Addressing common payroll misconceptions

icon_ddIn honor of National Payroll Week, Accounting Today recently interviewed Chris Rush, division vice president of strategy for ADP Small Business Services, about common questions the company receives from customers on payroll.  Below is a summary of the interview. For the full article, click here.

Are all managers exempt?

No. The job title itself doesn’t determine that. The Fair Labor Standards Act (FLSA) clearly states that there are specific salary and duties tests that must be met in order for an employee to be considered exempt.

Can workers waive their right to overtime pay?

No. Employees can’t waive their right to overtime pay, particularly non-exempt employees. If an employee is not exempt, they must be paid overtime whenever they work more than 40 hours in a workweek.

Can everyone be paid by direct deposit?

Employers can give employees the option to be paid by direct deposit, but there are states that prohibit employers from requiring their employees use direct deposit, so they leave it up to the employee to make the decision on whether they want to opt in for direct deposit or not.

Do employers have to pay non-exempt employees for time spent in training?

Yes. Under the FLSA, training that’s related to the employee’s job or that’s going to help the employee become more effective in their current job, must be paid for by employers. There are exceptions, but they’re really stringent. You have to meet four kinds of criteria: attendance is outside of the employee’s regular working hours; the attendance is voluntary; the course, lectures or meetings are not directly related to their job; and they’re not actually doing work while attending the training. Otherwise, it’s considered paid training.

If an employee has to go to the hospital for treatment, do they have to be paid at the time they’re seeking treatment?

Yes. Time spent waiting for and receiving treatment has to be paid for if it’s during normal working hours.

If the company is having a holiday party, do they have to pay their employees for the time spent at the party?

If a party is required or it occurs during normal working hours, employees must generally be paid for time spent at the party.

2 thoughts on “Addressing common payroll misconceptions”

  1. Thanks for sharing well written article on the topic.

    Many are still not aware about payroll. Unfortunately, many payroll professionals reduce payroll to just uploading some HR data onto a software and downloading some reports for the consumption of the finance

  2. Steve Wisinski CPA CFE MAFF says:

    Thanks Logan. We are hoping that providing this information will help employers understand payroll better and be able to have an educated discussion with their payroll providers.

    Thanks for reading and commenting.

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