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5 Mistakes to Avoid When Hiring Canadian Independent Contractors

Posted by Stacey Duggan

|

Apr 17, 2017 9:00:00 AM

5-Mistakes-to-Avoid-When-Hiring-Canadian-Independent-Contractors.jpgSometimes, employers just don’t need full-time employees but require workers for specialized projectsin shortertime period. For those looking to hire these types of worker, it’s important to make sure you understand how contractors differ from employees

Avoid these five mistakes if you’re considering hiring Canadian independent contractors.

1. Classification

Misclassification is big problem for businesses. Wrong employee labels result in serious consequences. By misclassifying, you’ve been miscalculating wages, benefits, and taxes incorrectly from the start. Canadian independent contractors are not employees, and this crucial distinction is defined by their nature within the company. 

Download our free guide on what US companies need to know about paying  employees in Canada.

Courts use a four-point test to classify an independent contractor:control, equipment and tool ownership, subcontracting ability, and profit chance/risk loss.Contractors have more independence from the employer than full-time employees. They generally own and provide the majority of the equipment and tools for the project, and theyhave the ability to subcontract some work if necessary. In addition, if they have a chance of profiting and run the risk of incurring lost profits, they’re contractors.

2. Poorly Drafted Contracts

An employee contract should be drafted in line with the provincial Employment Standards Act, and the same rules apply for contractors. If a contract is signed between the business and the independent contractor, it’s necessary to clearly indicate within that said person is an independent contractor. Clearly defining this worker within the contract helps it hold up and remain enforceable in court. This will also later help fend off categorizationissues by the Canada Revenue Agency. 

A well-written contract classifies the intention of the relationship. While courts will still consider circumstance and individual facts of the case, well-worded contracts between businesses and independent contractors better highlight theirindividualsituations.

3. Miscalculated Taxes

Taxes for Canadian independent contractors are calculated differently than employees, precisely because of their different classification. In fact, employers do not handle the tax responsibilities for contractors at all. Again, the importance of labelling workers correctly at the beginning is key for avoiding future penalties and ensuring the right amounts are calculated in final remittance reports. 

When it comes to contractors, withholding amounts, reporting requirements,and CPP and EI contributions are not deducted as with regular employees. 

Knowing the difference is crucial forensure compliance with tax regulations.

4. Wrongful Distribution of Wages and Benefits

Pay and benefits also have to be precisely calculated. Just like tax deductions, these are also totalled differently. Canadian independent contractors aren’t provided benefits. 

A contractor isn’t employed by the employer in the same sense that an employee is, so a contracto’s pay is calculated differently—they are typically paid a higher wage but they do not have deductions for benefits, pension, or anything else. An employee integrates commercial activities to the payer while independent contractors integrate the payer’s activities to their own commercial activities.

5. Miscommunicated Intention

If you’re unclear about contractors’ roles from the beginning, the intention of their business may never clear up during the project. Confusing employee status can cause problems in the working relationship.Remember that unlike with the employee, the employer has less control over independent contractors. Contractors set their own schedules, which both parties agree to. 

Contracting shouldn’t be a full-time job disguised an independent contract work–this is an incorrect intention. Employers should familiarize themselves with the legislation and policies on employees and Canadian independent contractors to ensure they clearly understand the differences between them and can clearly communicate the intent of both workers. The four-point test mentioned earlier is key to distinguishing the type of worker hired. 

Clearly understandwhy contractor services are considered independently contracted. Be clear about who you’re working with and the job needed to ensure both parties know a contractor is hired and not an employee. Miscommunication just leads to confusion.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Compliance

How Do I Terminate an Employee Who Isn’t Working Out?

Posted by Stacey Duggan

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Apr 5, 2017 9:00:00 AM

How-Do-I-Terminate-an-Employee-Who-Isnt-Working-Out.jpgIt happens. You hire someone who appears to be the right fit with the right qualifications. Shortly after they start though, it’s a disaster. Incorrectly firing personnel is bad business, so how can you fire staff without getting into legal hot water? You have to cover all your bases to ensure you correctly terminate an employee, and protect your business.

Timing

Employers have to be incredibly careful when deciding to terminate an employee. Ideally, the sooner you can terminate an employee, the better. The standard 90-day probation period generally lets employers off the hook for firing, however, confirmwith the correct legislation in case a period of notice, or pay in lieu of,still applies. Firing an employeewithin this period can also leave employers vulnerable to backlash comments that this intervalis a training and skill-testing period, but generally, employees fired at this time have no right to appeal.

Firing a staff member after probation requires a reasonable notice period.Various factors will determine how long reasonable notice is: age, years of service, their character, and availability of similar jobs. Employees are still entitled to receive compensation and benefits for a sustainable period, as if still employed by the employer.

Download our free guide on what US companies need to know about paying  employees in Canada.

Comply with the Employment Standards Act

Review all the various laws to ensure you can terminate said employee and have met the provincial legislation standards to avoid possible lawsuits and legal penalties. Each province has its own labour law or employment standards act to follow, which specifies whether the employee has to be paid out or not. They also outline the minimum standards of pay and benefits employees are entitled to receive upon leaving. 

When you terminate an employee, their severance package must meet these minimum requirements. Ensure you’ve followed the provincial legislation, your employer handbook, and the employment contract prior to firing. If necessary, obtain legal advice to confirm you’ve covered your bases.

The Employment Contract and Termination Letter

Complying with the correct terms of the employment contract is key to verifying termination. Employment contracts need to be reviewed to make sure you’re not breaching any terms, and the contract will spell outspecific provisions regarding termination. Examining this document first ensures you have legal grounds to fire this employee.You may also need to confirm the employee was given proper warnings and a chance to improve, and that regular performance reviews were conducted along with meetings and chances to explain, if necessary.

Keep in mind that termination clauses in contracts may vary depending on who drafted it. Courts have the power to set aside documents that don’t meet the provincial requirements, so it’s important your employment contracts meet minimum standards in initial drafts to avoid future legal disputes. Improperly drafted contracts that fail to meet ESA standards can be thrown out.

After reviewing the contract, draft the termination letter. The termination letter must be ready when you call the meeting with the employee, and after you’ve inspected the employment contract. It should specify the end date, and clearly communicate that this is termination, to avoid confusion of it beinga disciplinary or time out period. Details about the amount of notice, payment in absence of, and severance package will be noted here.If your letter offers benefits above the requirements outlined in the ESA, have the employee sign a release in exchange for receiving the statutory amounts. This ensures full coverage and future liability for your business. This option is completely discretionary to employers.

Once you’re legally and ethically clear to fire, deliver a termination notice and hold an exit interview to explain to the outgoing employee the reasons they are being let go. It’s not easy firing staff, but at the end of the day, it’s just business.

7 Signs It's Time to Outsource Payroll

Topics: human resources

Why Use Payroll Outsourcing

Posted by Stacey Duggan

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Mar 13, 2017 9:00:00 AM

Why-Use-Payroll-Outsourcing.jpgPayroll is one of the biggest hassles for businesses. Writing cheques, calculating payroll, paying taxes, and maintaining accurate records takes time away from core objectives. When you own a small business, the time and affiliated costs devoted to payroll management means less time and money spent improving your business’soverall features. 

Tocombat this, small businessesareturning to the expertise of third parties. Read on to discover how payroll outsourcing could help your company

Download our free guide on what US companies need to know about paying  employees in Canada.

Reliability and Knowledge

When you outsource payroll to a third party, you can be sure of expert knowledge and a reliable team. 

It’s hard to keep up with new regulations, changing tax rates, and revised government forms. You can be sure third-party firms have this covered and are able to handle any upcoming changes because their job requires it. They know the ins and outs of payroll processing, compliance and HR matters, ensuring your business meets government standards. 

The expertise outsourcing firms provide means your business is less likely to submit incomplete forms, which would result in penalty charges for late filings and missing paperwork. Outsourcing payroll to a third party ensures correct and complete submission of applicable forms and reports required by the government.

Save Time and Money

With your payroll and HR departmenttaken care of, your employees can get back to focusing on your business’s chief goals. 

The time spent maintaining accurate accounting reports, submitting tax receipts, and filing employee insurance can be reallocated to marketing, strategy, customer service, and other daily chores. Staff who previously dealt withpayrollcan now concentrate on principle business matters. 

Time saved is money saved. As third parties operate at volume, they can handle your business’s responsibilities for less than in-house costs, helping reduce your overhead fees. 

Calculating payroll is a time-consuming, detail-oriented task that requires substantive review. Payroll outsourcing gives that time back to small businesses, so they can continue refining the key characteristics of their business.

Don’t Worry about a Contingency Plan

Handling payroll in-house means there’s always a chance of staff leaving, whether for retirement or a job elsewhere. 

This risk is eliminated when you work with a provider, because you don’t have to fear staff, andtheir skills, walking out the door. Outsourcing payroll removes two burdens: spending time and money in-house to hire someone new, and training said person. 

When you delegate payroll to an outside firm, you always have a team of experts within reach, ready to handle your payroll matters.

One Team = Multiple Departments

The payroll department doesn’t end after calculating and distributing payroll. It also covers human resources. You have to account for benefits, pension plans, worker’s compensation, sick pay, and more.

Many providers offer additional services to meet your firm’s specific needs. Trained professionals have the skills to handle your distinct HR concerns. With these responsibilities taken care of, your team has more time to concentrate on business improvement and overall efficiency.

Most firms are flexible with the services they offer, and for a small fee, can easily integrate their information with your company’s demands.

Won’t Be Left Behind

Managing payrollis a meticulous duty. Payroll outsourcing requires constantawareness of current pay rates, tax law, employment standards, and the right technology to ensure these tasks are done properly.

Third parties keep pace with filing, technology, and other timely updates.They understand the specifics of legislation that apply to your business, so you can be sure your payroll department is in line with federal and provincial standards.

Legislation isn’t the only thing to be aware of—updated technology is essential to completing and filing your forms properly. Continuously updating your firm’s softwareto the most current version is an additional, and sometimes costly, expense. Without it, however, the wrong tax tables can leave errors in your records. Payroll outsourcing provides you with a team that is sure to have the latest technology at its fingertips to get the job done properly.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Why Payroll Compliance Legislation Is Important

Posted by Stacey Duggan

|

Feb 20, 2017 9:00:00 AM

Why-Payroll-Compliance-Legislation-Is-Important.jpgBusiness owners have a number of rules to follow to run their businesses effectively, from both a corporate and legal standpoint. Payroll compliance is arguably the largest financial obligation a corporation has, and employers should always keep in mind compliance and legislation to avoid serious penalties. 

The legislation surrounding payroll can be confusing, so it’s critical for businesses to be aware of current and changing regulations. Below are some key issues that highlight the importance of payroll compliance.

Legally Required to Comply

If your company doesn’t meet the standards of various acts and legislation, you’ll run into a mountain of problems. Understanding employment and tax law are necessary to accurately report your company’s operations, and incorrect filing or employee misclassification can lead to fines, penalties, or potential lawsuits. For the growth and safety of your business, ensure you’re complying with the correct laws and regulations so your business is operating in a sound manner. 

Download our free guide on what US companies need to know about paying  employees in Canada.

Making sure your company’s paperwork is accounted for is key, and one aspect of this is that corporations have to file taxes to be recognized as legitimate businesses. To make sure your company is in good standing and filing paperwork correctly, understand which federal and provincial laws apply to your business in order to ensure that your organization is following them. If you’re unsure, you can seek advice from a third party. 

Legal compliance varies across the provinces—businesses in each province abide by a different employment standards act. To make sure your company is in line with regulations, and to avoid fines or penalties, make sure your business adheres to the correct provincial legislation.

It’s Not Just about Payroll: Ethics & HR

Payroll compliance doesn’t stop at making sure your employees are paid correctly and your tax reports are filed on time. It includes your company’s human resources department: employee benefits and bonuses, hiring and firing practices, and how pensions, sick leaves, and holidays are paid, for example. 

Compliance goes hand-in-hand with human resources, and your business should have a strong code of conduct and good company ethics. For their own consideration and security, businesses need to make sure they look after their employees. As the business owner, you want to make sure you aren’t infringing on your employees’ rights or benefits. 

Payroll legislation is about more than simply processing payroll because it affects all areas of a corporation. Manage, and reduce, your company’s risk by making sure every aspect of payroll compliance is included.

Seek Third-Party Help

As payroll compliance can be confusing and overwhelming, you may find it more helpful to consult an outside source. Third-party firms, or professional employer organizations (PEOs), are an advisable solution for corporations that do not have the time or resources to keep a legal team in-house to focus on changing regulations.

PEOs and outsourced providers are convenient because knowing the ins and outs of payroll compliance is the heart of their business. Their expertise extends beyond payroll to include tax filing, classification, health and safety, employee sick leave, holiday and benefit pay, as well as knowledge of employee and tax law.

Instead of using your resources and time to pay a team in-house that may not understand all aspects of compliance, outsourcing the work to a team that does will help your firm avoid costly mistakes. Working with a third party means working with people who are fully capable of handling the trickier parts of compliance legislation.

Companies that don’t follow payroll compliance put their futures at risk. Complying with the demands of payroll legislation will keep your business legally responsible and running smoothly.

7 Signs It's Time to Outsource Payroll

Topics: Compliance

5 Mistakes US Companies Make When Expanding into Canada

Posted by Stacey Duggan

|

Feb 6, 2017 9:00:00 AM

5-Mistakes-US-Companies-Make-When-Expanding-into-Canada.jpgAn increasing number of US companies are setting up shop in Canada, while others have plans to do the same. Unfortunately, expansions are often rushed in order to start profiting from a new market as quickly as possible, and this leads to mistakes being made.

Though the economic landscape is fruitful, strong, and steady, you must avoid making devastating mistakes when expanding into Canada. Here are the top mistakes that are constantly being made by US companies that cross the border.

Download our free guide on what US companies need to know about paying  employees in Canada.

1. Failing to Understand Canadian Employment Laws

Though Canada and the United States are similar in many ways, there is one distinct difference that must be considered: employment law. Once you start to hire Canadian employees, you must treat them, pay them, and manage them following Canadian employment standards—not the US standards that you’ve been used to following.

Many businesses expanding into Canada fail in this regard. They do not research federal and provincial/territorial laws, and thus, they fail to follow the required regulations. Whether it’s overtime pay, health and safety, human rights, payroll or anything in between, you must be compliant or you will face the consequences. Seemingly simple regulations such as drug testing employees is different in Canada, so ensure you do your compliance research.

2. Failing to Research the Market

Canadians may seem to love your brand. You may believe that you’ll make a great profit by expanding into Canada, but it’s important to understand just how large, complex, and costly of an undertaking it is to cross the border in business. If you don’t take the time to research your market, the demand, your competition, and the available talent, your new business venture could end up failing. Target’s failure in Canada is a great example of this mistake.

3. Employee Misclassification

We cannot begin to count how many US companies thought they could get away with classifying all of their new workers as independent contractors in order to avoid administrative headaches, employment standards, and additional costs, like insurance and payroll. Employee misclassification is bad for business, plain and simple. It is not worth the risk. The Canada Revenue Agency is strict and severe about the issue and violators will be prosecuted. This one mistake could ruin all of your plans of expanding into Canada.

4. Wasting Time Establishing an Administrative Presence

Before you can start operating in the Great White North, you have to establish an administrative presence in the country. This involves a lot of time and bureaucracy. You will need to set up accounts and infrastructure, register with the correct government bodies, and fill out a lot of paperwork.

Setting up an administrative presence can significantly slow down your expansion, which can harm your bottom line. Many US companies have made this mistake. Instead of falling into the same trap, partner with a professional employer organization. This will allow you to skip many time-consuming and tedious procedures that come with setting up shop, so you can get right to operating your new business as soon as possible.

5. Managing Payroll, HR, and Compliance Alone

As we mentioned above, Canadian employment legislation is complex but must be diligently followed. US companies often try to handle tasks like payroll, human resources, and compliance in house, which is extremely risky. It can lead to costly mistakes and non-compliance.

Instead, your PEO can take over the legal responsibility of your new Canadian employees and many of your administrative tasks, including payroll, human resources, and compliance. Partnering with a PEO is a smart risk management decision when you have little experience and knowledge of Canadian regulations in these areas.

12 Things an American Company Looking to Hire a Worker in Canada Needs to Know

Topics: Business Expansion

7 Considerations When Outsourcing Payroll

Posted by Stacey Duggan

|

Jan 20, 2017 9:00:00 AM

7-Considerations-When-Outsourcing-Payroll.jpgThere comes a time when all business owners will consider whether they should keep processing payroll in house or outsource it to a third-party processor company. This one decision can have significant impacts on many of your functions and departments. As such, it shouldn’t be taken lightly.

Outsourcing payroll comes with a host of benefits, but it isn’t the right decision for every business owner.

Before you decide to outsource, here are some factors to consider.

1. Workforce Variations and Peculiarities

Some companies’ payroll processing is relatively simple. If you only have a few employees and the process of paying them is straightforward, then it could be best to keep managing it in house. However, companies that have many workforce variations and peculiarities might find it best to outsource.

For example, if you have a mix of full-time, part-time, seasonal, and contingent workers, your payroll will be more complex. The same is true if you’re constantly onboarding and terminating employees. In addition, having workers in multiple provinces and territories can also make payroll more challenging, as can the offering of savings accounts, retirement accounts, health plans, and cafeteria plans. The more complex your payroll, the better the chances that outsourcing payroll is the right call.

2. Data Protection

Within your payroll management software, you will house sensitive information, including employees’ social security numbers, banking details, and salary information. It’s important to think objectively and understand just how safe that information is on your server. What’s more, it’s important to consider whether you would be comfortable with that sensitive data leaving your building and being stored externally with a payroll service provider. In most cases, however, payroll providers have stronger data protection protocols than most businesses.

3. Accuracy

If there is any function in your business that absolutely must be 100% accurate, it’s payroll. Your employees expect it and depend on it. As does the CRA. If you’re finding yourself making payroll mistakes all too often, then outsourcing payroll may be a wise decision to make in order to avoid employee dissatisfaction, a poor reputation, and fines and penalties. Payroll and tax errors happen—but they shouldn’t be a common occurrence.

4. Compliance

Compliance with payroll and tax regulations as well as employment standards for the payment of wages isn’t to be taken lightly. If you’re having trouble keeping up with changing legislation, understanding the nuanced and complex laws that you must follow, or paying for noncompliance far too often, outsourcing payroll is a good idea. Let payroll experts, who are well versed on legislative requirements, handle the task of ensuring that your payroll is compliant with all laws and regulations.

5. Accountability

In the event that mistakes occur, payroll is delayed, or laws are broken during the process of payroll, do you want to be the one accountable for fixing the problem quickly and efficiently? Do you want to be the one responsibility for fines and penalties for noncompliance? By outsourcing payroll, you can place some—if not all—of the accountability on the payroll company if things go wrong.

6. Cost

Cost is an important consideration when outsourcing payroll, although it shouldn’t be the only consideration. Many business owners falsely believe that outsourcing will cost more than processing payroll in house when in fact, many businesses can benefit financially from outsourcing. If you’re paying too much in human capital, software, equipment, supplies, and fines and penalties when processing payroll in house, then outsourcing can be the most cost-effective choice. Compare different providers’ fees and charges before choosing a payroll service provider.

7. Time

If your payroll process is simple and straightforward, it may take you no time at all. But for most businesses, payroll is a time-consuming and draining function. Either too much of your time is spent on the process or your HR personnel’s productivity and efficiency is reduced due to payroll processing on a regular basis. Either way, if you feel like you’re constantly trying to keep up with pay period after pay period and have little time left over for your core business, it’s a sign that it’s time to outsource. Outsourcing this function can save you considerable time.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

Why Your Business Should Partner with an Employer of Record

Posted by Stacey Duggan

|

Dec 19, 2016 9:00:00 AM

Why-Your-Business-Should-Partner-with-an-Employer-of-Record.jpgAn employer of record (EOR) not only provides solutions for human resources management, payroll administration, compliance management, and back office support, but it also assumes all administrative and legal responsibility for these tasks. While you continue to maintain control and care of your workers, the EOR will be their legal employer. Here are some of the many benefits of partnering with an employer of record.

Easily Establish a Canadian Administrative Presence

One of the most difficult aspects of expanding operations into Canada is the bureaucracy surrounding establishing a legal presence in the country. You must register with the required Canadian authorities, both federally and provincially. You must maintain accounts. You must set up infrastructure for banking and insurance. 

All of these steps can take considerable time; you may need to jump through hoops. But with an employer of record as your partner, all of the steps are eliminated. The EOR will already have the presence required for you to start hiring and paying Canadian workers with ease.

Complying with Employment Laws

Do you know what it takes to make your workplace compliant with health and safety laws? Do you know how many vacation days you must offer? Do you know how to administer benefits? Do you know the minimum wage, overtime rules, and meal break requirements where your employees are working? Do you understand the privacy laws and anti-discrimination rights of the country and province you’re working in? 

Canadian labour laws and vast and stringent. You cannot follow US laws to manage your Canadian workers. You must follow the employment standards of the country and the province or territory that the work is being performed in.

You have to ensure that you properly classify your employees, follow health and safety laws, follow insurance regulations, comply with employment standards, and much more. When you’re busy handling your expansion efforts and day-to-day operations, you simply don’t have the time required to learn all Canadian legislature related to your business and assure that they’re being followed. And you don’t have to when you have an EOR on your side. The EOR will ensure compliance for you.

Payroll Administration

Arguably the most complex function your organization will need to handle in Canada is processing payroll. You’ll need to understand the different tax rates, the rules, maximums, and exclusions for CPP and EI deduction, the varying deadlines for remittances, the paperwork that must be filed, and much more. Tax errors are common and result in big penalties. What’s more, tax regulations change regularly and it can be difficult to stay abreast of current laws.

Not only is payroll processing complex, but it’s also costly and time consuming. Instead of handling this business function in house, you can outsource it to your employer of record. Your employees will always be paid correctly and on time and you’ll always be compliant.

Mitigate Risks

As a business owner, all business responsibilities are ultimately on your shoulders. Even if you employ dedicated human resources professionals, payroll administrators, and compliance experts, if they make errors, you are the one who must face the consequences, including fines, penalties, and possibly jail time.

If your team members are US-based, then the chances of them making errors with Canadian payroll, HR, and compliance are high. Is it worth the risk? You can shift the burden of responsibility to an employer of record. The EOR will become your Canadian employees’ employer by law, which will mitigate risks.

An employer of record will no doubt make your expansion efforts easier. It will also make managing your workforce stress free, so you can focus on your other business responsibilities.

7 Signs It's Time to Outsource Payroll

Topics: Employer of Record

Payroll Best Practices: 5 Simple Ways to Improve Payroll Efficiency

Posted by Stacey Duggan

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Nov 25, 2016 9:00:00 AM

Payroll-Best-Practices-5-Simple-Ways-to-Improve-Payroll-Efficiency.jpgSmart business owners understand that there are ways to improve payroll efficiency, and that in doing so they can help maintain a high level of employee satisfaction. When it comes to payroll processing, the stakes of inefficiency are higher than simply mismanaging time.

The average HR department devotes as much as 35% of its time to payroll activities. As a result, inefficiencies can have serious consequences on your business’ overall efficiency and employee satisfaction. To make the most of everyone’s time and make sure you keep employees happy and comply with employment regulations, here are five simple ways to improve payroll efficiency.

1. Payroll Management Software

One of the benefits of partnering with a payroll solutions provider is the access you gain to otherwise expensive payroll management software. Good payroll management software is one of the easiest ways to improve payroll efficiency by turning hours of labour into simple data entry. 

Payroll management software is automated and therefore increases the efficiency of your payroll without the need to increase your payroll staff. Many top programs can also be used concurrently with other relevant office software and applications, making it easy for you to integrate this technological solution to your payroll system.

2. Enlist Your Employees

Getting employees involved in improving efficiency is a reliable tactic that many strong business owners recognize as valuable. You can engage your employees by asking for feedback and by distributing payroll responsibilities among your team. Even with a transparent policy, your employees may not understand the full intricacies of payroll processing.

Business owners should communicate with employees in order to identify areas of confusion and make sure they are addressed. Additionally, you can put more of the payroll responsibilities on your employees, even if they aren’t payroll experts. With adequate training, your employees can take attendance; handle expense reports, and more. When everyone shares the work, you can help avoid overworking your payroll staff and causing mistakes in your payroll processes.

3. Policy Transparency

Clear and transparent payroll policies allow your business to avoid mistakes that come from employee misunderstanding of the payroll system. These types of misunderstandings often occur in organizations where pay policies may not be made available to employees or where pay policies are presented in inadequate and unclear ways. 

When you focus on payroll issues such as underpaid taxes or employee misclassification, your business can makeimproving payroll efficiency part of your daily operations. Your business should present clear policies where employees can easily understand how payroll processes work, how employees are classified, and how salaries are determined.

4. Outsource Specific Aspects of Payroll

Among the ways to improve payroll efficiency, outsourcing certain aspects of payroll can be a big relief for business owners. There are many benefits of partnering with a professional employer organization, including the ease in dealing with regulatory agencies, time and money saved, and extra value such as group purchase rates and extra HR services. 

When you outsource specific aspect of payroll, you can improve payroll efficiency by avoiding compliance issues and focusing more of your company time on actual business. Dividing up payroll duties may be one of the ways to improve payroll efficiency. When you outsource, you ensure there are no discords in policies and that your affairs are in the hands of payroll experts.

5. Conduct Regular Audits

If your employees have frequent complaints about payroll, then a smart business owner would recognize that something in the system isn’t working right. Frequent complaints as well as frequent payroll mistakes are signs that you should be conducting regular audits of the entire payroll process. The best way to isolate and identify a potential payroll issue is through a thorough workflow analysis where you analyze each step of the process from beginning to end.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Payroll Processing

Why Your Business Needs Employer of Record Services

Posted by Stacey Duggan

|

Oct 31, 2016 9:00:00 AM

Why-Your-Business-Needs-Employer-of-Record-Services.jpgIf you’ve ever had to handle any aspect of your payroll and human resources work, you’ll know how much of a hassle it can be. These tasks require intense knowledge and a versatile skillset, since one slight change can affect you entire payroll. Trying to complete this work on your own is like trying to fix an engine problem without a mechanic. You may be able to attempt the job, but you probably lack the skill, adaptability, and time necessary to do it right. In both cases, performing poorly can result in a big, expensive mess that you’ll have to pay someone else to clean up. 

That’s why your business needs an employer of record (EOR). These organizations employ payroll and HR staff that can help your business for less money than it would take to hire full-time employees. In addition to their cost-efficiency, these firms also offer you unique advantages that you can’t find anywhere else. Ideal for both established companies and newcomers alike, an employer of record can take the worry out of your everyday payroll and HR tasks. Read on to find out how your business stands to benefit from an EOR.

Their Tax Expertise Ensures Compliance

Salespeople may be familiar with their ABCs: “Always Be Closing.” For payroll experts, there’s a slight variation on the phrase: “Always Be Compliant.” When it’s time to do deductions, remittances, and other tax work, compliance with codes and regulations is essential. The Canada Revenue Agency will catch any mistakes, and when they do, their retribution is swift and merciless. Late filing penalties can cost you up to 17 percent of your outstanding balance if you don’t make your full payment for up to a year. No businessperson wants to pay that kind of fine if he or she can avoid it. Thankfully, they can. 

An employer of record can save you from breaking the rules. Their staff is trained in tax codes, hiring and payroll regulations, CRA policies, and more. This saves you the time and trouble of researching these rules yourself, but it also ensures that you won’t suffer from penalties or fines. From a simple cost-benefit standpoint, EORs will end up saving you money by preventing these undesirable expenses.

Payroll Professionals Won’t Misclassify Workers

If you’ve ever gotten caught for misclassifying a worker, you know that the penalty is not worth the crime. Some companies deliberately classify full-time workers as independent contractors in order to avoid paying benefits, fair wages, and tax deductions. While this seems like an easy way to shave overhead, it represents a highly unethical violation of your workers’ rights. These employees, along with the CRA, are unlikely to show any lenience to those who are caught engaging in this practice. Class action lawsuits, investigations, fines, and more will beset your business if you engage in misclassification. 

Even though companies deliberately misclassify workers, you can still accidentallymake this mistake. An EOR will ensure that this doesn’t happen. You’ll never have to fear a mistake that will torch your reputation among tax agencies and employees if you hire the right employer of record.

They Offer Extra Value for Lower Rates

Employer of record owners know that they can’t just offer lacklustre service if they want to stay afloat. As a result, many of these firms offer added incentives to their clients. This can range from added services to highly advantageous benefits packages for your employees. Considering an EOR will ultimately cost less than a full-time staff, the value of these extra features is astronomical.

What Are You Leaving to Chance by Handling Payroll on Your Own

Topics: Employer of Record

5 Proven Ways to Improve Payroll Efficiency and Save Time

Posted by Stacey Duggan

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Oct 17, 2016 9:00:00 AM

5_Proven_Ways_to_Improve_Payroll_Efficiency_and_Save_Time-.jpgIf time is money, efficiency can make the difference between profit and failure. There will be times when your staff will have to do more with little overhead. When this happens, you’ll need to squeeze everything you can out of very limited resources. Payroll is often the first thing to suffer in these situations. You may be tempted to take a slash and burn approach if money is tight, but this is ultimately a shortsighted strategy that will lead to further expenditures down the line. 

So how do you implement policies that will allow you to maintain payroll quality while cutting back on unnecessary costs? There are a number of ways in which you can streamline your operations, but not all are created equal. Some will still put you at risk of further inconveniences, while others can actually help you improve on your tasks. With that in mind, here are five ways to improve payroll efficiency.

1. Make Your Policies as Clear as Possible

When your employees don’t understand payroll rules, your payroll personnel will need to spend more time educating everyone and less time actually working. If you establish your policies in clear terms and make them widely available, you won’t get bogged down in unnecessary inquiries. 

The problem with this method is that it’s a general purpose solution. If you need to save time and resources in a more comprehensive manner, this strategy is like putting a Band-Aid on a gunshot wound: it may cover up the problem, but it won’t necessarily have the desired effect.

2. Put More of the Burden on Your Employees

You don’t need to be an expert to complete some aspects of payroll management. Managers and other employees that have the proper training can easily take attendance, handle expense reports, and more. If you can offload these small tasks, it will give your payroll professionals more time to focus on bigger issues. 

While this is one of many ways to improve payroll efficiency, there are a few things to consider. Payroll staff often handles these tasks because managers and employees may be prone to conflicts of interest, or may bend the rules in certain cases. Furthermore, you may end up spending your saved resources on training your staff to handle these roles.

3. Hire Additional Payroll Staff

This option both upholds and violates the spirit of this article. If you consider resources on a company-wide level, you may be able to make adjustments and cuts elsewhere that will enable you to hire new payroll professionals. In theory, this will make your payroll department more efficient because more staff means greater output. Your staff will also have an extra set of eyes that can cut back mistakes and the financial penalties they bring. 

But this doesn’t truly qualify as one of the ways to improve payroll efficiency because you’re still spending more resources. Efficiency means doing more with the tools available, so if you have to add more instruments to get the work done, you’re not actually being more efficient.

4. Outsource Specific Aspects of Your Payroll

Among the options presented here, outsourcing is one of the most sensible. A payroll company can offer you an increased level of service without costing you a bundle. But dividing up duties may lead to discord between your policies and theirs. You may contradict our first point by complicating your payroll, creating more work for yourself. This is why our last option is most sensible.

5. Hire an Employer of Record

Employers of record offer you the convenience of outsourcing without the confusion and lack of control. They only hire tax and payroll experts, and these professionals can offer you full service without the cost that comes with full-time employees. When you work with an employer of record, the benefits are endless.

7 Signs It's Time to Outsource Payroll

Topics: Payroll Processing

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