Understanding payroll fraud and preventing it

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Payroll fraud is a matter of serious concern to the people affected by it, the organization in which it happens, and to the economy overall. It is estimated that payroll fraud is involved in around an eighth of all workplace frauds and makes up about a twelfth of all occupational frauds worldwide. On average, a payroll fraud case results in loss of $ 48,000 and avoids detection for about three years. Each payroll case fraud costs around $ 72,000.

It is rather unfortunate, but expected that small organizations bear the brunt of payroll frauds. The reason for this is not far to seek: They usually lack the requisite fraud detection mechanisms, making them particularly susceptible to payroll fraud.

Common methods for preventing payroll fraud

Many organizations take a few steps to prevent payroll fraud. Some of these include limiting access to the information relating to payroll, engaging different people for different levels and areas of payroll functions so that it acts as some kind of checks and balances system, conducting thorough background checks of the employees in charge of payroll functions, checking ghost employee accounts, installing automated clearing house (ACH) filters, and a few others.

Section 404 of SOX Act

Additionally, the Sarbanes Oxley Act, which was a landmark legislation aimed at putting checks on large corporate frauds, also requires companies to take a few steps to prevent payroll fraud. Section 404 of the SOX Act requires a few stringent steps:

  • Companies have to include an Internal Control Report in their annual financial reports stating that the management takes responsibility for implementing what SOX terms an “adequate” internal control structure
  • Management has to assess the effectiveness of this internal control structure
  • Deficiencies and discrepancies in these controls must be reported
  • These declarations by the management have to be attested by external registered auditors.

A complete discussion of the ways of preventing payroll fraud

A thorough understanding of all the elements of payroll fraud and the ways of preventing them will be discussed at a webinar that is being organized by TrainHR, a leading provider of professional trainings for the human resources industry. At this webinar, Dayna Reum, who is Payroll Tax Manager at PetSmart Inc. and has been heavily involved in the payroll field over 15 years; will be the speaker.

To get an in-depth idea of payroll fraud and to understand the ways of dealing with it, please register for this webinar by visiting TrainHR

Tools for detecting payroll fraud

The purpose of this session is to help participants gain an understanding of the legal rules around detecting and deferring payroll fraud. Dayna will review tools that companies can use to detect or deter fraud with immediate effect. She will take up Section 404 of the SOX Act for detailed discussion and examine the requirements in it that publicly traded companies have to meet. She will also explain how the provisions of the Act are designed to check payroll fraud.

This webinar will be of high value to professionals involved in payroll functions, such as Payroll Professionals, Compensation Professionals, HR Professionals, and Benefit Professionals. In the course of this webinar, Dayna will cover the following areas:

  • Payroll Fraud Statistic’s-How big of a problem is it?
  • How does payroll fraud occur?
  • Preventing Payroll Fraud
  • Internal Controls
  • Tools (Process Maps, Business Continuity Plans, Process Documentation)
  • Audits
  • Sarbanes-Oxley 404 Requirements
  • Ethical Business Practices.

Conflict Management is an inevitable fact that needs to be Handled Tactfully

Key Takeaway:

 

conflict

Conflict Management is considered indispensable to growth in organizations. Prudent HR professionals understand how to use this for the organization’s growth.

Like change, conflict too, is an integral part of an organization. Why is there conflict in managements? To understand this question, one needs to understand the meaning of conflict in the perspective and spirit in which the term is understood in management.

In normal, day-to-day life In management
Considered an unwanted aspect of life not always considered unwanted
It is understood to mean hostility understood to be a result of differences in outlook between people
Conflict is considered negative understood as a positive or meaningful difference in outlook or perception of organizational goals and objectives.

Techniques of Conflict Management

Leaders and managers use various techniques in conflict management. Each technique varies according to the individual leader’s attitude, temperament, experience and outlook. In a broader sense, these techniques are generally accepted as the most common means for managing conflict:

 

conflictManagement

5 attributes for employee assistance program

An Employee Assistance Program (EAP) is a program that an organization implements to ease some of the personal problems faced by its employees. An employee assistance program is largely voluntary, in that it is not mandatory either for organizations to implement it, or for very employee to avail it.

employee assistance program - TrainHR

According to the Employee Assistance Professionals Association, here’s what to look for:

  1. 24/7 phone response. Seek out providers that have trained counselors on duty answering a toll-free phone line at all times. Avoid EAPs that require users to navigate an elaborate phone tree before reaching a counselor.
  2. Confidential services. Licensed, professional counselors should deliver assessments and face-to-face counseling sessions in safe, private and confidential offices. Make sure there are enough counselors in your area to deliver timely services in both urgent and nonurgent cases.
  3. Referral support and follow-up. The EAP should assist employees by providing referrals for long-term or specialized care based on assessed needs, recommended treatment and employees’ financial resources. The EAP should provide follow-up and ongoing support for employees.
  4. Crisis intervention. Will EAP counselors come to your facility if there’s an emergency, such as an incident of workplace violence? Good EAPs can provide counseling for traumatized employees. They can also help management coordinate emergency-response plans.
  5. Substance abuse expertise. Given their disproportionately great impact on the workplace, drug and alcohol abuse problems often represent the bulk of EAP cases.

How to classify exempt and non-exempt employees

This is one area that payroll professionals dread: classifying employees as exempt and nonexempt. On the surface, it looks fairly simple, but dig a little, and even experienced professionals get the jitters.

This is primarily because classifying employee into exempt and nonexempt categories wrongly and its concomitant compliance infringement lead to the following situations:

  • In the case of exempt employees, penalties for errors apply to both the classification of the worker and the actual payment of salaries;
  • In a worst case of punishment, it is not just making one wrong classification that is considered a mistake; all workers in the same job classification under the same manager are penalized!

The way ahead is to understand the following:

hr training

hr training

To get a complete understanding of these confusions regarding payment of exempt employees, an interactive session (link) would be highly useful.

www.trainhr.com