Payroll Errors: A Global Problem
Errors in the processing of payroll are far more common, as well as more serious, than you might think. In this edition of the Bachmann Group blog, we look at three recent news stories that highlight the true global extent of the problem and how badly it can affect employees and employers alike.
Daphne Tenorio, the Treasurer for Hays County in Texas, has been removed from office after an auditor discovered hundreds of payroll errors that had been made under her jurisdiction. At the Commissioner's Court on the 22nd May, it was publicly revealed that 460 errors had been made in total. 237 of these errors were either wrongly-entered information on the payroll system or outright miscalculations. The remaining 223 were described as 'incorrect calculations of manual timesheets, untimely payroll disbursements and deficiencies in the payroll controls and review process.' Tenorio agreed to relinquish control of all payroll processes to the Budget Office.
BHP Group Ltd, a multinational mining company, revealed that it owes up to AU$430 million (over £228 million) in back pay following the wholesale miscalculation of public holiday leave for more than ten years. A preliminary review, carried out last month, indicated that BHP owes the staggering sum to around 28,500 current and past employees.
The decade-long blunder has been attributed to a failure by BHP to include changes to Australia's national employment standard (made in 2010) into its internal payroll system. Over the ten-year period, each worker lost an average of six days' leave, adding up to more than 170,000 company-wide.
UK Research and Innovation (UKRI) has been ordered to pay £36 million in back-dated tax following a review of its compliance procedures with regard to IR35. The in-depth review uncovered 'historic errors' dating back to 2018, in which UKRI wrongly classified the employment status of several of its contractors.
UKRI is a non-departmental funding body that is sponsored by the UK government's Department for Science, Innovation and Technology (DSIT). DSIT is responsible for supporting the work of nine various research council, one of which is Innovate UK, the UK's national agency for innovation. In its Annual Report and Accounts for the financial year 2021-2022, DSIT confirms that Innovate UK was the agency that had 'fallen foul of HMRC’s IR35 tax avoidance legislation'.
When it comes to payroll management, the stakes are always high. In all three of these stories, each error was small enough to go unnoticed until, years later, it was revealed how these small mistakes had mounted up to unimaginable sums.
For the Bachmann Guernsey payroll management team, it is second nature to closely scrutinise every operation they carry out in their duties. Each detail, no matter how seemingly insignificant, is examined with absolute precision and then checked once again so that the team members are 100% satisfied that no error is present. This is the Bachmann Group guarantee.
Find out more about our payroll management services on the website and do not hesitate to get in touch with the team directly if you have any further questions.