Last updated May 2021
This chapter examines key legal risks that arise in administering payroll for an employer.
What legal risks arise in administering payroll?
Administering payroll is an important function of any employer business.
A typical payroll process has nine stages:
- Employee clocks in and out using a time and attendance (TA) system.
- Supervisor reviews TA records against work schedules, makes adjustments and exports records to payroll.
- Payroll officers process the pay run using guidance material to calculate penalties, loadings and allowances.
- A variance report is run and reviewed to check for inaccuracies.
- Workers’ compensation payments are added.
- The payroll manager, HR manager or financial controller (or similar) review the proposed payments, including deductions, pay rate changes and employment termination payments.
- Bank payments are approved.
- Pay sequence is closed.
- Employees are paid.