Learning the Hard Way That Payroll Is Broken

The city of Asheville, NC is facing a budget shortfall in the billions of dollars. Unfortunately, some of that shortfall is attributable to a broken payroll system that led the city to pay out millions of dollars in overtime and thousands in comp time in 2017. City leaders have learned the hard way that their payroll system is broken.

BenefitMall is a Dallas company located a thousand miles from Asheville. They regularly onboard new clients who come to them after finding out their own payroll systems were not working. It is part of being in the payroll processing business. Organizations find their systems are broken, then turn to companies like BenefitMall for a fix. Asheville has come up with their own fix now being implemented.

Not Tracking Workers Properly

A March report from WLOS news indicates that one of the big problems in Asheville is a payroll system that doesn’t track workers properly. The ABC affiliate conducted an investigation and discovered numerous deficiencies. They learned:

  • The city paid $3.2 million in overtime during one 15-month period.
  • They paid enough comp time during that same period to equal the pay of 20 full-time workers.
  • The fire department accounted for 42% of the total overtime paid.
  • Just 13 city workers accounted for 15% of the total overtime.
  • The fire department accounted for 65% of the total out-of-class pay.
  • Some city employees were being paid out-of-class pay despite not being eligible for it.

None of what has been happening in Asheville appears to be intentional. Rather, the errors are mistakes related to an outdated payroll system that was never designed to keep pace with modern requirements. City leaders hope that the fixes they have called for will begin showing real results by summer.

Integrated Cloud-Based Solutions

It is not clear what Asheville leaders have decided on as fixes for their broken payroll system. But BenefitMall says the best way to go is to transition to an integrated, cloud-based solution. They say that such solutions are what most employers are now turning to when they begin outsourcing payroll.

A cloud-based solution is one hosted in the cloud and powered by cloud technologies. But it is the ‘integrated’ portion of the equation that is so important to organizations like the Asheville payroll department. An integrated solution combines time and attendance tracking, payroll processing, and other functions into a single package that eliminates mistakes for the most part.

For example, consider a solution that uses a digital time clock and employee ID cards for tracking purposes. The data from the clock is automatically sent to payroll software whenever an employee clocks in or out. The software keeps track of the total hours worked. It calculates weekly earnings based on the rate of pay for different jobs classifications. The system eliminates the need for manual tracking, manually adding up hours worked, and entering the data into a database.

Fix What’s Broken with Technology

The lesson to be learned from examples like Ashland, NC is pretty straightforward: a broken payroll system is best fixed with technology. In almost every case, a payroll system that is not up to par is one still based in the old ways of doing things in a world that has changed dramatically over the last two decades.

If your company’s payroll system is more than seven or eight years old, it is already outdated. If it is more than a decade old, it is likely broken – whether you know it or not. Do not wait to learn the hard way. Instead, start looking at upgrades now.

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