Running a business isn’t easy by any means, and most of you reading this already understand that fact. It takes a lot of time and dedication to run a business of your own, but there are fewer things in the world that can make you feel more prideful. Running a successful company is not only one of the major goals most people have in life, it’s a great way to build a solid financial future in general.
As there are more small businesses starting up annually, this means that new business owners can fall victim to some of the more common “mistakes” that can be made when it comes to wages. Your scheduling is always important, and the wages associated with these hours will help determine things like profit margin and employee/customer satisfaction.
Employees who get paid more money tend to work with more effort, and thus provide customers with a better service - but this doesn’t always mean that paying more is the right answer. Finding the right wage and number of hours for each individual on your payroll is tricky, and we’re going to look at 3 common mistakes you can avoid in the future while doing so.
Paycheck Deductions (Due to Poor Performance)
While most business owners and employers believe that they can deduct pay whenever they’d like due to poor performances, but that isn’t the case at all. Federal laws are going to side with the employee almost every time, although there are a few exceptions that can be made:
- When an employee has missed two consecutive days of work without any genuine reasoning (disability, illness, or time off that was pre-planned), you can begin to withhold pay
- If an employee has committed major safety violations after the employer has put them in a position of power (through good faith), they can also be deducted
- Serious misconduct that leads to suspension without pay is another situation that would allow for deductions/refusal of payment
There are more to consider, but just remember that deducting pay will always be a matter of circumstance. Just because you feel like they “don’t deserve the money”, doesn’t mean it’s legal!
Timekeeping/Record-Keeping Inconsistencies
Maintaining a copy of all assigned shifts and hours worked is made much easier through scheduling software, but you still have to remember to maintain all of the most important data yourself. Employers are expected to keep employee information of this caliber on file:
- Full name, mailing address, and SIN
- Job title
- Salary
- Date of birth (if under the age of 19)
- How many hours are worked daily/weekly
- Overtime pay
- Both mandatory and voluntary deductions from paychecks
Automating both your payroll and scheduling process is ideal for many reasons, but mainly because it keeps all of this important information wrapped up in a neat little package. You don’t have to source the information from all over the place when the time comes!
Refusing to Pay Employees for Training, Travel, or Meetings
It’s a Federal law that you have to properly pay employees for any time spent training, traveling, or in meetings. If you’re a business owner and you feel like these aren’t truly “work”, then you have a lot to learn. The only way you could avoid paying for any of these scenarios would be:
- If they take place outside of regular working hours
- Attendance isn’t required (not mandatory)
- The training/meeting has nothing to do with your role or department
- Employees do not do anything “productive” during the training session
There are seemingly dozens of mistakes that both new and seasoned business owners make, but refusing to pay employees wages they’ve effectively earned or anything of that nature is still a common issue.
Hopefully, this article was able to shed a bit of light on the subject and teach new business owners the importance of understanding payroll deductions (and record-keeping).
