The $185,000 paycheck error made during a crisis

Even in a time of crisis, remind your payroll team that regulators will still check that you’re paying people correctly. That’s what one Georgia company found out recently, to the tune of almost $185,000.

MLU Services Inc. was doing work for the Federal Emergency Management Administration when it made paycheck errors related to rate of pay and fringe benefits. And that lead to hefty fines from the Department of Labor.

The company, which was on the scene in North Carolina in the aftermath of Hurricane Florence, violated the McNamara-O’Hara Service Contract Act by paying quality control inspectors rates applicable to data entry personnel, rates that were lower than required under the law.

Investigators also found Fair Labor Standards Act compliance problems – i.e., paying nonexempt employees a flat salary, even when they worked overtime.

Total cost of noncompliance? The company owed $184,838 to 18 employees.

Preventing paycheck errors in tricky times

Of course, Payroll pros are known for being vigilant when it comes to following labor laws. That attention to detail is needed in a special way during a time of crisis, whether it’s a natural disaster or the current coronavirus pandemic. But mistakes do happen.

For every action your company is considering in the midst of difficult times – even steps taken to comply with a new law, like the Families First Coronavirus Response Act – consider the repercussions for all the laws your company must follow.

Need more information?

Premier Learning Solutions is offering a workshop, Payroll Reconciliation: Spot Red Flags That Derail Paychecks & Reporting.

Live: Tuesday, May 14, 2020 at 1PM (ET) Also available on-demand

It covers:

• How to verify entries quickly and accurately for each pay period
• Mistakes or gaps that lead to penalties and increased fraud risk
• The importance of carefully reviewing payroll records in-between pay periods, and
• The latest and most significant Federal and State filing requirements.

The speaker is Mark Schwartz, who has over 15 years of experience in state and federal payroll tax audits, collection, and payroll consulting.

Click here for registration and more information.