Understanding The Organization's Payroll: Employee Records, Annual Leaves, Overtime Payments, Superannuation, And Sick Leave

Employee Records

Question:

Discuss About The Employee Understand Organizations Payroll?

Employee’s records are always stored along with maintaining confidentiality keeping the records safe and secured. In today’s fast growing technology apart from written records, company prefers storing the data’s in their computers or laptops where they can put passwords and secure them (Kundu and Kadian 2012). Smith & Jones Pty Ltd also have secured their employees data’s where the records of the payroll are kept for 7years and are unlocked only at the time of working hours. The file named MYOB data is the place where this company’s payroll data’s are stored and it is daily backed up to keep a copy of the data on the off-site drive of the business (Alfred 2014). A password ‘diploma’ also safeguards it. The written records of the payrolls are kept in bolted filing cupboard to shield the privacy of the information’s of the employees.  The business of this particular company has an account with ANZ bank apart from it this particular company has no other assets and accountabilities. Any query that is not from the payroll rules is not entertained and the employee is sent to the supervisor for clearing his doubts. The queries are to be met keeping in mind the laws of privacy (Solove and Schwartz 2014).

According to the Australian government all, the employees are allowed to for paid annual leaves (Lin, Wong and Ho 2013). Annual leaves are what an employee is paid while they are having time off from work. The annual leave an employee is supposed to get, be it a full time employee or a part time employee, is 4hours, which is based on the usual working hours. Thus, as far as the reports are concerned Julie Simpson, who is a part timer in this company, has been working for 20 hours per week can take maximum of 4 weeks per year of holiday leaves. As Julie Simpson has already taken paid sick leave of 1 day, thus now she is eligible for 3 weeks and 6 days of leave in a year. Annual leaves are calculated from the very first date an employee joins the company also applicable for those who are serving the probation period. However, the leave that remains unused of an employee usually passes to the next year. When the employee is on unpaid annual leave, unpaid sick or career’s leave or unpaid parental leave then only there is no accumulation of the annual leave. The Australian Government’s scheme of paid parental leave is actually not considered as a paid leave (Baird and Whitehouse 2012). The total number of annual leaves of four weeks of an part time employee is calculated as here the employees working hours will differ week after week so the average working hour should be calculated first based on average working hour the leave the employee can result per week (Moss 2012). Then the total hours of annual leave is calculated that they can avail, the hours of already taken leave are decreased and finally, if they are ending with their employment then in their final amount their owned money must be reflected. Thus, the annual leave is based on the hours of work (Todd and Binns 2013).

Annual Leaves

As the businesses are raising thus the organizations are wanting that their existing employees to give extra hours to the work (Fujimoto and Azmat 2014). Thus, Julie Simpson who want to work on Saturdays as her boss has suggested her to will get paid and allowances as far as the company’s rules that is she will get double the time for working on Saturdays than the usual charges that is applied who does overtime on the weekdays. Julie has already put in overtime of 3 hours in this following month. Thus for employees who are eligible for working overtime that is the time after his working hours is when there is no health related risk for the employees in case of working extra, the personal state of the employee involving his responsibly regarding his family (Charlesworth and Heron 2012). It further involves the requirements of the company, the employee is permitted to receive the payments or penalty charges for the overtimes, the employees are given enough notice that they may had to work overtime and lastly the usual stand of working in the industry. According to the fair work commission (FWC) presently handed a decision which says that some allowances will be applicable both casual and part time employees via different awards (Stewart et al. 2014). Part time employees are different from the full time employees in cases where the full time employees works for longer durations for an average of 38 hours a week on the other hand, the casual employees work or irregular intervals of time and also does not get any paid sick or annual leave (Blyton et al. 2017). Whereas, the part-time employees get the same least amount of allocations as the full time employee, which is based on, the hours spend each week. Therefore, Julie Simpson will also get the allocations for working on Saturdays.

Superannuation is a process of saving for the employee’s retirement. The money actually is coming from the donations made into the company’s super fund by the employee’s name and preferably exceeding by their own money (Productivity Commission 2015). It is not ultimate salary scheme therefore the income will depend on the production of the employee’s funds. It is essential for all employers to provide the employees of their company an option for superannuation funds that includes- recognizing fresh employees who are eligible for this scheme, supplying them with a guideline form to those who are eligible, working on the selection that the employee has made over the fund scheme (Agnew, Bateman and Thorp 2012). However, as today the entire company’s details are stored in the computers. In the computers it is secured as well, it is the quickest way to provide the information asked for so to check the superannuation payments of both Fred Jones and George Smith the steps that needed to be followed are – first the it need to go to the search menu where the Superannuation funds are. It is where a window appears named Superannuation Fund list. Here by clicking this it may ask for the respective employees’ name or membership number. Providing that the information will be automatically generated.

Overtime Payments

The MYOB file is very important because all the information’s of this company is stored here which is protected with password, back up is done daily and for this system the audit trail is kept on. The payments reports are to be thoroughly searched. Payments reports are those reports where all the associate employee’s credits and lenders those the employee may face due to late or miss in any payment are found in details. MYOB file is a file of the company that is created for the business purpose. In this very file all the information are stored about the business and the employees like the business name, the contact details of both the company and the employees and the financial year. However, corporation act 2001, which has been reviewed by the ASIC on its requirements (King et al. 2014). This has however pursued input from as many as professional bodies and associates possible to compose a plan of suitable books and records. It further states that the companies must retain written records on the finances that accurately explains as well as records the transactions and the position of finances and productivity of each employee as well as the company. Then it further allows true and equitable statements of finances that must be prepared and scrutinized. Apart from keeping written records, companies must retain electronically the records of the employees and about the company. However, the section 288 of this corporations Act defines that if the records are to be kept in electronic forms then it must be changeable to a hard copy (Ferran and Ho 2014).

This company of Smith and Jones actually follows AMP life superannuation, which is the company in Australia and New Zealand that deals with superannuation and investments, insurances, advices on finance and banking that includes the home loans and saving accounts (Vidyattama et al. 2013). Thus, the advices that would be provided to Fred about his and George Smith’s payments are that Fred’s total amount is $4,680 and George’s $2268. Following this information, the advices that are provided are the superannuation responsibilities for the employees. This however comprises of the Australian superannuation law that the employees must follow (Liu 2013). The very first rule is to pay the guarantee of superannuation, then to provide a choice of funds, offering a standard choice form that is to be used by the employee, the employees choice of funds must not be influenced by the company. The income of the employees must be calculated correctly, keeping genuine records of those employees who have been offered with choices of funds and so on, employees should be kept informed, helping employees with their salary sacrificing if solicited by the employees and lastly to confirm the tax file numbers if necessary. However, this means that the employees must proceed with their employees tax file numbers (TFN) to their superannuation fund for authorized purposes (Latimer 2012).

Superannuation

The pay for the superannuation eligible employees is calculated from that very day when they have joined the company. The payments should be made minimum four times in a year. However, if the due date is falling on a weekend or in some public holidays then the payment can be made on the next very working day. The payments can be made regularly than quarterly if the employee wants to as long as the employee’s total superannuation guarantees commitment for the quarter is offered by the required date. The quarterly payment due dates for the superannuation payments for according to Australian taxation office are -

However, some superannuation funds require employees to contribute on the monthly basis.  If employees are deciding to register with this type of a funding scheme then it means they are willing to make monthly payments to that fund. The payments are to be made on complying super funds or the retirement savings accounts (RSA). The complying super fund is the one that encounters particular needs and duties under the super law and An RSA is a kind of account that provides by the companies such as banks and constructing societies for the savings for retirement

Sick leave are also called personal leave that an employee take time off to assist themselves dealing with their personal illnesses, caring duties and emergencies in family. This leave can be utilized if an employee is unwell or injured. There might be some other reasons like the employee may have to take care of some ailing member in their immediate family or may be in case of some emergency in their family , this is known as carer’s leave though it is included in the employees personal leave equilibrium (Duffield et al. 2014). According to the National Employment Standards, this involves both the paid and unpaid leaves allocations. Employees can take their paid sick leaves when they cannot continue to work due to their personal illnesses or injury. These illnesses can also include issues related to stress or pregnancy. However, all the employees excluding the employees who are causal workers are all qualified for paid sick or carer’s leave. The employees are eligible to get the same grant for both sick and carer’s leave. Further, an employee gets 10days of leave for the full-time employees and for part-time employees they get a pro rata of 10days every year determined by their working hours (Kosny and Lifshen 2012). To investigate this query the written as well as the electronic databases are to be looked for the information. The data can be found in the process pay report of the second week, which reflects the weekly payments of the employees, paid overtimes, sick leaves, and wage increase, long service leaves, pay slips, procedure and payroll advices of the employees. The Employee data & year to date figures will also show the holiday and sick leave that the employee is having or not for this month, following that is the year to date figures that reflects the sick pay amount. The records that the organization keeps are general, about the pay, the hours of work served, number of leaves taken or left, superannuation contributions, employees flexibility agreements, guarantee of the yearly earnings of the employee, termination of an employee, transfer of the business where the old employee has to provide the fresh employee with business related information. Reports are kept in both manual and electronic ways. Some companies still favors manual record keeping but due to growing technology and time consumption maximum companies now prefers electronic record keeping method. Both these report keeping methods have certain advantages as well as disadvantages.

MYOB File

The ‘employee data & year to date figures’ states that Julie Simpson is eligible to get sick leaves and the sick pay will be amounting to $280. However the advices that can be provided to the employee is related to sick leaves where the employees should know that in order to avail the sick leave medical proof is necessary. Then discharge of an employee cannot be taken place while that person is in their sick leave. Further advices that the employees can be provided are that in Australia many small businesses are operated with very inclined operations, which mainly requires all employees plus management to be doing things jointly, and in a multi-functional way. However, in this scenario if any of the employees develops an everlasting medical condition that causes the worker to take lavish amount of sick leave, this definitely acts as an additional burden to the business. This involves a drop in employee’s morale when other employees have to cover the work of the absent employee, it may be without pay in a few occasions. Therefore, it is relieving the company’s tension by releasing the employee on personal leave and employ another constant employee instantly because it would have been expensive for the company to hire a new worker train them and them release them as soon as the old employee return form their leaves (Estryn-Béhar and Van der Heijden 2012).

Many organizations are found that the total staff they have, can undergo a situation where they came across workers those who have negative yearly and personal or carer’s leave. In such cases, the company can revise their policies regarding leaves to involve statements like for example sick or carer’s leave availing employees must present medical documents, there may be a gap of five days on leaves those are negative excluding special cases where the employee seeking approval from the managing director or the Human resource head. The Fair work act 2009, permits the company to appeal that a worker supply a medical document or any confirmation that the leave was taken because of the reasons that are stated under the allocation of personal or carer’s leave. However, if the employee is unable to provide any of the medical documentations then the company has the full authority to undertake disciplinary procedures. Moreover, the Fair worker act of 2009 forbid firing as an employee is temporarily unavailable on a sick leave. So according to this law mentioned here a worker can take leave for a number of reasons involving holiday, illness or to care for some dear ones (Macdonald and Charlesworth 2013). The least leave claims are defined in the National Employment Standards that is in the Fair work Act but still a particular agreement or worker’s contract might bestow for other allocations of leaves. The payment structure for sick leaves is actually the basic rate of payment that is allowed to the employees when they are taking sick or personal leaves. They are not eligible for other allocations then like the overtimes they would normally work for, payments based on incentives, bonus, loadings and the rates for penalty.      

Complying with Australian Superannuation Law

Payment processing is the procedure and service that automatically makes the transactions of the payments between the employers and employees (Keresman 2012). The machines that summons, verify, accept or rejects eventually processes the transaction with the help of safe internet connection. However, the payroll processing is more or less same for all assisting countries, which involves processing the pre-payrolls, printing the payments, adjoining entries of the journals, managing the reports of payroll and conducting the ultimate updates. Therefore, the payment processing presents programs that allow the company to record the reference data that is useful for the future. On the other hand, the payroll system is the designed software to arrange all the functions of the worker’s payment and filing the taxes of the workers. This charge can actually involve the retention of hours of works, creating wages, concealing taxes as well as deductions, printing and delivering the checks and finally employee’s tax payment to the government. The payroll processing however involves the calculations of the payments that are made based on their work in the company. 

Now the main point to remember here while processing the payroll is how much the employee get paid, what amount to deduct for the different federal, state and local taxes and the reasons for the amount paid and deducted. Then the process starts paying the worker in the weekly, bi-weekly or bi-monthly basis, restrain the proper amount for from paychecks and keeping a record of it, depositing the overall Federal taxes along with if possible then state taxes, quarterly files IRS Form 941 that defines what has been deposited each month from the foregoing quarter (Ventry 2016). Lastly, the files where the necessary deducted and deposited records are summarized.

To maintain the security and confidentiality the steps that must be taken regarding the payroll information are that any physical hard copies that have any kind of payroll information must be locked at all times and so a secured surrounding is of basic importance. Then there must be certain guidelines that who all can access the payroll information along with strict supervision on the worker until they are in the department of payroll. Organizations electronic security is of high importance like password protection for all computers and databases. Lastly, the important one is to handling the disposal properly as this can bread the security if any small information is into any wrong hands (Romney and Steinbart 2012).

Sick Leave

At first of every month, the pay of each employee is credited. This procedure starts with collecting the employees wage information. These wages are to be very minutely tracked. An organization has a number of taxes however; the gross pay must be excluded from those taxes. Retirement contributions can also be cut out from the pay then calculations are done and the amounts are transferred to each employee’s salary account.

The company always keeps a record of the allowances that are to be paid to every employee. However, a payment becomes an allowance when it is a precise, fixed amount of money to cover approximate money (Kröger and Yeandle 2013). It is paid to the respective employees even if the employee does not exhaust the total amount. The employees can claim the deductions for work-related expenses that they have incurred while performing their job as the employee of the organization. Along with it they may also claim those deductions that are not related to work like the investments in interest and dividend withdrawal, the subtractions for gifts and other donations and also deductions for the price paid for managing the tax related issues.

An organization always owes their worker certain duties, which are mainly implied by the law or are there in the contract with the employees. The few obligations for which records must be kept and it must be met are the employee should get the amount for doing his job and arriving at time, they must be provided with work that they are promised to before hiring, health and safety regulations must be observed. There must be right information provided to the employees that are stated in their contract, opportunity to solve their problems by the organization and lastly both employee and the organization owe each other mutual trust and respect one another.

The internal measures that the company should take so that the payment are processed on time consists of five interconnected components which are control over the surroundings, assessments of the threats, controlling the activities for the payroll which includes hiring, documentation, authorization, reconciliation. Then proper communication is must so that appropriate information can be reliable, accurate and on time and finally keeping a check that all the procedures for payroll are taking place in the right time (Bray et al. 2012).

References

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