of you will not mind answering to help give me an idea of what other organizations are doing.
**Is your payroll done in-house or outsourced?
**What pay frequencies are used in your company (weekly, semi-monthly, biweekly, etc)
**What is your off-cycle payroll policy?
Thanks so much!
Ann
Comments
**Is your payroll done in-house or outsourced?
**What pay frequencies are used in your company (weekly, semi-monthly, biweekly, etc)
**What is your off-cycle payroll policy?
Thanks so much!
Ann
[/quote]
Outsourced. Whenever I'm somewhere where it's not, I can generally make the case that it should be.
Weekly, often, over the last few years. I am a fan of semi-monthly but it's hard to move back to that from weekly.
We generally don't do off-cycle payroll except to correct payroll errors. I'm a big cheerleader for not doing employee loans, advances, or any other un-necessary payroll extensions or disturbing administrative or payroll processes. It comes around from time to time when you need to help a key employee (usually in sales) in a really bad spot but I'll bend over backwards to say no.
Monthly salary pay is legal in at least a few states and possibly in all of them. I prefer semi monthly over all other forms of payment as it cuts the right split between cost to the company and cash flow to the employees.
Our payroll is outsourced, although my CFO is considering bringing it in-house. I am in the process of trying to convince her to not do that. We pay our employees biweekly. I also am not a fan of off-cycle payrolls. It is a rare occasion when I will do this.
If you are having to do that many off-cycle payrolls then I think it is time for you to evaluate your current system like you are doing. Why is this happening - lack of manager training, error by payroll staff, employee not providing appropriate info, etc? Maybe you need to change to a different payroll cycle and this will cut down on some of the off-cycle payrolls. I am not a fan of the monthly pay as it is sometimes very difficult for new employees. I also think it is easier when all of your employees are on the same payroll cycle. You don't have to remember who gets paid when.