Fraud can be a big problem for businesses. Employees who steal time from employers are committing payroll fraud. Protect yourself against these three types of payroll fraud as seen on https://www.wwspi.com.
Managers or HR might set up an employee in the system to get paid without a real human attached to the account. The check is deposited into a bank account and no one is the wiser until an audit is performed. The business is out of hundreds of dollars, possibly without being able to receive repayment.
Classification of workers, employees or independent contractors, determines which entity pays taxes and other benefits. When employees are classified incorrectly as ICs, the business benefits by paying fewer taxes and not covering the worker on workers’ comp insurance. This type of payroll fraud may go unnoticed until a worker complains. Then, the business is on the hook for back taxes.
Employees clocking in five minutes early once in a while isn’t a bad thing, but when it occurs over weeks or months, the time can really add up. When you have multiple employees who don’t clock out for lunch or stay clocked in for an hour or two of overtime each week, you’re pouring extra money into your payroll. And it’s a fraud.
Good staffing insurance can help you install measures in place that prevent employee payroll fraud.