White Paper: Training the Payroll Staff

White Paper: Training the Payroll Staff

There is more to running a payroll department than just producing X number of payroll checks every X number of weeks and passing them out. Payroll not only has to meet the payday deadlines but each and every paycheck must be 100% correct. Not just mathematically but it must also comply with every federal, state and local wage and hour or tax law that applies to it specifically. Of course, we can t forget that is must be process properly through the payroll system itself to ensure that all wages, taxes, employee benefits, other deductions such as garnishments, are reported and paid according to all the rules and regulations that govern them. So how does a payroll department, whether it is a party of one or twenty, ensure that it is in compliance with this myriad of laws and regulations? The answer to that question is actually fairly simple. Make sure the staff is trained in every facet of their individual job duties and that the training is thorough and current. Determining the Training Needed But with training resources usually limited in most departments how does the person in charge of the payroll department decide who gets training and who doesn t, who needs training and whose knowledge is current and what type of training should the employee have in the first place? The answer to that question is also quite simple. Test them first. You see, a payroll manager should never assume anything when it comes to a payroll staff member and their knowledge. For example, the fact that a staff member has ten years experience in doing payroll should not influence the manager to assume that the staff member doesn t need training on the basics of any topic. Just because someone has been doing payroll for a number of years doesn t mean that person has been trained properly or even trained at all. Payroll, even just recently, has been a learn as you go profession, and sometimes staff members learned incorrectly. So before a payroll manager establishes a training program for the staff he or she needs to take the time to do a training or needs assessment for each staff member. A training or needs assessment would include establishing the history of each employee s training at the current company and in previous positions. This means actually documenting the year and topics covered for each training session. This doesn t mean that the staff member can t attend the same topic again. For example, most payroll departments have staff members attend year end training courses each year to gain knowledge of the latest rule changes and reporting requirements. But, again with limited training budgets for most payroll departments, a skills or training assessment test will help focus the limited resources where they will do the most good. How does the payroll manager conduct one of these assessments? This is done by simply testing the employee s payroll knowledge and examining his or her job duties. The employee takes a test on the basics of payroll. It can be an oral or written test. Multiple choice or essay, it is up to the payroll manager. Most employees may feel more comfortable with an oral one-onone test since a lot of people freeze up when faced with written tests. But again, that will have to be decided on an individual basis. Now, once the employee passes this test, then a test on intermediate 2

payroll is given. The tests do not have to specifically be created for this assessment but can be pulled from most payroll manuals. The tests should not include company policy or system specific questions but be on general payroll knowledge for the employee s level of experience and job duties. The employee is tested until they have successfully completed all the answers for the level of job knowledge he or she must have. Doing these assessments on each employee is time consuming, but if the employee can pass the tests then it would not be fiscally sound to spend tight training budget funds on training that the employee doesn t need. Once the employee reaches a level where their knowledge is lacking, that s where their training should begin. So if our staff member has 10 years of payroll experience and can pass the basic knowledge test but has difficulty with some areas of the intermediate exam, that s where their training should start. Once the testing for knowledge is conducted, the staff member s job duties are the second area that should be assessed before setting up a training program for an employee. If the staff member never handles garnishments nor does tax reconciliations, and during the testing they demonstrate little or no knowledge in this area then that s okay. They don t need the knowledge in their daily job so there is no need to spend limited training funds on a garnishment class for this employee. However, it can be put down as a future training program for advancement within the department. This way, when all the current training needed for current job duties is completed, the payroll manager can then be ready to begin advanced training for the staff members. Areas of Testing When setting up a training program and testing there are six areas the payroll manager should concentrate on. These include: Basic Payroll This training includes the fundamentals of payroll knowledge, and usually covers the fundamental rules of wage and hour law, taxation, and fringe benefits on both the federal and applicable state level. All payroll staff members need this basic knowledge. Intermediate/Advanced Payroll This training is for staff members who have reached this level in his or her job duties and experience. This training includes the more advanced fringe benefits, quarterly returns, and garnishments. Year End This training usually covers all the basics of closing out the year and producing the Forms W-2. The knowledge gained in this type of class needs to be updated annually. The class normally covers the current SSA filing requirements and any changes in tax regulations, wage and hour law or reporting requirements that will occur in the New Year. It is common to send at least one of the senior staff members working on year end to the class, who then reports back to the rest of the staff. Specialty Payroll Task For the staff members who handle the specialty items or the more complex tasks in the department, specific training in those areas should be given. Topics for this type of training include garnishments, expatriates or multi-state taxation. These classes usually cover just the one 3

topic and are extremely efficient in learning the knowledge needed in a short period of time since the attendees are not forced to sit through hours of non-related information. Payroll Computer System Software How to do the basic input to the complexities of report writer programs is included in this training. All staff members - including the manager - should have formal training on the payroll system software. The training should be conducted by the software company or the vendor of the outside payroll processing company. Each staff member should be trained when a new system is installed and repeated when a significant upgrade occurs. Software This type of training is sometimes overlooked because it is not payroll or system specific. But the payroll department uses word processing or spreadsheet software the same as any other department. Formal training on spreadsheet or word processing software can help improve the efficiency of the department by giving the staff member the knowledge to perform the tasks needed without trying to figure out how something is done or constantly using the help feature. This training can be done in a class setting or by tutorial. Training Sources The venues and methods for getting the payroll staff the training in these topics varies greatly. Many payroll managers still send employees to day long or even week long on-site training seminars which cover a broad spectrum of topics such as basic or intermediate payroll. However there are newer ways to receive the information that take less money for travel and allow for better use of valuable time. One of these venues is on-line training. Offered by colleges and universities this method requires the student to sign on to a website, download manuals, follow the assignments, submit assignments to the instructor and take the final test all over the internet. This type of training gives the payroll professional the basic, intermediate or advanced knowledge they need but also allows them to work at his or her own pace and time frame. It also allows the payroll manager to monitor the training right in the office and to assist the employee when and where needed. This is an excellent source of training for the payroll department with tight budgets and tighter processing time frames. Training doesn t stop once these topics have been covered because the training and knowledge must always be current to be useful. An employee attending a year end course 5 years ago or a wage and hour course 3 years ago may not have the most up to date information available to them. Payroll is a constantly changing field that is difficult to keep up with but payroll staff members must do their best to keep the training current once it is received. Payroll departments need to make training an integral part of the department s everyday calendar. Remember training is not just an organized six to eight hour all day lecture at some hotel across town. To keep training current and relevant and to optimize the time spent doing it, the payroll professional must use the same efficient methods used in processing payroll or organizing the department. This means the most relevant information received in the shortest, most direct method. 4

There are ways and means of obtaining this training available to the payroll department using today s technology. The following are a sample of methods now open to obtain training right in the payroll office. Electronic updates: Yes, updates can be considered training. This is a great method for keeping up-to-date with the latest changes in all areas of payroll. The update comes to the e-mail address furnished in a quick read format. It can be a single topic update or multiple topics listed as bullet points or e-mail links in most updates. The IRS has several electronic newsletters and update services that you can sign up for that include everything from the latest hybrid cars that can be used for tax deductions totally non-useful to payroll to the limits for 401(k) deductions for the upcoming year very useful to payroll. Sometimes you have to sift through the updates but it is well worth it. Most of the state Departments of Revenue (or other appropriate name) have an update service as well. Of course newsletters can be another form of electronic update to use for ongoing training. And the best part about these government style updates is they are free. So no drain on the training budget. Just send the appropriate update to the appropriate staff member. Facebook and Twitter: Yes Facebook can be considered training if using government pages. Although most of the information will be directed at taxpayers many of the FB pages have employer news as well. The same goes for Twitter. Most government agencies send out news updates via a tweet. So you can catch the latest deadline or newest update to a form by checking your Twitter page. In addition many of the payroll service bureaus offer tips or updates on their Twitter/FB pages that can also be used for training. Web or audio webinars: This is one of the best ways to obtain quick training on a single topic. Instead of sitting captive in a hotel meeting room for six to eight hours listening to information on dozens of topics, the audio webinar covers one topic in depth for 90 minutes. This type of training is done on the web or over the phone so the biggest advantage is the lack of travel time needed to attend. Come to the office, work on payroll, stop for the webinar, return right back to payroll processing once the webinar is over. No time lost stuck in traffic or traveling. Most webinar companies also allow multiple listeners to one phone number so more staff members, maybe those who don t need the training right now, could listen in to gain the knowledge. If pausing to hear the webinar is difficult due to processing schedules, many of the companies also offer the webinar on CD or electronically for the same or a reduced price. This way the staff members can listen at a more convenient time and again, multiple uses of the information is available. The IRS has a vast assortment of on-demand webinars for employers in their portal located at http://www.irsvideos.gov/smallbusinesstaxpayer/employers. Some payroll processors will offer free training if you supply a valid business address. You have to get marketing info from them from time to time, but if your training budget is tight 5

Monthly meetings of professional organizations: One excellent source for quick, efficient training is the local monthly meeting of professional organizations such as the American Payroll Association local chapter meeting. Usually an hour or two long and in a convenient section of town, the meeting has information packed speakers and excellent networking opportunities. In conclusion, training is a mandatory part of the payroll department s daily life. It is needed to keep the actual processing and the company itself in compliance with the ever changing world that is payroll. 6