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28 April 2022

Have you ever been paid wrongly?

Image
A woman is looking at a pay slip having just removed it from its envelope

Getting paid late or incorrectly can cause a whole range of problems for an employee. It’s also a major headache for the mispaying organisation.

Have you ever been paid wrongly?

I have, and the chances are you have too

Our recent Twitter survey discovered a staggering 72.4% (2751 respondents) of people had been paid wrongly at some point in their working lives. It’s probably worse because some people would have been paid wrongly more than once, and some people may not even have realised they’d been paid wrongly. It’s a stat that makes for uncomfortable reading for businesses.

So, what typically goes wrong?

It’s usually either a case of getting paid late or getting paid incorrectly. And ‘incorrectly’ can mean getting overpaid as well as underpaid. All scenarios have negative implications and outcomes.

How does it go wrong?

Human error generally – and it’s easy to see how. Time pressures, the collecting and collation of employee time sheets (sometimes handwritten), reports of hours worked from disparate sources, juggling spreadsheets, wrong tax codes applied, distractions (working on other tasks concurrently), incorrect information supplied to payroll... Yep, the road to paying people accurately is littered with potential obstacles when it’s a manual, or largely manual, process.

Implications and outcomes

Late and/or incorrect pay has several implications and outcomes. None of them good. For the employee getting paid late, or less than what’s due, could mean a late mortgage payment or not paying the rent on time. (Both are resolvable once the error is corrected, but the damage has been done.) It could mean going overdrawn (with fees attached), having to use a credit card, borrowing money, paying a bill late or perhaps ‘raiding’ savings to temporarily make ends meet.

For the employer, paying people incorrectly will generate negative feelings among affected workers. That may only be a temporary thing if it happens the once. Several times and a reputation is on its way to being formed and some employees will start looking for another job. Not only that, but word will get out and be captured for posterity on the likes of sites like Glassdoor. Job candidates and potential future employees will know about it.

Being overpaid because your employer has made a mistake might seem amusing or even appealing to some people, but it is unlikely to ultimately go unnoticed. It will need paying back. Acute embarrassment awaits the employee who doesn’t alert their employer if they get overpaid.

How do you make sure you pay people correctly?

There are very few 100% certainties in life or business. Paying people correctly is no different. But there are ways to significantly improve your chances of paying people correctly and on time 99%+ of the time: let a professional payroll company do the job for you. Contract an established company like MHR – which already pays over two million people on behalf of UK organisations and businesses – and you’ll be getting 99.999% accuracy.

The benefits of paying people correctly

The benefits to employees are clear: commitments met, food on the table and for many, a little ‘wiggle room’ for shopping, entertainment or to put towards a holiday.

For employers, paying people accurately has major benefits. Firstly, they’ll have a more contented workforce. More contented means more focused means more productive. Employers will also have more peace-of-mind through not having to worry about possible surprises such as a financial ‘hit’ through back paying some people or possible censure from employee bodies, unions, HMRC or other regulatory organisations. Accurate pay and compliance sit hand-in-hand.

What next?

An earlier MHR report looked at payroll problems in some detail. Download your copy here. To find out more about how we can help you with 99.999% accurate payroll please click here.

For full details on MHR’s payroll services visit us here.

Simon Wooldridge, Content Writer, MHR

Simon Wooldridge

Simon is a content writer at MHR.

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