Are you wondering how long does an employer have to fix a payroll error? If yes, you should click here to learn more about payroll mistakes.
Mistakes are common, but when that mistake involves payroll, it is a serious issue. Whether the problem is overpayment or underpayment, it is something that needs to be fixed as soon as possible.
How long does an employer have to fix a payroll error? Find out here:
How Long Does an Employer Have to Fix a Payroll Error?
The first thing to do when you notice an error on the payroll is to consult a professional at work. Most cases of an error involve a miscalculation of hours or an input mistake.
How long does an employer have to fix a payroll error such as these? Simple errors like these are easily resolved, but the error must be detected within 90 days.
Simple problems only take about one pay period to resolve. More complicated payroll mistakes will take more time to handle. Other payroll mistakes could include:
- Missing deadlines
- Neglecting to send 1099s
- Poor record-keeping and data entry
- Miscalculating overtime pay
- Leaving it all to a software program
- Not saving past payroll records
- Not maintaining confidentiality
- Not having a backup plan
Underpayment
Dealing with payroll error underpayment can allow you to collect penalties. To collect, you have to win a lawsuit or administrative claim. Federal and state laws are in place to protect employees when it comes to underpayment.
Because of the federal law, you have the right to liquidated damages if you were underpaid. This also qualifies if the overtime laws were not followed.
The federal Department of Labor says that employees have two years to receive payments that were lost during underpayment. This means two years from the date that the underpayment happened. For deliberate underpayment, you have three years to recover payments.
Overpayment
Overpayment from your employer could be an example of a payroll error. The correction time usually depends on when you tell your employer there is a problem.
Collecting overpayment can be done up to eight weeks before when you notify your employer. You also have a maximum of six years to do this.
Employers may ask you to deduct your wages or give them a check with the overpayment amount. The option to deduct it from a future paycheck is also available.
Employers collecting overpayment can be done promptly, but it depends on the state. You have to consider the statute of limitations when dealing with a payroll error.
Keeping Track
To catch any payroll error that could occur, it is important to keep track of payroll information.
Online paystubs can benefit you by giving instant access to information and records. It can also simplify the tax preparation process. A free pay stub template can be used for keeping track.
The Answer
So how long does an employer have to fix a payroll error? For simple payroll mistakes, it can take just one pay period, but more complicated errors could take longer.
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