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How Long an Employer Has to Fix a Payroll Error

There are many mistakes that humans make and it is reasonable for mistakes to be made but when it comes to payroll error then the mistake is a serious one. There are different kinds of mistakes that can be made on the payroll. The payroll error should be rectified the very moment the error is detected. There is a likelihood of a long time being spent for the correction of a payroll error. When a payroll error is noticed, that is the moment that an employer should take to start fixing the problem and consulting a professional on the matter is ideal. An employer may choose to consult a professional within the company or have an outsourced help as the problem may be a serious one to handle. This may benefit the employer in many ways.

An example of the commonly made mistakes on the payroll is a miscalculation of hours and many others. There are many cases of payroll errors and the thing that the employer has to do is try and fix the problem. The error must, however, be realized within ninety days of the release of the payroll. It is vital to understand how long you have to rectify the payroll mistake as an employer. Ever payroll mistake may have its time frame to be rectified depending on the complication of the error. Here on this website, you can learn about the period an employer has to rectify a payroll error, click on this site to check it out!

The first instance when an error may be noticed is when there is an underpayment. For such case, the employee is viable to collecting penalties and this only happens when the employee wins the lawsuit. During the underpayment period, there are damages that the employee gets and the employer should pay the employee for those damages. The employer has two years to ensure the underpaid employee receives the payments that were lost during the period of underpayment. The two years is after the time when the underpayment was noticed and for the employers that deliberately underpaid, the period goes to three years.

The other time when there is a mistake on the payroll is when an employer overpays an employee. This is different from the underpayment as the employee determines when the time the correction is made as it is corrected the moment the employee tells the employer. Collection of an overpayment is done from up to eight weeks when you tell the employer about the overpayment. The employee may have up to six years to correct the overpayment error.