Driven by Data

Best Practices for Payroll – Part 1

As we prepare for an unusual start to the school year, we are striving to make staff feel like valued members of our communities. One element towards that is having routine operations running smoothly so that attention can be focused on the students and their learning experience. Payroll is a predictable element of running a school that, if done well, is hardly thought about by staff – except maybe on pay day! Payroll mistakes, however, can be upsetting, stressful, and take up a lot of administrative time and energy to rectify. This is the first in a series with tips on how to process an error-free payroll based on our extensive payroll experiences with schools. We hope these will be helpful in increasing the accuracy of your payroll.   


Time & Attendance Approval

Accurately tracking time and attendance is a key component of processing payroll (and a requirement for some federal grants). Depending on the payroll platform, the time and attendance specifics may be different; however, the bottom line is the same in that all the hours on the time cards have to be approved by an HR Manager or the staff member’s direct supervisor before payroll can be processed.

HR Managers will want to address these key questions before setting up the time card approval process: 

  • How often will you need to approve time cards (e.g., every other Friday)
  • How will corrections to time cards be made, recorded, and approved?
  • How long do you keep time records on file, especially for schools with paper time cards?

As you think about the answers to the questions above, keep the following best practices in mind:

  • We strongly encourage HR Managers and supervisors to review employees’ hours on a daily basis if using an online time-keeping system (or as soon as those hours are available for review if you periodically collect paper time cards from employees). Frequent reviews throughout the pay period will help to identify and solve payroll errors early without derailing timely payroll processing.
  • If corrections have to be made, make sure all related parties agree with the changes by either consenting through emails before updating online time cards or signing off on the changes on paper time cards. 
  • Ideally, all the hours should be verified and approved by HR Managers/direct supervisors at least one business day before the payroll processing date to avoid payroll delays. Many payroll platforms require hours to be imported/approved before other payroll adjustments can be added.
  • The Fair Labor Standards Act requires every employer to keep at least three years of payroll records on file. We suggest that schools using paper tracking systems scan and save all the paper time sheets in one payroll folder for at least three years in case of an audit.

 

[This series contributed by Zoe Chen, Senior Finance Analyst; Sarah Guthrie, Senior Finance Analyst; Jenny Huang, Finance Lead; Vika Jordan, Senior Finance Analyst;  and Brian Wolcott, Senior Finance Analyst .]